SEC Filing | The Stars Group Inc

Date: May 26, 2015

AMAYA INC.

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

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40FR12B

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

x	REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

¨	ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended		Commission File Number

Amaya Inc.

(Exact name of Registrant as specified in its charter)

Quebec

7370

98-0555397

(Province or other jurisdiction

of incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

7600 Trans Canada Hwy.

Pointe-Claire, Quebec, Canada

H9R 1C8

+1 (514) 744-3122

(Address and telephone number of Registrant’s principal executive offices)

Amaya Interactive USA Corporation

4000 Hollywood Blvd., Suite 360-N,

Hollywood, Florida 33021

+1 (514) 744-3122

(Name, address (including zip code) and telephone number (including area code)

of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Shares, no par value

Toronto Stock Exchange

The NASDAQ Stock Market LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

For annual reports, indicate by check mark the information filed with this Form:


¨ Annual information form		¨ Audited annual financial statements

Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by this annual report.

N/A

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ¨ No x

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes ¨ No ¨

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Registration Statement on Form 40-F and the exhibits attached hereto (this “Registration Statement”) are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are subject to risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to, those identified under the headings “Risks Factors and Uncertainties” on page 40 of the Annual Information Form for the year ended December 31, 2014 (the “2014 AIF”) of Amaya Inc. (the “Registrant”) and page 19 of the Registrant’s Management’s Discussion & Analysis for the period ended March 31, 2015 (the “Q1 2015 MD&A”), attached as Exhibits 99.5 and 99.12 to this Registration Statement, respectively, and each incorporated herein by reference, and in other filings that the Registrant has made and may make with applicable securities authorities in the future. Additionally, the safe harbor provided in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), applies to forward looking information provided pursuant to “Off-Balance Sheet Arrangements” and “Tabular Disclosure of Contractual Obligations” in this Registration Statement. Please also see “Caution Regarding Forward-Looking Statements” on page 1 of each of the 2014 AIF and Q1 2015 MD&A. Except as required by applicable law, the Registrant does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events, or otherwise.

Documents Filed as Part of this Registration Statement

The documents filed as Exhibits 99.1 through 99.109 contain all information material to an investment decision that the Registrant, since January 1, 2014: (i) made or was required to make public pursuant to the laws of any Canadian jurisdiction; (ii) filed or was required to file with the Toronto Stock Exchange (the “TSX”) and which was made public by the TSX; or (iii) distributed or was required to distribute to its security holders.

Description of Common Shares

The required disclosure containing a description of the securities to be registered is included under the headings “Dividends” and “Description of Capital Structure—Common Shares”, each beginning on page 64 of the 2014 AIF, and under the heading “Share capital” on page 12 of the Interim Condensed Consolidated Financial Statements for the period ended March 31, 2015, attached as Exhibit 99.11 to this Registration Statement and incorporated by reference herein.

Off-Balance Sheet Arrangements

The Registrant does not have any “off-balance sheet arrangements” (as that term is defined in paragraph 11(ii) of General Instruction B to Form 40-F) that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Tabular Disclosure of Contractual Obligations

The following is a summary of the Registrant’s contractual obligations as of December 31, 2014:


			Payments due by period (CAD$ in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations		5,072,055		254,237		857,514		1,096,637		2,863,667
Capital (Finance) Lease Obligations		4,687		2,071		1,844		772		—
Operating Lease Obligations		81,426		13,292		24,298		8,140		35,696
Purchase Obligations		5,887		4,101		1,786		—		—
Other Long-Term Liabilities Reflected on the Registrant’s Balance Sheet		—		—		—		—		—

Total		5,164,055		273,701		885,442		1,105,549		2,899,363

For a discussion of the Registrant’s other contractual obligations as of December 31, 2014, see “Commitments” on page 35 of the Audited Consolidated Financial Statements for the year ended December 31, 2014, attached as Exhibit 99.7 to this Registration Statement and incorporated by reference herein. For a further discussion of the contractual obligations specified above, including a summary of the same as of March 31, 2014, see page 12 of the Q1 2015 MD&A. There has not been any material changes outside the ordinary course of the Registrant’s business in the specified contractual obligations during the three-month period ended March 31, 2015.

Corporate Governance Practices

The Registrant believes that its corporate governance practices are consistent in all material respects with the applicable requirements of the corporate governance guidelines established by the Canadian Securities Administrators, the applicable corporate governance rules of the Toronto Stock Exchange and the NASDAQ Stock Market LLC (the “NASDAQ Rules”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”). Disclosure of the NASDAQ Rules that the Registrant does not follow and a brief statement of the home country practices it follows in lieu of such NASDAQ Rules, in each case as permitted thereunder, are available on the Registrant’s website at www.amaya.com.

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A.	Undertaking

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

B.	Consent to Service of Process

A Form F-X signed by the Registrant and its agent for service of process is being filed with the SEC together with this Registration Statement.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized.

EXHIBIT INDEX


Exhibit Number		Description

99.1		Articles of Incorporation of the Registrant, as amended

99.2		General By-Laws of the Registrant

99.3		Advance Notice By-Law, By-Law No. 2014-1, A By-Law Relating Generally to the Advance Notice Requirements for the Nomination of Directors of the Registrant

99.4		Common Share Certificate Specimen

99.5		Annual Information Form for the year ended December 31, 2014

99.6		Management’s Discussion & Analysis for the year ended December 31, 2014

99.7		Audited Consolidated Financial Statements for the year ended December 31, 2014, as refiled on May 1, 2015

99.8		Class 1 Reporting Issuers – Participation Fee, dated May 1, 2015, for the year ended December 31, 2014

99.9		Chief Executive Officer Certification of Annual Filings, dated May 1, 2015

99.10		Chief Financial Officer Certification of Annual Filings, dated May 1, 2015

99.11		Interim Condensed Consolidated Financial Statements for the period ended March 31, 2015

99.12		Management’s Discussion and Analysis for the period ended March 31, 2015

99.13		Chief Executive Officer Certification of Interim Filings, dated May 14, 2015

99.14		Chief Financial Officer Certification of Interim Filings, dated May 14, 2015

99.15		Business Acquisition Report, dated October 15, 2014

99.16		Notice of Meeting and Record Date, dated April 15, 2014 (filed by Computershare on behalf of Amaya Gaming Group Inc.)

99.17		Notice of Annual and Special Meeting of Shareholders and Management Information Circular, dated June 30, 2014

99.18		Amended Notice of Meeting and Record Date, dated June 12, 2014 (filed by Computershare on behalf of Amaya Gaming Group Inc.)

99.19		Form of Proxy for the Annual and Special Meeting of Shareholders held on July 30, 2014 (filed by Computershare on behalf of Amaya Gaming Group Inc.)

99.20		Voting Instruction Form for the Annual and Special Meeting of Shareholders held on July 30, 2014 (filed by Computershare on behalf of Amaya Gaming Group Inc.)

99.21		Officer’s Certificate, dated July 7, 2014

99.22		Report of Voting Results, dated July 30, 2014

99.23		Notice of Meeting and Record Date, dated April 2, 2015 (filed by Computershare on behalf of Amaya Inc.)

99.24		Amended Notice of Meeting and Record Date, dated April 30, 2015 (filed by Computershare on behalf of Amaya Inc.)

99.25		Notice of Annual and Special Meeting of Shareholders and Management Information Circular, dated May 14, 2015

99.26		Form of Proxy for the Annual and Special Meeting of Shareholders to be held on June 22, 2015 (filed by Computershare on behalf of Amaya Inc.)

99.27		Voting Instruction Form for the Annual and Special Meeting of Shareholders to be held on June 22, 2015 (filed by Computershare on behalf of Amaya Inc.)

99.28		Unaudited Quarterly Financial Statements for the three month period ended March 31, 2014

99.29		Management Discussion & Analysis for the three month period ended March 31, 2014

99.30		Chief Executive Officer Certification of Interim Filings, dated May 15, 2014

99.31		Chief Financial Officer Certification of Interim Filings, dated May 15, 2014

99.32		Unaudited Quarterly Financial Statements for the six month period ended June 30, 2014


Exhibit Number		Description

99.33		Management Discussion & Analysis for the six month period ended June 30, 2014

99.34		Chief Executive Officer Certification of Interim Filings, dated August 14, 2014

99.35		Chief Financial Officer Certification of Interim Filings, dated August 14, 2014

99.36		Unaudited Quarterly Financial Statements for the nine month period ended September 30, 2014

99.37		Management Discussion & Analysis for the nine month period ended September 30, 2014

99.38		Chief Executive Officer Certification of Interim Filings, dated November 14, 2014

99.39		Chief Financial Officer Certification of Interim Filings, dated November 14, 2014

99.40		Notice of Change of Auditor, dated September 26, 2014

99.41		Material Change Report, dated February 21, 2014

99.42		Material Change Report, dated May 16, 2014

99.43		Material Change Report, dated June 23, 2014

99.44		Material Change Report, dated July 10, 2014

99.45		Material Change Report, dated August 11, 2014

99.46		Material Change Report, dated April 1, 2015

99.47		Stock Purchase Agreement, dated June 10, 2013, by and among Amaya Americas Corporation, Diamond Game Enterprises, James Breslo and Roy Johnson, as amended by First Amendment to Stock Purchase Agreement, dated February 13, 2014

99.48		Revenue Guarantee Agreement, dated February 11, 2014, by and among Amaya Gaming Group Inc., Cryptologic Malta Holdings Limited, Gaming Portals Limited, Amaya (Malta) Limited, Ongame Network Ltd. and Cryptologic Operations Limited

99.49		Deed and Scheme of Merger, dated June 12, 2014, by and among Amaya Gaming Group Inc., Amaya Holdings B.V., Titan OM Mergerco Ltd, Oldford Group Limited, each warranting seller party thereto and Igal Mark Sheinberg

99.50		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Daniel Sebag

99.51		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Marlon Goldstein

99.52		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Harlan Goodson

99.53		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Mauro Alejandro Franic

99.54		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and David Baazov

99.55		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Divyesh Gadhia

99.56		Voting Support Agreement, dated June 12, 2014, by and between Amaya Gaming Group Inc. and Sigmund Hyunjai Lee

99.57		Subscription Receipt Agreement, dated July 7, 2014, by and among Amaya Gaming Group Inc., Canaccord Genuity Corp. and Computershare Trust Company of Canada

99.58		Underwriting Agreement, dated July 7, 2014, by and among Amaya Gaming Group Inc., certain of its subsidiaries party thereto and Canaccord Genuity Corp.

99.59		Underwriting Agreement, dated July 31, 2014, by and among Amaya Gaming Group Inc., certain of its subsidiaries party thereto and Canaccord Genuity Corp.

99.60		Subscription Agreement, dated July 31, 2014, by and among Amaya Gaming Group Inc., certain of its subsidiaries, and the purchasers party thereto, each of which is managed or advised by BlackRock Financial Management, Inc. or its affiliates

99.61		Registration Rights Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc. and the holders party thereto, each of which is managed or advised by BlackRock Financial Management, Inc. or its affiliates

99.62		Voting Disenfranchisement Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc. and the subscribers party thereto, each of which is managed or advised by BlackRock Financial Management Inc. or its affiliates


Exhibit Number		Description

99.63		Subscription Agreement, dated July 31, 2014, by and among Amaya Gaming Group Inc., certain of its subsidiaries, and the purchasers party thereto, each of which is managed or advised by GSO Capital Partners L.P. or its affiliates

99.64		Registration Rights Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc. and the holders party thereto, each of which is managed or advised by GSO Capital Partners L.P. or its affiliates

99.65		Voting Disenfranchisement Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc. and the subscribers party thereto, each of which is managed or advised by GSO Capital Partners L.P. or its affiliates

99.66		First Lien Credit Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc., Amaya Holdings Cooperatieve U.A., Amaya Holdings B.V., Amaya (US) Co-Borrower, LLC, the several lenders from time to time party thereto, Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., Barclays Bank PLC and Macquarie Capital (USA) Inc.

99.67		Second Lien Credit Agreement, dated August 1, 2014, by and among Amaya Gaming Group Inc., Amaya Holdings Cooperatieve U.A., Amaya Holdings B.V., Amaya (US) Co-Borrower, LLC, the several lenders from time to time party thereto, Barclays Bank PLC, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc.

99.68		Stock Purchase Agreement, dated March 30, 2015, by and among AGS, LLC, Amaya Inc. and Cadillac Jack, Inc.

99.69		News Release, dated January 10, 2014

99.70		News Release, dated February 11, 2014

99.71		News Release, dated February 14, 2014

99.72		News Release, dated February 19, 2014

99.73		News Release, dated March 7, 2014

99.74		News Release, dated March 31, 2014

99.75		News Release, dated April 1, 2014

99.76		News Release, dated April 16, 2014

99.77		News Release, dated May 2, 2014

99.78		News Release, dated May 15, 2014

99.79		News Release, dated May 26, 2014

99.80		News Release, dated June 12, 2014

99.81		News Release, dated June 23, 2014

99.82		News Release, dated July 7, 2014

99.83		News Release, dated July 21, 2014

99.84		News Release, dated July 28, 2014

99.85		News Release, dated July 30, 2014

99.86		News Release, dated August 1, 2014

99.87		News Release, dated August 14, 2014

99.88		News Release, dated October 15, 2014

99.89		News Release, dated October 20, 2014

99.90		News Release, dated October 31, 2014

99.91		News Release, dated November 10, 2014

99.92		News Release, dated November 11, 2014

99.93		News Release, dated November 14, 2014


Exhibit Number		Description

99.94		News Release, dated November 21, 2014

99.95		News Release, dated January 12, 2015

99.96		News Release, dated January 15, 2015

99.97		News Release, dated January 21, 2015

99.98		News Release, dated February 13, 2015

99.99		News Release, dated March 11, 2015

99.100		News Release, dated March 16, 2015

99.101		News Release, dated March 20, 2015

99.102		News Release, dated March 30, 2015

99.103		News Release, dated March 31, 2015

99.104		News Release, dated April 8, 2015

99.105		News Release, dated May 1, 2015

99.106		News Release, dated May 14, 2015

99.107		Code of Business Conduct

99.108		Consent of Deloitte LLP

99.109		Consent of Richter LLP

EX-99.1

Exhibit 99.1

LOGO

CERTIFICAT DE CONSTITUTION


	Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J’atteste par les présentes que la compagnie 9138-5666 QUÉBEC INC. a été constituée le *30 JANVIER 2004,* en vertu de la partie IA de la Loi sur les compagnies, comme indiqué dans les statuts de constitution ci-joints.
	*Déposé au registre le 5 février 2004* *sous le matricule 1162017413*

		Registraire des entreprises par intérim


R510I13Q14970FA

LOGO

Inspecteur général des institutions financières
Québec
FORMULAIRE 1
STATUTS DE CONSTITUTION
Loi sur les compagnies (L.R.Q., c. C-38, partie IA)
Procédure et explications
1. Dénomination sociale
9138-5666 QUÉBEC INC.
2. District judiciaire du Québec où la compagnie établit son siège
3. Nombre précis ou nombres minimal et maximal d’administrateurs 4. Date d’entrée en vigueur si postérieure à celle du dépôt
MONTRÉAL MIN. 1; MAX. 10
5. Description du capital-actions
SEE SCHEDULE “A” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
6. Restrictions sur le transfert des actions, le cas échéant
SEE SCHEDULE “B” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
7. Limites imposées à son activité, le cas échéant NONE
8. Autres dispositions
SEE SCHEDULE “C” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
9. Fondateurs
Norn et prénom Adresse incluant le code postal (s’l s’agit d’une personne morale, indiquer le siège et la loi constitutive) Signature de chaque fondateur (s’il s’agit d’une personne morale, signature de la personne autorisée)
LEVETT, Craig 2330, rue Saint-Louis Montréal, Québec H4M 1P5
Si l’espace est insuffisant, joindre une annexe en deux (2) exemplares.
Espace réservé à l’administration
Gouvernement du Québec
Déposé le
30 JAN. 2004
L’Inspecteur général des
Institutions financières
C-211 (2002-12) E

[Unofficial Translation]

CERTIFICATE OF INCORPORATION

Companies Act, Part IA

CQLR c C-38

I hereby certify that the corporation 9138-5666 Quebec Inc. was incorporated on January 30, 2004 pursuant to Part IA of the Companies Act of Quebec, as described in the attached articles of incorporation.

Filed at the Business Register on February 5, 2004 under the Quebec Enterprise Number 1162017413.

Articles of Incorporation

Companies Act, CQLR c C-38, Part IA

Form 1


1. Corporate name

9138-5666 QUEBEC INC.
2. Judicial district of Quebec where the registered office is situated	3. Specific number or minimum and maximum number of directors	4. Effective date if posterior to filing date

MONTREAL	MIN. 1; MAX. 10
5. Description of Share Capital

SEE SCHEDULE “A” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
6. Restrictions on share transfers, if any

SEE SCHEDULE “B” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
7. Restrictions on the business the corporation may carry on, if any

NONE
8. Other provisions

SEE SCHEDULE “C” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF
9. Founders
Surname and Name	Address including postal code (if it is a legal person, indicate the registered office and the incorporating statute)	Signature of each founder (if it is a legal person, signature of the authorized signatory)
LEVETT, Craig	2330, rue Saint-Louis Montreal, Quebec H4M 1P5a

SCHEDULE “A”

SHARE CAPITAL

The unlimited share capital of the company contains seven (7) classes of shares with the following rights, privileges, conditions and restrictions:

A) CLASS A SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class A shares without nominal value, are as follows:

1) Dividends and participation. Subject to the rights and privileges attached to the other classes of shares, holders of class A shares shall have the right, equal in all respects with holders of class B shares:

a) to participate in the property, profits and surplus assets of the company, and for that purpose, to receive any dividend declared by the company, and

b) to share in remaining property of the company upon dissolution.

2) Restriction. Subject to section 123.70 of the COMPANIES ACT, no dividend can be paid on class A shares nor can such shares be acquired by the company which would result in the realizable value of the net assets of the company being insufficient to redeem class D and E shares.

3) Right to vote. Holders of class A shares shall have the right to vote at any meeting of the shareholders of the company. Each class A share confers one (1) vote, except at meetings at where only the holders of certain classes of shares are entitled to vote.

4) Right to convert. Subject to the approval by the directors of the company and by the holders of the majority of outstanding class D shares, any holders of class A shares shall have the right, if he so decides, to exchange all or part of the class A shares that he holds for class D shares, according to the prorata and conditions hereunder contained: the rate of conversion shall be one (1) class D share for each class A share exchanged, the new class D share representing the same amount added to the stated capital account issued and paid for the converted class A share.

A class A shareholder who wishes to prevail himself of this right of exchange shall submit to the head office of the company or its transfer agent a written notice indicating the number of class A shares he wishes to exchange. The notice shall bear the signature of the shareholder registered in the register of securities of the company as being the sole qualified person to exercise the rights attached to the shares, or the signature of his representative. Certificates representing the class A shares submitted for exchange shall be attached to the

notice. Upon receipt of the above-mentioned notice and certificates, the company shall issue a certificate for the class D shares resulting from the exchange. If only part of the class A shares represented by the above-mentioned certificates are to be converted, the company shall, without charge, issue a new certificate representing the class A shares which were not exchanged.

On the date of exchange, the converted class A shares shall automatically be cancelled, and the company shall amend accordingly its issued and paid-up share capital account for class A and D shares in conformity with the provisions of sections 123.50 and 123.51 of the COMPANIES ACT.

B) CLASS B SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class B shares without nominal value, are as follows:

1) Dividends and participation. Subject to the rights and privileges attached to the other classes of shares, holders of class B shares shall have the right, equal in all respects with holders of class A shares:

a) to participate in the property, profits and surplus assets of the company, and for that purpose, to receive any dividend declared by the company, and

b) to receive the remaining property of the company upon dissolution.

2) Restriction. Subject to section 123.70 of the COMPANIES ACT, no dividend can be paid on class B shares nor can such shares be acquired by the company which would result in the realizable value of the net assets of the company being insufficient to redeem class D and E shares.

3) Right to vote. Subject to the provisions of the COMPANIES ACT, holders of class B shares shall not be entitled, as class B shareholders only, to vote at any meeting of shareholders of the company, nor to receive a notice of such meeting and to attend same.

C) CLASS C SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class C shares without nominal value, are as follows:

1) Dividends and participation. Holders of class C shares shall not participate in the profits and surplus assets of the company and, for that purpose, shall not be entitled to any dividend declared by the company.

2) Reimbursement. In the event the assets of the company were distributed following its dissolution, voluntary or forced liquidation or otherwise, holders of class C shares have a right, prior to ail other classes of shareholders of the company, to be reimbursed the amount added to the issued and paid-up share capital account for these class C shares.

/ 2

3) Right to vote. Holders of class C shares shall have the right to vote at any meeting of the shareholders of the company. Each class C share confers one (1) vote, except at meetings where only holders of certain other classes of shares are entitled to vote.

4) Automatic redemption. The death of a shareholder holding class C shares shall automatically result in the redemption by the company of all class C shares held by such shareholder in the share capital, for a price equal to the amount added to the issued and paid- up share capital account for these shares. Within thirty (30) days of the date of redemption, the company shall pay such price to the executor or administrator, upon receipt of the certificates representing the redeemed shares, subject to section 123.54 of the COMPANIES ACT.

On the date of redemption, the redeemed class C shares shall be cancelled, and the company shall reduce its issued and paid-up share capital account for class C shares according to the provisions of section 123.51 of the COMPANIES ACT.

5) Right to purchase. The company may, when it deems it advisable to do so, without notice and without taking into account the other classes of shares, purchase by mutual agreement, at the best possible price, all or part of the outstanding class C shares.

On the date of purchase, the purchased class C shares shall automatically be cancelled, and the company shall reduce its issued and paid-up share capital account for class C shares according to section 123.51 of the COMPANIES ACT.

6) Veto Right. No conversion of class C shares, creation of new classes of shares, equal or preferential to class C shares, or modifications concerning class C shares, or other existing classes of shares for the purpose of conferring to these other classes of shares equal or preferential rights or privileges to class C shares, shall be authorized unless this conversion, creation or modification is approved on a vote regrouping 3/4 of the holders of class C shares present or represented at a general or special meeting convened to this effect, and subject to the other provisions of the COMPANIES ACT.

D) CLASS D SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class D shares without nominal value, are as follows:

1) Dividends. Holders of class D shares shall have the right to receive, prior to holders of class A, B, E, F and G shares, out of the funds applicable to the payment of dividends, as and when such dividends are declared, a monthly, preferential, non-cumulative dividend of one per cent (1%) per month on the redemption value of class D shares, as defined in subsection (5) hereunder. Such dividend shall not be declared for more than one month at a time and shall be payable from the date, at the time and in the manner which may be determined by the directors.

/ 3

2) Reimbursement. In the event the property of the company should be distributed following its dissolution, voluntary or forced liquidation or otherwise, holders of class D shares shall have the right, prior to the holders of class A, B, E, F and G shares, but after holders of class C shares, to be reimbursed the redemption value of class D shares as defined in subsection (5) hereunder, plus the amount of any declared unpaid dividend on class D shares.

3) Additional participation. Holders of class D shares shall not otherwise participate in the profits or surplus assets of the company.

4) Right to vote. Subject to the provisions of the COMPANIES ACT, holders of class D shares shall not be entitled, as class D shareholders only, to vote at any meeting of shareholders of the company, nor to receive a notice of such meeting and to attend same.

5) Right to redeem. Subject to the provisions of section 123.54 of the COMPANIES ACT, each class D share is redeemable upon written request by its holder, if the company can do so legally, at a price which shall include the amount added to the issued and paid-up share capital account for this share, plus a premium equal to the difference between this added amount and its share of the fair market value at the time of exchange, of the class A shares of the company exchanged for class D shares.

Such a price of redemption shall be considered as the redemption value of class D shares and the company shall, in addition, remit to holders of class D shares so redeemed, the amount of the declared unpaid dividends on these shares, as the case may be. The amount of the above-mentioned premium shall be determined by the company and the holders of class D shares on the basis of the estimated fair market value of class A shares on the date of conversion into class D shares.

In the event the federal and/or provincial Revenue Departments should attribute to these class A shares a fair market value different from that determined by the aforementioned persons, the departmental evaluations of the fair market value of class A shares on the date of conversion shall be conclusive and the amount of the premium shall be reduced or increased consequently, provided that the company and holders of class D shares had an opportunity to contest the validity of such departmental evaluations with the departments or before the Courts, and provided that should there be a discrepancy between the provincial and federal evaluations, the above adjustment shall be based on the lowest evaluation determined following an unquestioned assessment or a final Court decision, as the case may be.

On the date of redemption, class D shares redeemed with the agreement of their holders shall be cancelled, and the company shall reduce its issued and paid-up share capital account for class D shares according to the provisions of section 123.51 of the COMPANIES ACT.

/ 4

6) Right to purchase. Subject to the provisions of section 123.56 of the COMPANIES ACT, the company may, when it deems it advisable to do so, without notice and without taking into account the other classes of shares, purchase by mutual agreement all or part of the outstanding class D shares at the best possible price, which in no way shall exceed the aforementioned redemption price nor the realizable value of the net assets of the company.

On the date of purchase, the purchased class D shares shall automatically be cancelled, and the company shall reduce its issued and paid-up share capital account for class D shares according to the provisions of section 123.51 of the COMPANIES ACT.

7) Veto Right. No conversion of class D shares, creation of new classes of shares, equal or preferential to class D shares, or modifications concerning class D shares, or other existing classes of shares for the purpose of conferring to these other classes of shares equal or preferential rights or privileges to class D shares, shall be authorized unless this conversion, creation or modification is approved on a vote regrouping 3/4 of the holders of class D shares present or represented at a general or special meeting convened to this effect, and subject to the other provisions of the COMPANIES ACT.

E) CLASS E SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class E shares without nominal value, are as follows:

1) Dividends. Holders of class E shares shall have the right to receive, prior to holders of class A, B, F and G shares, but after holders of class D shares, out of the funds applicable to the payment of dividends, as and when such dividends are declared, a monthly, preferential, non-cumulative dividend of one per cent (1%) per month on the redemption value of class E shares, as defined in subsection (5) hereunder. Such dividend shall not be declared for more than one month at a time and shall be payable from the date, at the time and in the manner which may be determined by the directors.

2) Reimbursement. In the event the property of the company should be distributed following its dissolution, voluntary or forced liquidation or otherwise, holders of class E shares shall have the right, prior to the holders of class A, B, F and G shares, but after holders of class C and D shares, to be reimbursed the redemption value of class E shares as defined in subsection (5) hereunder, plus the amount of any declared unpaid dividends on class E shares.

3) Additional participation. Holders of class E shares shall not otherwise participate in the profits or surplus assets of the company.

4) Right to vote. Subject to the provisions of the COMPANIES ACT, holders of class E shares shall not be entitled, as class E shareholders only, to vote at any meeting of shareholders of the company, nor to receive a notice of such meeting and to attend same.

/ 5

5) Obligation to redeem. Subject to the provisions of section 123.54 of the COMPANIES ACT, class E shares shall be redeemed by the company totally or partially, at any time upon written request of the holders of class E shares, at a price equal to the amount added to the issued and paid-up share capital account for these shares, plus a premium equal to the difference between the fair market, at the time these class E shares were issued, of the consideration received by the company for issuing these class E shares and the total comprised of:

a) the amount added to the issued and paid-up share capital account for these shares, and

b) the fair market value of any property, other than class E shares, given in payment by the company for that consideration.

Such a price shall be considered as the redemption value of class E shares and the company shall, in addition, remit to holders of class E shares so redeemed, the amount of the declared unpaid dividends on these shares, as the case may be. The fair market value of the aforementioned consideration shall be as determined by the company and the subscriber to class E shares upon issuance of class E shares.

In the event the federal and/or provincial Revenue Departments should attribute to this consideration a fair market value different from that determined by the aforementioned persons, the departmental evaluations shall be conclusive and the amount of the premium shall be reduced or increased consequently, provided that the company and holders of class E shares had an opportunity to contest the validity of such departmental evaluations with the departments or before the Courts, and provided that should there be a discrepancy between the provincial and federal evaluations, the above adjustment shall be based on the lowest evaluation determined following an unquestioned assessment or a final Court decision, as the case may be.

The above-mentioned redemption shall be carried out by the company without regard to other classes of shares. Within thirty (30) days following the date of redemption, the company shall pay the redemption price to the former class E shareholders. Should the company be unable to pay the full redemption price within that delay by reason of the provisions of section 123.54 of the COMPANIES ACT, it shall pay a first amount on account of the full redemption price within the thirty (30) day delay, and pay the balance as soon as it can do so legally.

On the date of redemption, class E shares redeemed with the agreement of their holders shall be cancelled, and the company shall reduce its issued and paid-up share capital account for class E shares according to the provisions of section 123.51 of the COMPANIES ACT.

/ 6

What is more, if in the event of a price adjustment, the company redeem all of class E shares, the company shall pay to its shareholders, as soon as it can legally do so, an additional sum, if the premium is increased, or the holders of the redeemed shares will repay any sum due in the event that the adjustment decreases the premium, with all interest at the highest rate between the one prescribed by virtue of Article 28 of the LAW OF THE MINISTRY OF REVENUE (L.C.Q.) or the one prescribed by Article 4301 of the REGULATIONS OF THE FEDERAL INCOME TAX ACT, as determined from time to time, prorata to the class E shares held by each shareholder. If only a part of the class E shares were redeemed, the portion of the additional payment or repayment, as the case may be, corresponding to the redeemed shares will be made as soon as is legally possible, with interest at the rate hereinabove mentioned, and with regard to the shares still to be redeemed. The value of these shares will modify, either more or less, as the case may be, the amount of the premium for these shares.

6) Right to purchase. Subject to the provisions of section 123.56 of the COMPANIES ACT, the company may, when it deems it advisable to do so, without notice and without taking into account the other classes of shares, purchase by mutual agreement all or part of the outstanding class E shares at the best possible price, which in no way shall exceed the aforementioned redemption price nor the realizable value of the net assets of the company.

On the date of purchase, the purchased class E shares shall automatically be cancelled, and the company shall reduce its issued and paid-up share capital account for class E shares according to the provisions of section 123.51 of the COMPANIES ACT.

7) Veto Right. No conversion of class E shares, creation of new classes of shares, equal or preferential to class E shares, or modifications concerning class E shares, or other existing classes of shares for the purpose of conferring to these other classes of shares equal or preferential rights or privileges to class E shares, shall be authorized unless this conversion, creation or modification is approved on a vote regrouping 3/4 of the holders of class E shares present or represented at a general or special meeting convened to this effect, and subject to the other provisions of the COMPANIES ACT.

F) CLASS F SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class F shares without nominal value, are as follows:

1) Dividends. Holders of class F shares shall have the right to receive, prior to holders of class A, B and G shares, but after holders of class D and E shares, out of the funds applicable to the payment of dividends, as and when such dividends are declared, an annual, preferential, non-cumulative dividend of one dollar (1$) per share; such dividend shall be payable from the date, at the time and in the manner to be determined by the directors.

2) Reimbursement. In the event the property of the company should be distributed following its dissolution, voluntary or forced liquidation or otherwise, holders of class F shares shall have the right, prior to the holders of class A, B, and G shares, but after holders

/ 7

of class C, D and E shares, to be reimbursed the amount added to the issued and paid-up share capital account for class F shares and to be paid the amount of any declared unpaid dividends on class F shares.

3) Additional participation. Holders of class F shares shall not otherwise participate in the profits or surplus assets of the company.

4) Right to vote. Subject to the provisions of the COMPANIES ACT, holders of class F shares shall not be entitled, as class F shareholders only, to vote at any meeting of shareholders of the company, nor to receive a notice of such meeting and to attend same.

5) Obligation to redeem. Subject to the provisions of section 123.54 of the COMPANIES ACT, any holders of class F shares may demand in writing at any time from the company that it redeems to that effect, all or part of the shares of that class held by that same shareholder, at a price equal to the amount added to the issued and paid-up share capital account for these shares, plus the amount of any declared unpaid dividends on class F shares, as the case may be. Upon receipt of such a request, the company shall redeem these shares forthwith and shall pay to the former holder of class F shares, all or part of the aforementioned redemption price which it can then pay without committing an offence under section 123.54 of the COMPANIES ACT; the company shall pay him the full balance, should there be one, as soon as it can legally do so.

On the date of redemption, class F shares redeemed with the agreement of their holders shall be cancelled, and the company shall reduce its issued and paid-up share capital account for class F shares according to the provisions of section 123.51 of the COMPANIES ACT.

On the date of purchase, the purchased class F shares shall automatically be cancelled, and the company shall reduce its issued and paid-up share capital account for class F shares according to the provisions of section 123.51 of the COMPANIES ACT.

7) Veto Right. No conversion of class F shares, creation of new classes of shares, equal or preferential to class F shares, or modifications concerning class F shares, or other existing classes of shares for the purpose of conferring to these other classes of shares equal or preferential rights or privileges to class F shares, shall be authorized unless this conversion, creation or modification is approved on a vote regrouping 3/4 of the holders of class F shares present or represented at a general or special meeting convened to this effect, and subject to the other provisions of the COMPANIES ACT.

/ 8

G) CLASS G SHARES: The rights, privileges, conditions and restrictions attached to an unlimited number of class G shares without nominal value, are as follows:

1) Dividends. Holders of class G shares shall have the right to receive, prior to holders of class A and B shares, but after holders of class D, E and F shares, out of the funds applicable to the payment of dividends, as and when such dividends are declared, an annual, preferential, non-cumulative dividend of one dollar (1$) per share; such dividend shall be payable from the date, at the time and in the manner which may be determined by the directors.

2) Reimbursement. In the event the property of the company should be distributed following its dissolution, voluntary or forced liquidation or otherwise, holders of class G shares shall have the right, prior to the holders of class A and B shares, but after holders of class C, D, E and F shares, to be reimbursed the amount added to the issued and paid-up share capital account for class G shares and to be paid the amount of any declared unpaid dividends on class G shares.

3) Additional participation. Holders of class G shares shall not otherwise participate in the profits or surplus assets of the company.

4) Right to vote. Subject to the provisions of the COMPANIES ACT, holders of class G shares shall not be entitled, as class G shareholders only, to vote at any meeting of shareholders of the company, nor to receive notice of such meeting and to attend same.

5) Unilateral right to redeem. Subject to the provisions of section 123.53 of the COMPANIES ACT, the company may, if it wishes, redeem class G shares unilaterally by giving a thirty (30) day written notice of its intention and by paying a price equal to the amount added to the issued and paid-up share capital account for these shares, plus the amount of any declared unpaid dividends on these shares. In the event of partial redemption, such redemption shall be proportionate to the number of outstanding class G shares, excluding fractions of shares.

On the date of redemption, the redeemed class G shares shall be cancelled, and the company shall reduce its issued and paid-up share capital account for class G shares according to the provisions of section 123.51 of the COMPANIES ACT.

On the date of purchase, the purchased class G shares shall automatically be cancelled, and the company shall reduce its issued and paid-up share capital account for class G shares according to the provisions of section 123.51 of the COMPANIES ACT.

/ 9

7) Veto Right. No conversion of class G shares, creation of new classes of shares, equal or preferential to class G shares, or modifications concerning class G shares, or other existing classes of shares for the purpose of conferring to these other classes of shares equal or preferential rights or privileges to class G shares, shall be authorized unless this conversion, creation or modification is approved on a vote regrouping 3/4 of the holders of class G shares present or represented at a general or special meeting convened to this effect, and subject to the other provisions of the COMPANIES ACT.

/ 10

SCHEDULE “B”

RESTRICTIONS ON THE TRANSFER OF SHARES

No share issued by the company shall be transferred without the approval of the directors. Such approval shall be expressed in a resolution of the Board of Directors and may validly be given after the transfer has been registered in the corporate records, in which case it shall take effect retroactively upon the date the transfer was recorded.

SCHEDULE “C”

OTHER PROVISIONS

1.	CLOSED COMPANY

The company shall be a “closed company” as defined in, and within the meaning of, section 5 of the SECURITIES ACT (R.S.Q., c. V-1.1), and, as such:

the number of shareholders of the company shall be limited to fifty (50), exclusive of present or former employees of the company or of a subsidiary; two or more persons who hold jointly one or more shares are counted as one shareholder; and

any invitation to the public to subscribe for any securities is prohibited.

2.	BORROWING POWERS

In addition to the powers conferred by the articles, in accordance with section 123.13 of the COMPANIES ACT, and without restricting the generality of the powers conferred upon the directors by sections 123.6 and 77 of the COMPANIES ACT, the directors, if they see fit, and without having to obtain the authorization of the shareholders, may:

borrow money upon the credit of the company;

issue debentures or other securities of the company, and pledge or sell the same for such sums or at such price as may be deemed appropriate;

hypothecate the immovable and movable property, or otherwise affect the movable property of the company; and

delegate one or more of the above-mentioned powers to a director, to an Executive Committee, to a committee of the Board of Directors or to an officer of the company.

LOGO

Inspecteur général des Institutions financières
Québec
FORMULAIRE 2
AVIS RELATIF À L’ADRESSE DU SIÈGE
Loi sur les compagnies (L.R.Q., c. C-38, partie IA)
Procédure et explications
1. Dénomination sociale
9138-5666 QUÉBEC INC.
2. Avis est donné par la présente que l’adresse du siège de la compagnie, dans les limites du district judiciaire indiqué dans les statuts, est la suivante:
300 BOULEVARD MARCEL-LAURIN, BUREAU 220
Numéro Rue
MONTRÉAL
Municipal té, ville
QUÉBEC H4M 2L4
Province Code postal
La compagnie
Fondateur
Signature Fonction du signataire
Espace réserve a l’administration
Gouvernement du Québec
Déposé le
30 JAN. 2004
L’Inspecteur général des
Institutions financières
C-212 (2002-09) E

[Unofficial Translation]

Notice Concerning the address of the Head Office

Companies Act, CQLR c C-38, Part IA


1. Corporate name

9138-5666 QUEBEC INC.


2. Notice is hereby given that the address of the Head Office of the corporation, within the judicial district indicated in the articles, is the following:

300 Boulevard Marcel-Laurin, Suite 220 Montreal, Quebec H4M 2L4

LOGO

[Unofficial Translation]

Notice Concerning the composition of the Board of Directors

Companies Act, CQLR c C-38, Part IA


1. Corporate name

9138-5666 QUEBEC INC.


2. Directors of the corporation

Surname and first name		Complete address (including postal code)

LEVETT, Craig		2330, Saint-Louis Street Montreal, Quebec H4M 1P5

LOGO

CERTIFICAT DE MODIFICATION


	Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J’atteste par les présentes que la compagnie SYSTÈMES GAMETRONIX INC. et sa ou ses version(s) GAMETRONIX SYSTEMS INC. a modifié ses statuts 1e *14 MAI 2007*, en vertu de la partie IA de la Loi sur les compagnies, comme indiqué dans les statuts de modification ci-joints.
	*Déposé au registre le 16 mai 2007* *sous le numéro d’entreprise du Québec 1162017413*

		Registraire des entreprises


I630I13G14S71MA			LEX-302 (2007 04)

LOGO

Registraire
des entreprises
Quebec
Statuts de modification
Loi sur less compagnies (L.R.Q., c. C-38, partie IA)
1. Nom - Inscrire le nouveau nom de la compagnie si celui-ci est modifie et inscrire le nom anterieur a la section 5.
Numero d’entreprise du Quebec
ou
NEQ 1 1 6 2 0 1 7 4 1 3
- Inscrire le nom actuel si vous le conservez et inscrire S. O. a la section 5.
SYSTEMES GAMETRONIX INC. / GAMETRONIX SYSTEMS INC.
Marquer la case d’un X si vous demandez un numero matricule (compagnie a numero) au lieu d’un nom.
2. Les statuts de la compagnie sont modifies de la facon suivante:
SEE “ANNEX A - ARTICLES OF AMENDMENT” ATTACHED HERETO
3. Date d’entree en vigueur (si differente de la date du depot des statuts de modification) pour les demandes qui ne sont pas visees par la section 4.
Annee Mois Jour
Date posterieure a celle du depot:
4. Modification des statuts en vertu de l’article 123.140 et suivants de la Loi sur les compagnies
Marquer la case d’un X si la demande de modification est presentee pour rectifier une illegalite, une irregularite ou pour y insurer une disposition requise par la Loi sur les compagnies:
qui ne porte pas atteinte aux droits des actionnaires ou des creanciers (art. 123.140);
qui peut porter atteinte aux droits des actionnaires ou des creanciers - joindre copie du jugement (art. 123.141).
Date d’entree en vigueur (la modification retroagit a la date du certificat accompagnant les statuts que l’on modifie, a moins que les presents statuts ou le jugement ne mentionnent une date ulterieure):
Annee Mois Jour
5. Worn anterieur a la modification (si different de celui mentionne a la section 1).
9138-5666 QUEBEC INC.
Reserve a l’administration
Quebec
Depose le
14 MAI 2007
Le registraire
des entreprises
Signature de l’administrateur autorise
David Baazov
Si l’espace prevu est insuffisant, joindre une annexe remplie en deux exemplaires, identifier la section correspondante et numeroler les pages s’il y a lieu.
SIGNER ET RETOURNER LES DEUX EXEMPLAIRES AVEC VOTRE PAIEMENT.
NE PAS TELECOPIER.
01104-1 (2004-10) E

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Companies Act, Part IA

CQLR c C-38

I hereby certify that the articles of the corporation Gametronix Systems Inc. were amended on May 14, 2007 pursuant to Part IA of the Companies Act of Quebec, as described in the attached articles of amendment.

Filed at the Business Register on May 16, 2007 under the Quebec Enterprise Number 1162017413.


1. Name –		Write the new name of the corporation if it is modified and write the previous name in section 5.

		or

		Write the current name if you keep it and write S.O. in section 5.

SYSTÈMES GAMETRONIX INC. / GAMETRONIX SYSTEMS INC.

¨ Put an “X” in the box if you ask for a matriculation number instead of a name

2. The articles of the corporation are amended as follows

SEE “ANNEX A – ARTICLES OF AMENDMENT” ATTACHED HERETO

3. Effective date (if different from the filing date of articles of amendment) for requests that are not covered by section 4

YEAR

MONTH

DAY

Date posterior to filing date

4. Amendment of articles pursuant to Section 123.140 and following of the Companies Act

Put an “X” in the box if the amendment request is presented to correct an illegality, an irregularity or to insert a provision required by the Companies Act:

• that does not violate the rights of shareholders or creditors (Sec. 123.140);

• that could violate the rights of shareholders or creditors – attach a copy of the judgment (Sec. 123.141).

Effective date (amendment dates back to the date of the certificate accompanying the articles being modified, unless the current articles or the judgement do not mention a later date):

5. Name prior to amendment (if different from Section 1)

9138-5666 QUEBEC INC.

ANNEX A – ARTICLES OF AMENDMENT

The Articles of the Company are amended as follows:

The name of the Company is changed to:

SYSTÈMES GAMETRONIX INC./

GAMETRONIX SYSTEMS INC.

The provisions set forth in Section 5 of the Articles of the Company, providing for the description of the authorized capital and the limits imposed, are amended as follows:

by subdividing all of the Class A shares presently issued and outstanding on the basis of 138,125 Class A shares for each Class A share issued and outstanding immediately prior to the issuance of the Certificate of Amendment.

The provisions set forth in Section 6 of the Articles of the Company, providing for the restrictions on the transfer of shares, are repealed and replaced as follows:

by incorporating the provisions of Schedule 2 in the Articles of Amendment.

The provisions set forth in Section 8 of the Articles of the Company, providing for the other provisions, are repealed and replaced as follows:

by incorporating the provisions of Schedule 3 in the Articles of Amendment.

All of the other provisions of the Articles of the Company remain unchanged.

SCHEDULE 2

RESTRICTIONS ON TRANSFERS OF SHARES

No share issued by the Company shall be transferred or assigned without either (i) the consent of the Board of Directors evidenced by a valid resolution or the minutes of a duly constituted meeting or (ii) the consent of the majority of the voting shareholders evidenced by a valid resolution or the minutes of a duly constituted meeting. This consent, however, may validly be given after the transfer or assignment has been recorded in the Book of the Company, in which case the transfer or assignment shall be valid and take effect retroactively upon the date on which the transfer or assignment was recorded.

SCHEDULE 3

OTHER PROVISIONS

BORROWING POWERS

Subject to the provisions of the Companies Act (Quebec), the directors of the Company may, without authorization of the shareholders:

(a)

borrow money upon the credit of the Company;

(b)

issue, reissue sell or pledge debt obligations of the Company; and

(c)

mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Company, owned or subsequently acquired, to secure any debt obligation of the Company.

Nothing herein limits or restricts the borrowing of money by the Company on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Company.

RESTRICTIONS ON THE TRANSFER OF SECURITIES

As long as the Company qualifies as a “private issuer” as defined in Regulation 45-106 respecting prospectus and registration exemptions, no transfer or assignment of securities (other than non-convertible debt securities) of the Company shall occur without the consent of the Board of Directors of the Company evidenced by a valid resolution or the minutes of a duly constituted meeting.

OTHER

The number of holders of securities, other than non-convertible debt securities, of the Company is limited to fifty (50), not including employees and former employees of the Company or its affiliates, provided that each person is counted as one beneficial owner unless the person is created or used solely to purchase or hold securities of the Company in which case each beneficial owner or each beneficiary of the person, as the case may be, must be counted as a separate beneficial owner.

Subject to the provisions of the Companies Act (Quebec), the Company may purchase or otherwise acquire any shares issued by it.

The Company shall have a lien on the shares registered in the name of a shareholder or his legal representative for any indebtedness owed by him to the Company, and such lien shall be enforceable in accordance with the by-laws of the Company or otherwise.

Subject to the Articles of the Company and the Companies Act (Quebec), the holder of a fractional share shall be entitled to that number of votes equal to one multiplied by the fraction represented by such share and to notice of all meetings of shareholders of the Company.

LOGO

CERTIFICAT DE MODIFICATION


	Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J’atteste par les présentes que la compagnie GROUPE DE JEUX AMAYA INC. et sa ou ses version(s) AMAYA GAMING GROUP INC. a modifié ses statuts le *2 NOVEMBRE 2007,* en vertu de la partie IA de la Loi sur les compagnies, comme indiqué dans les statuts de modification ci-joints.
	*Déposé au registre le 3 novembre 2007* *sous le numéro d’entreprise du Québec 1162017413*

		Registraire des entreprises










E330J13D14G70NA			LEX-302 (2007 04)

LOGO

Registraire
des entreprises
Quebec
Statuts de modification
Loi sur les compagnies (L. R.Q., c C-38, partie IA)
1. Nom
- Inscrire ie nouveau nom de la compagnie si celui-ci est modifie et inscrire le nom anteriéura a la section 5.
Numero d’enterprise du Quebec
ou
NEQ
11 62017413
- Inscrire le nom actuel si vous te conservez et inscrire S.O. à la section 5.
GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.
Marquer la case d’un X si vous demandez un numero matricule (compagnie a numero) au lieu d’un nom.¨
2. Les statuts de la compagnie sont modiflies de la facon suivante:
The name of the Company is changed to: AMAYA GAMING GROUP INC. / GROUPE DE JEUX AMAYA INC.
3. Date d’entree en vigueur (si dilferente de la date du depot des statuts de modification) pour les demandes qui ne sonl pas visees par la section 4.
Date posterieure a celle du depot:
Annea Mois Jour
4. Modification des statuts en vertu de I’artlcle 123.140 et suivants de fa Loi sur les compagnies
Marquer la case d’un X si la demands de modification est presentee pour rectifier une illegalite, une irregularite ou pour y inserer une disposition requise par la Loi sur les compagnies:
qui ne porte pas atteinte aux droils des actionnaires ou des creanciers (art. 123.140);
qui peut porter atteinte aux droits das actionnaires ou des creanciers - joindre copie du jugement (art. 123.141)
Date d entree en vigueur (la modification retroagit a la date du certifical accompagnant les statuts que l’on modifle, a moins que les presents statuts ou le jugement ne mentionnent une date ulterieure):
Annea Mois Jour
5. Nom anterieur a la modification (si different de celui mentionne a la section 1)
GAMETRONIX SYSTEMS INC. / SYSTEMES GAMETRONIX INC.
Reserve l’administration
Quebec
Depose le
- 2 NOV 2007
Le registraire
des enterprises
Signature de I’administrateur autorise
David Baazov
Si l’ espace prevu est insuffisant, joindre une annexe remplie en deux exemplaires, identifier la section correspondents et numeroter les pages s’il y a lieu.
Ministere du Revenu
SIGNER ET RETOURNER LES DEUX EXEMPLAIRES AVEC VOTRE PAIEMENT. NE PAS TELECOPIER.
LE-50.0.11.04 (2007-04)

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Companies Act, Part IA

CQLR c C-38

I hereby certify that the articles of the corporation Amaya Gaming Group Inc. were amended on November 2, 2007 pursuant to Part IA of the Companies Act of Quebec, as described in the attached articles of amendment.

Filed at the Business Register on November 3, 2007 under the Quebec Enterprise Number 1162017413.


1. Name –		Write the new name of the corporation if it is modified and write the previous name in section 5.

		or

		Write the current name if you keep it and write S.O. in section 5.

GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

¨ Put an “X” in the box if you ask for a matriculation number instead of a name

2. The articles of the corporation are amended as follows

The name of the Company is changed to: GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

3. Effective date (if different from the filing date of articles of amendment) for requests that are not covered by section 4

YEAR

MONTH

DAY

Date posterior to filing date

4. Amendment of articles pursuant to Section 123.140 and following of the Companies Act

Put an “X” in the box if the amendment request is presented to correct an illegality, an irregularity or to insert a provision required by the Companies Act:

• that does not violate the rights of shareholders or creditors (Sec. 123.140);

• that could violate the rights of shareholders or creditors – attach a copy of the judgment (Sec. 123.141).

Effective date (amendment dates back to the date of the certificate accompanying the articles being modified, unless the current articles or the judgement do not mention a later date):

5. Name prior to amendment (if different from Section 1)

GAMETRONIX SYSTEMS INC. / SYSTÈMES GAMETRONIX INC.

LOGO

CERTIFICAT DE MODIFICATION


	Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J’atteste par les présentes que la compagnie GROUPE DE JEUX AMAYA INC. a modifié ses statuts le *11 MAI 2010,* en vertu de la partie IA de la Loi sur les compagnies, comme indiqué dans les statuts de modification ci-joints.
	*Déposé au registre le 12 mai 2010* *sous le numéro d’entreprise du Québec 1162017413*
		Registraire des entreprises



I230J13D14G71MA			LEX-304 (2008 09)

LOGO

Registraire
des entreprises
Quebec
Statuts de modification
Loi sur les compagnies (L R.Q., c C-38, partie IA)
1. Nom
- Inscrire le nouveau nom de la compagnie si celui-ci est modifié et inscrire le nom anteriéura a la section 5.
Numero d’enterprise du Quebec
ou
NEQ
11 62017413
- Inscrire le nom actuel si vous le conservez et inscrire S.O. à la section 5.
GROUPE DE JEUX AMAYA INC. AMAYA GAMING GROUP INC.
Marquer la case d’un X si vous demandez un numero matricule (compagnie a numero) au lieu d’un nom. ¨
2. Les statuts de la compagnie sont modiflies de la facon suivante:
Veuillez referrer a la “Schedule A” si-jointe, faisant partie integrante des presents.
3. Date d’entree en vigueur (si differente de la date du depot des statuts de modification) pour les demandes qui ne sonl pas visees par la section 4.
Date posterieure a celie du depot:
Annea Mois Jour
4. Modification des statuts en vertu de I’artlcle 123.140 et suivants de la Loi sur les compagnies
Marquer la case d’un X si la demands de modification est presentee pour rectifier une illegalite, une irregularite ou pour y inserer une disposition requise par la Loi sur les compagnies:
qui ne porte pas atteinte aux droils des actionnaires ou des creanciers (art. 123.140);
¨
qui peut porter atteinte aux droits des actionnaires ou des creanciers - joindre copie du jugement (art. 123.141)
¨
Date d entree en vigueur (la modification retroagit a la date du certificat accompagnant les statuts que l’on modifie, a moins que les presents statuts ou le jugement ne mentionnent une date ulterieure):
Annea Mois Jour
5. Nom anterieur a la modification (si different de celui mentionne a la section 1)
GAMETRONIX SYSTEMS INC. / SYSTEMES GAMETRONIX INC.
Reserve l’administration
Quebec
Depose le
Le registraire
des enterprises
11 MAI 2010
Signature de I’administrateur autorise
Si l’ espace prevu est insuffisant, joindre une annexe remplie en deux exemplaires, identifier la section correspondents et numeroter les pages s’il y a lieu.
Ministere du Revenu
Signer et retourner les deux exemplaires avec votre paiement. Ne pas telecopier.
LE-50.0.11.04 (2009-05)

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Companies Act, Part IA

CQLR c C-38

I hereby certify that the articles of the corporation Amaya Gaming Group Inc. were amended on May 11, 2010 pursuant to Part IA of the Companies Act of Quebec, as described in the attached articles of amendment.

Filed at the Business Register on May 12, 2010 under the Quebec Enterprise Number 1162017413.


1. Name –		Write the new name of the corporation if it is modified and write the previous name in section 5.

		or

		Write the current name if you keep it and write S.O. in section 5.


GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

¨ Put an “X” in the box if you ask for a matriculation number instead of a name

2. The articles of the corporation are amended as follows

SEE SCHEDULE “A” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF

3. Effective date (if different from the filing date of articles of amendment) for requests that are not covered by section 4

YEAR

MONTH

DAY

Date posterior to filing date

4. Amendment of articles pursuant to Section 123.140 and following of the Companies Act

Put an “X” in the box if the amendment request is presented to correct an illegality, an irregularity or to insert a provision required by the Companies Act:

• that does not violate the rights of shareholders or creditors (Sec. 123.140);

• that could violate the rights of shareholders or creditors – attach a copy of the judgment (Sec. 123.141).

Effective date (amendment dates back to the date of the certificate accompanying the articles being modified, unless the current articles or the judgement do not mention a later date):

5. Name prior to amendment (if different from Section 1)

Schedule A

AMAYA GAMING GROUP INC.

GROUPE DE JEUX AMAYA INC.

(the “Company”)

STATUTS DE MODIFICATION (ARTICLES OP AMENDMENT)

The authorized share capital of the Company, as described in Section 5 of the Company’s Articles of Incorporation, is hereby amended as follows:

(i) the authorized share capital of the Company is hereby increased with the creation of an unlimited number of common shares, with no par value, and an unlimited number of preferred shares, with no par value, issuable in series;

(ii) the currently issued and outstanding Class A shares in the share capital of the Company are hereby changed into newly created common shares in the share capital of the Company, on the basis of 1.77 common shares for each one (1) Class A share currently issued and outstanding in the share capital of the Company;

(iii) the currently issued and outstanding Class G shares in the share capital of the Company are hereby changed into newly created common shares in the share capital of the Company, on the basis of one hundred (100) common shares for each one (1) Class G share currently issued and outstanding in the share capital of the Company;

(iv) the currently authorized but unissued Class A shares, Class B shares, Class C shares, Class D shares, Class E shares, Class F shares and Class G shares in the share capital of the Company are hereby cancelled;

(v) the currently authorized Class A shares, Class B shares, Class C shares, Class D shares, Class E shares, Class F shares and Class G shares in the share capital of the Company, as classes of shares in the share capital of the Company, are hereby cancelled; and

(vi) the authorized share capital of the Company shall, from now on, consist of an unlimited number of common shares, with no par value, and an unlimited number of preferred shares, with no par value, issuable in series, subject to the rights, privileges, restrictions and conditions as hereinafter described.

I.	COMMON SHARES

The common shares shall carry and be subject to the following rights, privileges, restrictions and conditions:

1.	Dividends: The holders of the common shares shall be entitled to receive in each year, in the discretion of the directors after payment of the full dividends on the preferred shares, non cumulative dividends in such amounts as the directors may determine.

2.	Liquidation, Dissolution, Other Distribution: The holders of the common shares shall be entitled, subject to the rights, privileges, restrictions and conditions attaching to the preferred shares, to receive the remaining property of the Company upon dissolution.

3.	Voting: The holders of the common shares shall be entitled to vote at all meetings of shareholders, except meetings at which only holders of a specified class of shares are entitled to vote.

II.

PREFERRED SHARES

The preferred shares shall carry and be subject to the following rights, privileges, restrictions and conditions:

Issuable in series: The preferred shares shall be issuable in series and the directors shall have the right, from time to time, to fix the number of, and to determine the designation, rights, privileges, restrictions and conditions attaching to the preferred shares of each series, including, without limiting the generality of the foregoing, the rate or amount of dividends or the method of calculating dividends, the dates of payment thereof or other provisions, subject to the limitations, if any, set out in the articles of the Company.

2.	Parity Ranking: The preferred shares of each series shall rank on a parity with the preferred shares of every other series.

Dividends: The holders of any series of preferred shares shall be entitled to receive in priority to any payment of dividends to the holders of the common shares, if and when declared by the directors, dividends in the amounts specified or determinable in accordance with the rights, privileges, restrictions and conditions attaching to the series of which such preferred shares form part.

Liquidation, Dissolution, Other Distribution: In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the preferred shares shall be entitled to receive in respect of the shares of each series thereof, before any distribution of any part of the assets of the Company among the holders of the common shares, all amounts which may be provided in the articles of the Company to be payable thereon in respect of return of capital, any dividends declared thereon and unpaid, and any cumulative dividends, whether or not declared.

5.	Ratable Participation: If any dividends or amounts payable on the return of capital in respect of a series of preferred shares are not paid in full, all series of preferred shares shall participate ratably in respect of accumulated dividends, if any, and return of capital.

6.	No Further Participation: Except as provided above, preferred shares shall not confer any rights to participate in the profits or assets of the Company.

No Pre-emptive Right: No holder of any series of preferred shares at any time issued and outstanding shall be entitled, as such, to any pre-emptive right to subscribe for the purchase or to receive any part of any other issue of preferred shares on the Company, whether now or hereafter authorized or issued.

8.	Non-Voting: Subject to the provisions of the Companies Act (Quebec), the holders of preferred shares of any series shall not, as such, be entitled to receive notice of, or to attend or to vote at any meetings of Shareholders of the Company.

- 2 -

LOGO

CERTIFICAT DE MODIFICATION


	Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J’atteste par les présentes que la compagnie GROUPE DE JEUX AMAYA INC. a modifié ses statuts le *7 JUILLET 2010,* en vertu de la partie IA de la Loi sur les compagnies, comme indiqué dans les statuts de modification ci-joints.
	*Déposé au registre le 8 juillet 2010*
	*sous le numéro d’entreprise du Québec 1162017413*

		Registraire des entreprises

T830J13D14G70JA			1EX 304 (2008 09)

LOGO

Registraire des entreprises Québec
Statuts de modification
Loi sur les compagnies (L.R.Q., c. C-38, partia IA)
1. Nom - Inscrire le nouveau nom da la compagnie si celui-ci est modifié et inscrire ie nom antérieur à la section 5.
ou
- Inscrire le nom actuel si vous le conservez et inscrire S. O. à la section 5.
Numéro d’entreprise du Québec
NEQ 1 1 6 2 0 1 7 4 1 3
GROUPE DE JEUX AMAYA INC.
AMAYA GAMING GROUP INC.
Marquer la case d’un X si vous demandez un numéro matricule (compagnie à numéro) au lieu d’un nom.
2. Les statuts de la compagnie sont modifiés de la façon suivante :
Veuillez référer à la “Schedule A” ci-jointe, faisant partie intégrante des présentes.
3. Date d’entrée en vigueur (si différente de la date du dépôt des statuts de modification) pour les demandes qui ne soni pas visées par la section 4.
Date postérieure à celle du dépôt : Année Mois Jour
4. Modification des statuts en vertu de l’article 123.140 et suivants de la loi sur les compagnies
Marquer la case d’un X si la demande de modification est présentée pour rectifier une illégalité, une irrégularité ou pour y insérer une disposition requise par la Loi sur les compagnies :
qui ne porte pas atteinte aux droits des actionnaires ou des créanciers (art. 123.140);
qui peut porter atteinte aux droits des actionnaires ou des créanciers - joindre copie du jugement (art. 123.141).
Date d’entrée en vigueur (la modification rétroagil à la date du certificat accompagnant les statuts que l’on modifie, à moins que les présents statuts ou le jugement ne mentionnent une date ultérieure) : Année Mois Jour
5. Nom antérieur à la modification (si différent de celui mentionné à la section 1).
Réservé à l’administration Québec Déposé le 07 JUIL. 2010 Le registraire des entreprises
Signature de l’administrateur autorisé
Si l’espace prévu est insuffisant, joindre une annexe remplie en deux exemplaires, identifier la section correspondante et numéroter les pages s’il y a lieu.
Signer et retourner les deux exemplaires avec votre paiement.
Ne pas télécopier.
Ministère du Revenu
LE-50.0.11.04 (2009-05)
E

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Companies Act, Part IA

CQLR c C-38

I hereby certify that the articles of the corporation Amaya Gaming Group Inc. were amended on July 7, 2010 pursuant to Part IA of the Companies Act of Quebec, as described in the attached articles of amendment.

Filed at the Business Register on July 8, 2010 under the Quebec Enterprise Number 1162017413.


1. Name –		Write the new name of the corporation if it is modified and write the previous name in section 5.

		or

		Write the current name if you keep it and write S.O. in section 5.


GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

¨ Put an “X” in the box if you ask for a matriculation number instead of a name

2. The articles of the corporation are amended as follows

SEE SCHEDULE “A” ATTACHED HERETO, FORMING AN INTEGRAL PART HEREOF

3. Effective date (if different from the filing date of articles of amendment) for requests that are not covered by section 4

YEAR

MONTH

DAY

Date posterior to filing date

4. Amendment of articles pursuant to Section 123.140 and following of the Companies Act

Put an “X” in the box if the amendment request is presented to correct an illegality, an irregularity or to insert a provision required by the Companies Act:

• that does not violate the rights of shareholders or creditors (Sec. 123.140);

• that could violate the rights of shareholders or creditors – attach a copy of the judgment (Sec. 123.141).

Effective date (amendment dates back to the date of the certificate accompanying the articles being modified, unless the current articles or the judgement do not mention a later date):

5. Name prior to amendment (if different from Section 1)

Schedule A

AMAYA GAMING GROUP INC.

GROUPE DE JEUX AMAYA INC.

(the “Company”)

STATUTS DE MODIFICATION (ARTICLES OF AMENDMENT)

A) The restrictions on share transfers, as described in Section 6 of the Company’s Articles of Incorporation, as amended, are hereby removed.

B) The minimum number and maximum number of directors, as described in Section 3 of the Company’s Articles of Incorporation, are hereby changed to Minimum 3 / Maximum 15.

C) The other provisions, as described in Section 8 of the Company’s Articles of Incorporation, as amended, are hereby removed.

REZ-128 (2014-05)

Certificat de modification

Loi sur les sociétés par actions (RLRQ, chapitre S-31.1)

J’atteste que la société par actions

GROUPE DE JEUX AMAYA INC.

et sa version

AMAYA GAMING GROUP INC.

a modifié ses statuts en vertu de la Loi sur les sociétés par actions pour y intégrer les modifications mentionnées dans les statuts de modification ci-joints.

Le 30 juillet 2014

Déposé au registre le 30 juillet 2014 sous le

numéro d’entreprise du Québec 1162017413.

LOGO

Registraire des entreprises

LOGO

Revenu Québec

REZ-909 (2012-11)

Page 1 de 1

Statuts de modification

Numéro d’entreprise

du Québec (NEQ) :

1162017413

Loi sur les sociétés par actions, L.R.Q., c. S-31.1

1	Identification de la société

Nom de la société par actions

GROUPE DE JEUX AMAYA INC.

Version(s) du nom de la société dans une autre langue que le français, s’il y a lieu

AMAYA GAMING GROUP INC.

2	Modification des statuts

2.1

Modification relative au nom

Nom de la société par actions

2.2

Autres modifications

See attached Schedules which form an integral part hereof.

2.3

Date et heure à attribuer au certificat, s’il y a lieu

Date Heure

3	Correction des statuts

4	Signature

Nom de l’administrateur ou du dirigeant autorisé

David Baazov

Signature électronique de

David Baazov

Réservé à l’administration

Numéro de référence de la demande : 020200023208763

Désignation numérique :

Revenu Québec

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Business Corporations Act, CQLR c S-31.1

I hereby certify that the articles of the corporation Amaya Gaming Group Inc. were amended on July 30, 2014 pursuant to the Business Corporations Act, as described in the attached articles of amendment.

Filed at the Business Register on July 30, 2014 under the Quebec Enterprise Number 1162017413.

1. Corporate name

GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

2. Amendment of articles

2.1 Amendment of corporate name

2.2 Other amendments

SEE ATTACHED SCHEDULES WHICH FORM AN INTEGRAL PART HEREOF

2.3 Date and time to assign to certificate, if any

Date Time

3. Correction of articles

4. Signature

Name of director of authorized officer

David Baazov

Electronic signature of

David Baazov

LOGO

Registraire des enterprises Quebec
RE-500 (2012-07) Page 1
Statuts de modification
Numéro d’entreprise du Québec NEQ 1 1 6 2 0 1 7 4 1 3
Loi sur les sociétés par actions, L.R.Q., c. S-31.1
1 Identification de la societe
Nom de la societe par actions
GROUPE DE JEUX AMAYA INC.
Version(s) du nom de la societe dans une autre langue que le francais, s’il y a lieu AMAYA GAMING GROUP INC.
2 Modification des statuts
2.1 Modification relative au nom Nom de la societe par actions
Version(s) du nom de la societe dans une autre lanque que le francais. s’il y a lieu
Designation numerique pour tenir lieu de nom
2.2 Autres modifications
See attached Schedules which form an integral part hereof.
2.3 Date et heure a attribuer au certificat, s’il y a lieu
Date Heure
10VO ZZ 49488679
Revenu Québec

LOGO

RE-500 (2012-07)
3 Correction des statuts Page 2
3.1 Statuts at certificat vises par la correction
Les statuts de deposes au registre des entreprises le contierment
[ILLEGIBLE]
3.2 Corrections demandees
3.3 Drolls des actionmaires et des creanciers
les corrections demandees
ne risquent pas de porter atteinte aux drolls des actionnaires;
ne risquent pas de porter atteinte aux drolls des creanciers;
risquent de porter atteinte aux drolls des actionnaires;
risquent de porter atteinte aux drolls des creanciers.
4 Signature
David Baazov
Name de l’administratus or de [ILLEGIBLE] Signature de [ILLEGIBLE]
Signex et retournez ce formulalre accompagne des documents exiges et de palement requiz Ne pas telecopier.
[ILLEGIBLE]
10VP ZZ 49488680

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Business Corporations Act, CQLR c S-31.1

1. Corporate name

GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

2. Amendment of articles

2.1 Amendment of corporate name

Corporate name

¨ Designating number in lieu of a name

2.2 Other amendments

SEE ATTACHED SCHEDULES WHICH FORM AN INTEGRAL PART HEREOF

2.3 Date and time to assign to certificate, if any

Date Time

3. Correction of articles

3.1 Articles and certificate referred to by the correction

The articles of filed at the Business Register on contain illegal provisions, errors or irregularities. A certificate in connection with these articles was delivered by the Business Register on and at .

3.2 Requested corrections

3.3 Rights of shareholders and creditors

The requested corrections

¨ Do not violate rights of the shareholders;

¨ Do not violate rights of the creditors;

¨ Could violate rights of the shareholders;

¨ Could violate rights of the creditors

4. Signature


David Baazov

Name of director or authorized officer				Signature of director or authorized officer

SCHEDULE 1

OTHER PROVISIONS

As long as the Corporation remains a reporting issuer under the terms of the Business Corporations Act (Québec) (the “Act”) or has more than 50 shareholders, the directors of the Corporation may appoint, from time to time, one or more additional directors within the limits provided in the Act.

SCHEDULE 2

REPLACEMENT OF THE PREFERRED SHARES

WITH CONVERTIBLE PREFERRED SHARES

The class of Preferred Shares set forth in Schedule A attached to the Articles of Amendment of the Corporation, which were confirmed by Certificate of Amendment dated May 11, 2010, are cancelled as a class and replaced by Convertible Preferred Shares, having the rights, privileges, restrictions and conditions set forth below.

AMAYA GAMING GROUP INC.

PREFERRED SHARES

The authorized share capital of the Corporation, as described in Section 5 of the Corporation’s Articles of Incorporation, as amended, is further amended as follows:

The currently authorized preferred shares in the share capital of the Corporation, as a class of shares of the Corporation, are hereby cancelled and replaced by the following Preferred Shares (the “Convertible Preferred Shares”), which shall carry and be subject to the following rights, privileges, restrictions and conditions:

1.	Definitions

The following terms shall have the following meanings:

(a)	“Additional Shares” has the meaning ascribed thereto in Section 5;

(b)	“BlackRock” means BlackRock Financial Management, Inc.;

(c)

“BlackRock Group” means BlackRock, its affiliates and funds, clients as at the Issue Date and accounts managed or advised by BlackRock or its affiliates, to the extent BlackRock or its affiliates have control or direction over the securities of the Corporation held by such clients, funds or accounts;

(d)	“Board” means the Corporation’s board of directors;

(e)	“Business Day” means any day, other than a Saturday or Sunday, on which deposit-taking banks are open for commercial banking business in New York, USA and Montreal, Canada during normal banking hours;

(f)	“Close of Business” means 5:00 p.m. Montreal time;

(g)

“Closing Sale Price” of the Common Shares on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the Toronto Stock Exchange, or if the Common Shares are not listed on the Toronto Stock Exchange, for the other principal national securities exchange on which the Common Shares are then listed or, if the Common Shares are not listed for trading on a securities exchange on the relevant date, the last quoted bid price for the Common Shares in the over-the-counter market on the relevant date. In the absence of such a quotation, the Closing Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Shares on the relevant date from (x) each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose, if the Common Shares are listed on the Toronto Stock Exchange, or (y) each of at least three internationally recognized independent investment banking firms selected by the

Corporation for this purpose, if the Common Shares are listed on a securities exchange other than the Toronto Stock Exchange. The provisions of this paragraph shall apply mutatis mutandis to the determination of the Closing Sale Price in respect of any other relevant securities with respect to which the Closing Sale Price is to be determined pursuant to the terms hereof;

(h)	“Common Shares” means the common shares of the Corporation;

(i)

“Consolidated Net Debt” means, as of any date of determination, the consolidated Debt of the Corporation and its Subsidiaries less any unrestricted cash or cash equivalents reflected on the balance sheet of the Corporation (other than cash or cash equivalents that are or are derived from the proceeds of the transaction giving rise to such calculation or are or are derived from the proceeds of any Debt issuance or financing);

(j)	“Conversion Date” has the meaning ascribed thereto in Section 6(c);

(k)

“Conversion Ratio” means the number of Common Shares which shall be issued to the Holder of each Convertible Preferred Share upon exercise of the conversion rights as such number of Common Shares may be adjusted as provided for herein, it being understood that the Conversion Ratio in effect on the Issue Date shall be equal to the Initial Conversion Ratio;

(1)	“Conversion Ratio Adjustment Factor” means 1.03, as adjusted as provided herein;

(m)	“Convertible Preferred Shares” has the meaning set out in the recitals;

(n)

“Debt” means, with respect to the Corporation and its consolidated Subsidiaries, on any date of determination, any indebtedness of such person (excluding accrued expenses and trade payables and excluding contingent obligations in the ordinary course of business): (1) in respect of borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments for which such person is responsible or liable; (3) representing reimbursement obligations in respect of letters of credit, bankers’ acceptances or similar instruments (except to the extent such reimbursement obligations relate to trade payables and such obligations are satisfied within 30 days of incurrence), in each case only to the extent that the underlying obligation in respect of which the instrument was issued would be treated as Debt; (4) representing capital lease obligations (to the extent classified or accounted for in accordance with the Corporation’s applicable accounting principles as a capitalized or similar expense); (5) representing the deferred and unpaid balance (other than trade payables) of the purchase price of any property or services due more than one year after such property is acquired or such services are completed, where the deferred payment is arranged primarily as a means of raising financing; and/or (6) representing net obligations in respect of hedging agreements or arrangements or such person designed to manage interest rate, currency or commodity prices fluctuations and risk (“Hedging Obligations”); in each case without double-counting and if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability on the consolidated balance sheet (excluding the notes thereto) of the Corporation in accordance with IFRS;

- 2 -

(o)

“Effective Date” means the date on which a Fundamental Change event occurs or becomes effective (as determined in good faith by the Board) except that, as used in Section 6(e)(i), Effective Date means the first date on which the Common Shares trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable;

(p)

“Ex-Date,” when used with respect to any issuance, dividend or distribution on the Common Shares, means the first date on which the Common Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution from the Corporation or, if applicable, from the seller of the Common Shares on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market;

(q)	“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended and as applicable as at the date hereof;

(r)	“Fundamental Change” shall be deemed to have occurred at any time after the issue Date if any of the following occurs:

(i)

a “person” or “group” within the meaning of Section 13(d) of the Exchange Act (other than the Corporation, its Subsidiaries, the GSO Group, the BlackRock Group or any holder of more than 10% of the Common Shares on the Issue Date) has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 50% of the voting power in the aggregate of all classes of capital stock then outstanding entitled to vote generally in elections of the Corporation’s directors;

(ii)

the consummation of (A) any recapitalization, reclassification or change of the Common Shares (other than changes resulting from a share split or combination) as a result of which Common Shares would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger pursuant to which Common Shares would be converted into cash, securities or other property; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Corporation and its subsidiaries, taken as a whole, to any person other than one of the Corporation’s subsidiaries; provided, however, that any merger or amalgamation with a wholly-owned subsidiary or solely for the purpose of changing the Corporation’s jurisdiction of incorporation to Canada, any province thereof, the United States of America, any state thereof or the District of Columbia, and resulting in a reclassification, conversion or exchange of outstanding Common Shares solely into common shares of the surviving entity, shall not be a Fundamental Change;

(iii)

the Common Shares (or other common shares underlying the Convertible Preferred Shares) cease to be listed or quoted on any of the Toronto Stock Exchange, New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the Main Market of the London Stock Exchange (or any of their respective successors); or

(iv)

the Corporation’s shareholders approve any plan or proposal for its Liquidation;

- 3 -

provided that no Fundamental Change shall be deemed to have occurred in the event that the Corporation exercises its right of mandatory conversion pursuant to Section 5(g).

(s)	“Fundamental Change Notice” has the meaning ascribed thereto in Section 5 below;

(t)	“Group” means the Corporation and its Subsidiaries;

(u)	“GSO” means GSO Capital Partners LP;

(v)	“GSO Group” means GSO, its affiliates and funds and accounts managed or advised by GSO or its affiliates, to the extent GSO or its affiliates have control or direction over the securities of the Corporation held by such funds or accounts;

(w)	“Holders” means a holder of record of Convertible Preferred Shares;

(x)	“IFRS” means the International Financial Reporting Standards as promulgated by the International Accounting Standards Board (or any successor or agency), as in effect from time to time;

(y)	“Initial Conversion Price” means CDN$24;

(z)	“Initial Conversion Ratio” means the ratio calculated by dividing the Initial Liquidation Preference by the Initial Conversion Price;

(aa)	“Initial Liquidation Preference” means, with respect to each Convertible Preferred Share, CDN$1,000.00;

(bb)	“Issue Date” means the date of issuance of the Convertible Preferred Shares;

(cc)	“Leverage Ratio Test” has the meaning ascribed thereto in Section 8(a)(i);

(dd)	“Liquidation” means the liquidation, winding-up or dissolution of the Corporation or any distribution of substantially all of its assets;

(ee)	“Liquidation Preference” means the liquidation preference provided at Section 9;

(ff)	“LTM EBITDA” means, for any LTM Period, with respect to the Corporation and its Subsidiaries (taken together on a consolidated basis (as determined in accordance with IFRS)), the net income (or loss), plus, to the extent deducted in arriving at such net income (loss), (without duplication);

(1)

all depreciation and amortization expense for such period;

(2)

all provision for or payment of taxes on income, profits or capital for such period;

(3)

all interest expense and other financing cost and expenses for such period;

(4)

the aggregate amount of all other non-cash charges, expenses or fosses reducing net income (loss) during such period including without limitation non-cash write-downs

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and/or impairment of long-lived assets (excluding any such non-cash charge, expense or loss to the extent it represents an accrual of or reserve for cash charges in any future period) less the aggregate amount of all other non-cash charges, expenses or losses increasing net income (loss) during such period (excluding any such non-cash charge, expense or loss to the extent it represents a receipt of cash in any future period);

(5)

any extraordinary expenses and losses (and minus any extraordinary gains);

(6)

any loss from discontinued operations (and minus any income from discontinued operations);

(7)

any loss from non-current assets held for sale (and minus any income from non-current assets held for sale);

(8)

transaction fees and expenses related to any Permitted Acquisitions; and

(9)

settlement, severance and retention payments with respect to employees of the Corporation incurred in connection with Permitted Acquisitions;

as determined in accordance with IFRS in the case of (1), (2), (3), (5), (6) and (7) above;

(gg)	“LTM Period” has the meaning ascribed thereto in Section 8(a)(i);

(hh)	“Mandatory Conversion” means the mandatory conversion provided at Section 10;

(ii)	“Mandatory Conversion Date” has the meaning ascribed thereto in Section 10(b);

(jj)	“Open of Business” means 9:00 a.m. Montreal time;

(kk)	“Price/Liquidity Conditions” has the meaning ascribed thereto in Section 10(a);

(ll)	“Permitted Acquisitions” means any acquisition which is permitted pursuant to Section 8(a)(iii);

(mm)	“Permitted Debt” means

(1) Debt of one or more members of the Group under the Senior Secured Credit Facilities entered into by certain members of the Group and inter alia Deutsche Bank AG Mew York Branch, Barclays Bank PLC and Macquarie Capital USA on or about the Issue Date (the “Senior Secured Credit Facilities”; as the same may be refinanced, replaced, amended, restated or modified from time to time) in an aggregate amount at any time outstanding not to exceed US$2.9 billion (or foreign currency equivalent thereof);

(2) Debt of one or more members of the Group to the extent outstanding on or committed and available as of the Issue Date after giving effect to the Transactions (and any amendment, modification, replacement or refinancing of such existing Debt not increasing the principal amount thereof);

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(3) Debt under Hedging Obligations entered into for bona fide hedging purposes of one or more members of the Group not for the purpose of speculation;

(4) Debt of the Corporation owed to a Subsidiary and Debt of any Subsidiary owed to the Corporation or any other Subsidiary; provided, however, that upon arty such Subsidiary ceasing to be a Subsidiary or such Indebtedness being owed to any person other than the Corporation or a Subsidiary, the Group shall be deemed to have incurred Debt not permitted by this clause (4);

(5) Debt in respect of bid, performance or surety bonds issued for the account of a member of the Group in the ordinary course of business, including guarantees or obligations of a member of the Group with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);

(6) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;

(7) Debt arising in connection with endorsement of instruments for deposit in the ordinary course of business; and

(8) Debt arising in connection with Permitted Acquisitions (whether previously existing at the target of such Permitted Acquisition or incurred in contemplation thereof); provided that the aggregate principal amount of Debt incurred pursuant to this clause (8) shall not exceed US$250 million (or foreign currency equivalent thereof) at any one time outstanding.

(nn)

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Shares (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Shares (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of Common Shares (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board or a duty authorized committee thereof, statute, contract or otherwise);

(oo)	“Recurring Conversion Ratio Adjustment” has the meaning ascribed thereto in Section 7(a);

(pp)	“Reference Property” has the meaning ascribed thereto in Section 6(j);

(qq)

“Registration Rights Agreement” means the agreement entered into by the Corporation to qualify any sale of registrable securities held by the GSO Group or the BlackRock Group under the terms of a prospectus or registration statement, as applicable, in accordance with the terms and conditions of such agreement;

(rr)	“Reorganization Event” has the meaning ascribed thereto in Section 6(j);

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(ss)	“Special Rights End Date” has the meaning ascribed thereto in Section 5;

(tt)

“Stock Price” means (i) if holders of Common Shares receive in exchange for their Common Shares only cash in the transaction constituting a Fundamental Change, the cash amount paid per share or (ii) otherwise, the VWAP of Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding, but excluding, the Effective Date of the Fundamental Change;

(uu)	“Subsidiary” means any subsidiary of the Corporation consolidated with the Corporation for purpose of and in accordance with IFRS, and including for the avoidance of doubt Cadillac Jack, Inc. and Oldford Group Limited and their respective subsidiaries;

(vv)

“Trading Day” means a day during which trading in the Common Shares generally occurs on the Toronto Stock Exchange or, if the Common Shares are not listed on the Toronto Stock Exchange, on the principal other national securities exchange on which the Common Shares are then listed or, if the Common Shares are not listed on a national securities exchange, on the principal other market on which the Common Shares are then listed or admitted for trading. If the Common Shares are not so listed or traded. Trading Day means a Business Day;

(ww)	“Transactions” means the acquisition by Subsidiaries of the Corporation of Oldford Group Limited and the related financing and refinancing transactions as contemplated by the Senior Credit Facilities; and

(xx)

“VWAP” means the volume weighted average trading price of the Common Shares (or other relevant securities with respect to which VWAP is being determined) calculated by dividing the total value by the total volumes trading during the relevant period if the Toronto Stock Exchange is the principal securities exchange on which the Common Shares are listed at the relevant time. Otherwise, VWAP shall have the meaning given to it by the principal national securities exchange on which the Common Shares (or other relevant securities with respect to which VWAP is being determined) are listed at the relevant time (and in the absence thereof, VWAP shall mean the Closing Sale Price).

2.	Creation of Convertible Preferred Shares; Ranking

(a)

There shall be created a series of preferred shares designated as “Class A Convertible Preferred Shares” and the authorized number of shares of Convertible Preferred Shares shall be 1,139,356. Convertible Preferred Shares that are purchased or otherwise acquired by the Corporation, or that are converted into Common Shares, shall be cancelled.

(b)	The Convertible Preferred Shares, with respect to rights upon the Liquidation, shall rank: (i) senior to all Common Shares; and (ii) on parity with other Convertible Preferred Shares, in each case as provided more fully herein.

3.	Dividends

The Holders shall not be entitled to receive any dividends on the Convertible Preferred Shares.

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4.	Voting Rights

The Holders shall have no right to receive notice of, attend or vote at any meeting of shareholders of the Corporation except (i) for amendments to the terms of the Convertible Preferred Shares, which require the consent of Holders of at least 66²⁄₃% of the outstanding Convertible Preferred Shares (to the extent such amendment is permitted by the Québec Business Corporations Act), provided that as long as GSO Group holds at least 50% of the Convertible Preferred Shares issued to GSO Group on the Issue Date or BlackRock Group holds at least 50% of the Convertible Preferred Shares issued to BlackRock Group on the Issue Date, the amendments to any terms of the Convertible Preferred Shares relating to the Recurring Conversion Ratio Adjustment, the Liquidation Preference, the Initial Conversion Ratio, the Mandatory Conversion or this provision shall also require the prior written consent of GSO or BlackRock, or both (as applicable), and (ii) as otherwise required by the Québec Business Corporations Act, by law or as may be required by an order of a Court of competent jurisdiction.

5.	Special Rights Upon a Fundamental Change

(a)

The Corporation must give notice (a “Fundamental Change Notice”) of each Fundamental Change to all Holders no later than 20 Business Days prior to the anticipated Effective Date of the Fundamental Change (determined in good faith by the Board) or, if not practicable because the Corporation is unaware of the Fundamental Change, as soon as reasonably practicable but in any event no later than five (5) Business Days after the Corporation becomes aware of such Fundamental Change. If a Holder converts its Convertible Preferred Shares pursuant to Section 6 below at any time during the period beginning at the Open of Business on the Trading Day immediately following the Effective Date and ending at the Close of Business on the 30^th Trading Day immediately following such Effective Date (the “Special Rights End Date”), the Corporation shall deliver to the converting Holder, for each Convertible Preferred Share surrendered for conversion, the greater of:

(i)

a number of Common Shares equal to the sum of (A) the Conversion Ratio and (B) the number of Additional Shares determined pursuant to Section 5(c) below; and

(ii)

a number of Common Shares equal to the Conversion Ratio which will be increased to equal (A) the Initial Liquidation Preference adjusted to take into account any Conversion Ratio adjustments since the Issue Date up to the relevant Conversion Date (including pursuant to Section 9(a)(1) hereof), divided by (B) the VWAP of the Common Shares for the five consecutive Trading Days ending on the third Business Day prior to such settlement date, Notwithstanding the foregoing, the Conversion Ratio as adjusted as described in, and for the purposes of, this Section 5(a)(ii) will not exceed the amount calculated as the Liquidation Preference, adjusted to take into account any Conversion Ratio adjustments since the Issue Date up to the relevant Conversion Date (including pursuant to Section 9(a)(i) hereof), divided by 50% of CDN$20 (being the reference stock price).

(b)	The Fundamental Change Notice shall be given by first-class or registered mail to each Holder of Convertible Preferred Shares, at such Holder’s address as the same appears on

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the books of the Corporation. Each such notice shall state (i) the anticipated Effective Date; (ii) that the Special Rights End Date is the 30^th Trading Day immediately following the Effective Date; (iii) the name and address of the Transfer Agent; and (iv) the procedures that Holders must follow to exercise their conversion right pursuant to this Section 4.

(c)

The number of additional Common Shares to be added to the Conversion Ratio per Convertible Preferred Share (the “Additional Shares”) as set forth in Section 5(a)(i) above shall be determined by reference to the table below, based on the Effective Date and the Stock Price. If holders of Common Shares receive in exchange for their Common Shares only cash in the event of a Fundamental Change, the Stock Price shall be the cash amount paid per share. Otherwise, the Stock Price shall be the VWAP of Common Shares on the five Trading Days immediately preceding, but excluding, the Effective Date.

LOGO

(d)

The Stock Prices set forth in the table above will be adjusted as of any date on which the Conversion Ratio is adjusted. The adjusted Stock Prices will be equal to the Stock Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Ratio immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Ratio as so adjusted. The number of Additional Shares in the table above will be adjusted in the same manner and at the same time as the Conversion Ratio as set forth under Section 6.

(e)	The exact Stock Price and Effective Date may not be set forth on the table above, in which case:

(i)

if the Stock Price is between two Stock Prices on the table or the Effective Date is between two Effective Dates on the table, the number of Additional Shares shall be determined by straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices or the earlier and later Effective Dates, as applicable, based on a 365-day year;

(ii)

if the Stock Price is in excess of CDN$100 per share (subject to adjustment in the same manner as the Stock Prices), no Additional Shares will be added to the Conversion Ratio in excess of the Additional Shares that would be added if the Stock Price was CDN$100 per share (subject to adjustment in the same manner as the Stock Prices); and

(iii)

if the Stock Price is less than CDN$10 per share (subject to adjustment in the same manner as the Stock Prices), no Additional Shares will be added to the Conversion Ratio in excess of the Additional Shares that would be added if the Stock Price was CDN$10 per share (subject to adjustment in the same manner as the Stock Prices).

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(f)

Whenever any provision herein requires the Corporation to calculate the Closing Sale Prices or the Stock Prices for purposes of a Fundamental Change or a dividend payment made in Common Shares over a span of multiple days, the Board shall make appropriate adjustments to each to account for any adjustment to the Conversion Ratio that becomes effective, or any event requiring an adjustment to the Conversion Ratio where the Record Date of the event occurs, at any time during the period when such Closing Sale Prices or Stock Prices are to be calculated.

(g)

In the event that the Corporation enters into a merger agreement, a scheme of arrangement or other similar agreement approved by the Board of the Corporation as part of which the Corporation shall merge with a surviving corporation and, as a result of such merger or scheme of arrangement or other agreement, (i) all outstanding Common Shares shall be cancelled and (ii) holders of Common Shares shall be entitled to receive consideration payable wholly in cash (or any other substantially similar merger or sale transaction with substantially similar economic effect), the Corporation shall have a right to exercise the mandatory conversion under Section 10 with respect of the Convertible Preferred Shares notwithstanding that the Liquidity Condition under Section 10(a)(ii) is not at such time met, provided that all other conditions for exercise of the right of mandatory conversion under Section 10 are at such time met and the Holders upon conversion of the Convertible Preferred Shares into Common Shares shall be entitled to participate in the relevant merger, scheme of arrangement or other agreement on the same terms as other holders of Common Shares and Holders shall receive the same consideration payable in connection with such transaction.

6.	Conversion Rights and Anti-Dilution Provisions

(a)

Subject to the terms and conditions hereof, each Holder shall have the right, at any time and from time to time, at the Holder’s discretion, to convert, in whole or in part, its Convertible Preferred Shares into such number of fully paid and non-assessable Common Shares equal to the Conversion Ratio then in effect.

(b)	No fractional Common Shares shall be issued upon conversion of the Convertible Preferred Shares. All such conversions shall be rounded up or down, as the case may be, to the nearest whole Common Share.

(c)

The conversion privilege herein provided for may be exercised by notice in the form attached hereto as Schedule 6(c) given to the Corporation at least 10 days prior to the date of conversion (provided that in the event of the occurrence of a Fundamental Change or a dividend or other distribution in respect of Common Shares such notice period shall be such shorter period as may be necessary in order to allow Holders to participate in the transaction which has given rise to such Fundamental Change as a holder of Common Shares or the applicable dividend or distribution as a holder of Common Shares) accompanied by a certificate or certificates representing the Convertible Preferred Shares

- 10 -

in respect of which the Holder thereof desires to exercise such right of conversion. Such notice shall be signed by the Holder in respect of which such right is being exercised and shall specify the number of Convertible Preferred Shares which the Holder desires to have converted and the date of such conversion, which shall be at least 10 days after receipt of such notice by the Corporation (the “Conversion Date”). On the Conversion Date, the Convertible Preferred Shares which the Holder desires to have converted shall be irrevocably cancelled and the corresponding Common Shares issued, and the Corporation shall issue certificates representing fully paid Common Shares upon the basis herein prescribed and in accordance with the provisions hereof to the Holder represented by the certificate or certificates accompanying such notice. Such conversion shall be deemed to have been made on the Conversion Date, and the person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the holder or holders of record of such Common Shares as of such date. If less than all of the Convertible Preferred Shares represented by any certificate are to be converted, the Holder shall be entitled to receive a new certificate for the Convertible Preferred Shares representing the shares comprised in the original certificate which are not to be converted, provided that to the extent the relevant Convertible Preferred Shares are represented by one or more global certificates, unless the conversion right is exercised in respect of all Convertible Preferred Shares represented by such global certificate, such certificates shall not be cancelled and the exercise of the conversion right shall instead be annotated on the relevant global certificate.

(d)

All Convertible Preferred Shares that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding, and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate on the Conversion Date, except only the right of the Holders thereof to receive Common Shares in exchange therefor. Any Convertible Preferred Shares so converted shall be retired and cancelled.

(e)	The Conversion Ratio will be adjusted, without duplication, upon the occurrence of any of the following events:

(i)

If the Corporation issues Common Shares as a dividend or distribution on substantially all of its Common Shares, or if the Corporation effects a share split or share combination, the Conversion Ratio will be adjusted based on the following formula:

CR₁

CR₀

OS₁

OS₀

where,


CR₀	=	the Conversion Ratio in effect immediately prior to the Close of Business on the Record Date for such dividend or distribution, or immediately prior to the Open of Business on the Effective Date of such share split or share combination, as the case may be;

CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the Record Date for such dividend or distribution, or immediately after the Open of Business on the Effective Date of such share split or share combination, as the case may be;

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OS₀	=	the number of Common Shares outstanding immediately prior to the Close of Business on the Record Date for such dividend or distribution, or immediately prior to the Open of Business on the Effective Date of such share split or share combination, as the case may be; and

OS₁	=	the number of Common Shares outstanding immediately after giving effect to such dividend or distribution, or such share split or share combination, as the case may be.

Any adjustment made under this Section 6(e)(i) shall become effective immediately after the Close of Business on the Record Date for such dividend or distribution, or immediately after the Open of Business on the Effective Date for such share split or share combination, as the case may be. If any dividend or distribution of the type described in this Section 6(e)(i) is declared but not so paid or made, the Conversion Ratio shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Ratio that would then be in effect if such dividend or distribution had not been declared.

(ii)

If the Corporation (a) issues or sells to any person (whether for cash consideration, non-cash consideration or no consideration) any Common Shares at a price per share that is less than 90% of the VWAP of Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the first public announcement of the terms of the issuance or sale of Common Shares to be issued or sold (provided that no such adjustment needs to be made if the issue or sale price per Common Share is CDN$50 or greater (as the same may be adjusted for any share splits or share combinations)) or (b) distributes, issues or sells to any person any rights, options or warrants entitling such person to purchase or subscribe for Common Shares at a price per share that is less than 90% of the VWAP of Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day (x) immediately preceding the Ex-Date of such distribution or (y) immediately preceding the first public announcement of the terms of the issuance or safe of such rights, options or warrants, the Conversion Ratio will be increased based on the following formula:

CR₁

CR₀

(OS₀ + X)

(OS₀ + Y)

where,


CR₀		=		the Conversion Ratio in effect immediately prior to the Close of Business on the Record Date for such distribution or immediately prior to the first public announcement with respect to such issuance or sale (as applicable);

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CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the Record Date for such distribution or immediately after the first public announcement with respect to such issuance or sale (as applicable);

OS₀	=	the number of Common Shares outstanding immediately prior to the Close of Business on the Record Date for such distribution or immediately prior to the first public announcement with respect to such issuance or sale (as applicable);

X	=	the total number of Common Shares to be issued or the total number of Common Shares issuable pursuant to such rights, options or warrants; and

Y	=	the aggregate price paid for such Common Shares or payable to exercise such rights, options or warrants, divided by the VWAP of Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution or the first public announcement with respect to such issuance or sale.

Any increase made under this Section 6(e)(ii) will be made successively whenever any such Common Shares, rights, options or warrants are distributed, issued or sold and shall become effective immediately after the Close of Business on the Record Date for such distribution or the announcement date with respect to such issuance or sale (as applicable). To the extent that Common Shares are not delivered (after the expiration of such rights, options or warrants or otherwise), the Conversion Ratio shall be readjusted, effective as of the date of such expiration or the date when the issuance or safe was contemplated to take place, to the Conversion Ratio that would then be in effect had the increase with respect to the issuance or sale of such Common Shares, rights, options or warrants or the distribution of such rights, options or warrants been made on the basis of delivery of only the number of Common Shares actually delivered. If such rights, options or warrants are not so distributed, issued or sold or Common Shares are not so issued, or sold, the Conversion Ratio shall be decreased, effective as of the date the Board determines not to make such distribution, issuance or sale to be the Conversion Ratio that would then be in effect if such Record Date for such distribution or the announcement in respect of such issuance or sale had not occurred. If the relevant rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Ratio shall not be adjusted until the triggering events occur.

In determining whether any rights, options or warrants entitle the holders to subscribe for or purchase Common Shares at a price less than 90% of such VWAP of the Common Shares for the applicable 5 consecutive Trading Day period, there shall be taken into account any consideration received by the Corporation for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board, which determination shall be final, absent manifest error.

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(iii)

If the Corporation distributes shares of its capital stock, evidences of its indebtedness or its other assets, securities or property or rights, options or warrants to acquire shares of its capital stock or other securities, to all or substantially all holders of Common Shares, excluding:

(A)

dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 6(e)(1) or Section 6(e)(ii) above;

(B)

dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to (or a cash amount paid pursuant to the last paragraph of) Section 6(e)(iv) below; and

(C)

spin-offs as to which the provisions set forth in the last two paragraphs of this Section 6(e)(iii) shall apply,

then the Conversion Ratio will be increased based on the following formula:

CR₁

CR₀

SP₀

SP₀ – FMV

where,


CR₀	=	the Conversion Ratio in effect immediately prior to the Close of Business on the Record Date for such distribution;

CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the Record Date for such distribution;

SP₀	=	the VWAP of the Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such distribution; and

FMV	=	the fair market value as of the Record Date for such distribution (as determined by using the difference between (i) the VWAP of Common Shares over 5 consecutive Trading Day period immediately preceding, but excluding, the Ex-Date for such distribution, and (ii) the VWAP of Common Shares over 5 consecutive Trading Day period starting on the Ex-Date for such distribution) of the Corporation’s shares, evidences of indebtedness, assets, securities, property, rights, options or warrants distributed with respect to each outstanding Common Share.

Any increase made under the portion of this Section 6(e)(iii) above will become effective immediately after the Close of Business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Ratio shall be decreased, effective as of the date the Board determines not to pay the distribution, to be the Conversion Ratio that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “FMV” (as defined above; provided that to the extent the Corporation has received a third party valuation opinion from an

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investment bank or accounting firm setting out the fair market value (however designated) of the distributed shares, evidences of indebtedness, assets, securities, property, rights, options or warrants, the “FMV” for the purposes of this paragraph shall be the fair market value determined by such opinion if greater than “FMV” as defined above) is equal to or greater than “SP0”(as defined above), in lieu of the foregoing increase, each Holder shall receive, for each Convertible Preferred Share, at the same time and upon the same terms as holders of Common Shares, the amount and kind of its shares, evidences of the Corporation’s indebtedness, its oilier assets, securities or property or rights, options or warrants to acquire its shares or other securities that such Holder would have received as if such Holder owned a number of Common Shares equal to the Conversion Ratio in effect on the Record Date for the distribution.

With respect to an adjustment pursuant to this Section 6(e)(iii) where there has been a payment of a dividend or other distribution on Common Shares consisting solely of shares of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit where such shares or similar equity interest is, or will be when issued, listed or admitted for trading on a Canadian, U.K. or U.S. national securities exchange, which is referred to as a “spin-off,” the Conversion Ratio will be increased based on the following formula:

CR₁

CR₀

FMV + MP₀

MP₀

where,


CR₀	=	the Conversion Ratio in effect immediately prior to the Close of Business on the fifth Trading Day immediately following, and including, the Ex-Date for the spin-off;

CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the fifth Trading Day immediately following, and including, the Ex-Date for the spin-off;

FMV	=	the VWAP of the shares or similar equity interest distributed to holders of Common Shares applicable to one Common Share over the 5 consecutive Trading Day period immediately following, and including, the Ex-Date for the spin-off; and

MP₀	=	the VWAP of the Common Shares over the 5 consecutive trading-day period immediately following, and including, the Ex-Date for the spin-off.

The adjustment to the Conversion Ratio under the preceding paragraph shall become effective at the Close of Business on the 5^th Trading Day immediately following, and including, the Ex-Date for the spin-off; provided that, for purposes of determining the Conversion Ratio, in respect of any conversion during the 5 Trading Days following, and including, the Ex-Date of any spin-off, references

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within the portion of this Section 6(e)(iii) related to “spin-offs” to 5 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the Ex-Date of such spin-off and the relevant conversion date.

(iv)

If the Corporation pays a dividend or makes a distribution consisting exclusively of cash to all or substantially all holders of Common Shares, (excluding any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, any cash distributed in a Reorganization Event and any dividend or distribution in connection with the Corporation’s Liquidation) the Conversion Ratio will be increased based on the following formula:


		CR₁ = CR₀ x		SP₀
		CR₁ = CR₀ x		SP₀ - C


where,

CR₀	=	the Conversion Ratio in effect immediately prior to the Close of Business on the Record Date for such dividend or distribution;

CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the Record Date for such dividend or distribution;

SP₀	=	the VWAP of the Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such dividend or distribution; and

C	=	the amount in cash per Common Share distributed by the Corporation to all or substantially all holders of Common Shares.

Any increase pursuant to this Section 6(e)(iv) shall become effective immediately after the Close of Business on the Record Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Ratio shall be decreased, effective as of the date the Board determines not to pay such dividend or make such distribution, to be the Conversion Ratio that would then be in effect if such dividend or distribution had not been declared.

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each Convertible Preferred Share, at the same time and upon the same terms as holders of Common Shares, the amount of cash that such Holder would have received as if such Holder owned a number of Common Shares equal to the Conversion Ratio on the Record Date for such cash dividend or distribution.

(v)

If the Corporation or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer (i.e. issuer bid) for Common Shares and the cash and value of any other consideration included in the payment per Common Share exceeds the VWAP of the Common Shares over the 5 consecutive Trading Day

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period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Ratio will be increased based on the following formula:


		CR₁ = CR₀ x		AC + (SP₁ x OS₁)
		CR₁ = CR₀ x		OS₀ x SP₁


where,

CR₀	=	the Conversion Ratio in effect immediately prior to the Close of Business on the last Trading Day of the 5 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR₁	=	the Conversion Ratio in effect immediately after the Close of Business on the last Trading Day of the 5 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

AC	=	the aggregate value of all cash and any other consideration (as determined by the Board, which determination shall be final, absent manifest error) paid or payable for shares purchased in such tender or exchange offer;

OS₀	=	the number of Common Shares outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer);

OS₁	=	the number of Common Shares outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and

SP₁	=	the VWAP of the Common Shares over the 5 consecutive Trading Day period commencing on, and including, the Trading Day immediately succeeding the date such tender or exchange offer expires.

The increase to the Conversion Ratio under the preceding paragraph will occur at the Close of Business on the 5^th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Ratio, in respect of any conversion during the 5 Trading Days immediately following, and including, the Trading Day next succeeding the date that any such tender or exchange offer expires, references within this Section 6(e)(v) to 5 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the date such tender or exchange offer expires and the relevant conversion date.

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In the event that the Corporation is, or one of its subsidiaries is, obligated to purchase Common Shares pursuant to any such tender offer or exchange offer, but the Corporation is, or such subsidiary is, permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Ratio shall be readjusted to be such Conversion Ratio that would then be in effect if such tender offer or exchange offer had not been made.

(f)

The Corporation will not be required to adjust the Conversion Ratio for any of the transactions described in Sections 6(e)(ii) through 6(e)(iv) above (other than for share splits or share combinations) if the Corporation makes provision for each Holder to participate in the transaction, at the same time as holders of Common Shares participate, without conversion, as if such Holder held a number of Common Shares equal to the Conversion Ratio in effect on the Record Date, announcement date or Ex-Date, as the case may be, for such transaction, multiplied by the number of Convertible Preferred Shares held by such Holder. Any such participation by Holders will be subject to the approval of the Toronto Stock Exchange, or if the Common Shares are not listed on the Toronto Stock Exchange the approval of such other principal national securities exchange on which the Common Shares are listed.

(g)

Notwithstanding anything herein to the contrary, the Corporation will not adjust the Conversion Ratio pursuant to Section 6(e) unless the adjustment would result in a change of at least 1% in the Conversion Ratio then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of, and together with, the next subsequent adjustment, if any, which, together with any adjustment or adjustments so carried forward, shall amount to a change of at least 1% in such Conversion Ratio; provided however, that the Corporation shall make such carried-forward adjustments, regardless of whether the aggregate adjustment is less than 1%, (i) on December 31 of each year, (ii) on the Conversion Date for any converted Convertible Preferred Shares, (iii) upon the occurrence of a Fundamental Change and (iv) in the event that the Corporation exercises its mandatory conversion right pursuant to Section 10. Adjustments to the Conversion Ratio will be calculated to the nearest 1/10,000th. No adjustment to the Conversion Ratio will be made pursuant to Sections 6(e)(ii), (iii) and (iv) above if Holders may participate, at the same time, upon the same terms and otherwise on the same basis as holders of Common Shares and solely as a result of holding Convertible Preferred Shares, in the transaction that would otherwise give rise to such adjustment as if they held, for each Convertible Preferred Share, a number of Common Shares equal to the maximum Conversion Ratio then in effect.

(h)	The Conversion Ratio will not be adjusted:

(i)

Upon issuance of Common Shares pursuant to any present or future employee benefit or other incentive plan providing for the reinvestment of dividends or interest payable on the Corporation’s shares, securities or evidences of indebtedness and the investment of additional optional amounts in Common Shares under any plan which (x) is in compliance with the Toronto Stock Exchange rules and the rules and regulations of any other exchange on which the Corporation’s shares are listed and (y) provides that the exercise price of the applicable options or other security or rights granted thereunder is equal to or greater than a price at or near the applicable closing price on the business day

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prior to the grant thereof (it being understood that a price which is 90% or greater than the VWAP of Common Shares over the 5 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution or applicable date of such grant shall be a exercise price compliant with this clause (y)) (such a plan or program in compliance with both clauses (x) and (y), a “Compliant Plan”);

(ii)

Upon issuance of any Common Shares or rights or warrants to purchase Common Shares pursuant to any present or future employee benefit or other incentive plan or program assumed by the Corporation or any of its subsidiaries. Following such assumption, any grant of any Common Shares or rights or warrants to purchase Common Shares shall be pursuant to any present or future Compliant Plan; or

(iii)

Upon the issuance of any Common Shares pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the Issue Date.

(i)

If the Corporation has in effect a rights plan while any Convertible Preferred Shares remain outstanding, Holders will receive, upon a conversion of their Convertible Preferred Shares, in addition to Common Shares, a corresponding number of rights in accordance with the rights plan. However, if prior to any conversion, the rights have separated from the Common Shares in accordance with the provisions of the applicable rights plan so that Holders would not be entitled to receive any rights in respect of Common Shares delivered upon conversion of the Convertible Preferred Shares, the Conversion Ratio will be adjusted at the time of separation as if the Corporation had distributed to all holders of Common Shares, shares of the Corporation, evidences of indebtedness, assets, securities, property, rights, options or warrants as described in Section 6(e)(iii) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. Any distribution of rights pursuant to a rights plan that would allow Holders to receive, upon conversion, in addition to any Common Shares, the rights described therein (unless such rights have separated from the Common Shares) shall not constitute a distribution of rights that would entitle Holders to an adjustment to the Conversion Ratio.

(j)	In the case of:

(A)

any recapitalization, reclassification or change of Common Shares (other than changes resulting from a share split or combination),

(B)

any consolidation, amalgamation, merger or combination involving the Corporation,

(C)

any sale, lease or other transfer to a third party of the Corporation’s consolidated assets and subsidiaries substantially as an entirety, or

(D)

any statutory share exchange of the Corporation’s securities with another person (other than in connection with a consolidation, amalgamation, merger or combination falling within paragraph (B) above),

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in each case, as a result of which Common Shares are converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such transaction or event, a “Reorganization Event”), then, at and after the effective time of the Reorganization Event, the right to convert each Convertible Preferred Share into Common Shares will be changed into a right to convert such share into the kind and amount of shares, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of Common Shares equal to the Conversion Ratio immediately prior to such Reorganization Event would have owned or been entitled to receive upon such Reorganization Event (such stock, securities or other property or assets, “Reference Property”). In the event holders of Common Shares have the opportunity to elect the form of consideration to be received in such Reorganization Event, the Reference Property into which the Convertible Preferred Shares will be convertible will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Shares that affirmatively make such an election. The Corporation may not become a party to any such Reorganization Event unless its terms are consistent with this Section 6(j). Notwithstanding Section 6(e), no adjustment to the Conversion Ratio will be made for any Reorganization Event to the extent shares, securities or other property or assets become the Reference Property receivable upon conversion of the Convertible Preferred Shares.

In these terms of the Convertible Preferred Shares, if Common Shares have been replaced by Reference Property as a result of any such Reorganization Event, references to Common Shares are intended to refer to such Reference Property.

(k)

Upon the occurrence of each adjustment or readjustment of the Conversion Ratio under this Section 6, the Corporation shall compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any Holder, furnish or cause to be furnished to such Holder a similar certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Ratio then in effect, and (iii) the number of Common Shares which then would be received upon the conversion of the Convertible Preferred Shares.

7.	Recurring Conversion Ratio Adjustment

(a)

In addition to the adjustments to the Conversion Ratio provided for in Section 6 above, the Conversion Ratio shall be adjusted every six (6) months from the Issue Date by multiplying the then in effect Conversion Ratio by the Conversion Ratio Adjustment Factor (the “Recurring Conversion Ratio Adjustment”).

(b)

If any conversion of the Convertible Preferred Shares or Liquidation of the Corporation occurs between Recurring Conversion Ratio Adjustment dates, the Conversion Ratio shall be adjusted pro rata for the days accrued since the last Recurring Conversion Ratio Adjustment date based on a 365-day year.

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8.	Undertakings

(a)	The Corporation undertakes that it shall:

(i)

not incur, and not permit any of its Subsidiaries to incur, any Debt; provided that the Corporation and/or its Subsidiaries may incur (x) additional Debt if the ratio of (i) Consolidated Net Debt to (ii) the Corporation’s LTM EBITDA (in each case as of the then most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date on which such additional Debt is incurred (such applicable four fiscal quarter period, the “LTM Period”)) would have been 6.7 to 1.0 or less, in each case determined on a pro forma basis, including as if the additional Debt had been incurred and the application of proceeds therefrom had occurred at the beginning of such four quarter period (the “Leverage Ratio Test”) and/or (y) Permitted Debt (in the case of this clause (y), notwithstanding whether or not the Leverage Ratio Test referred to above is met);

(ii)

not issue any equity securities with a ranking pari passu or superior to the Convertible Preferred Shares;

(iii)

not, and not permit any of its Subsidiaries to, acquire any property, person or business (x) in the case of any single acquisition or series of related acquisition transactions, where the consideration payable in respect thereof is in excess of US$250 million or (y) if, since the Issue Date, the Group has already made acquisitions where the aggregate consideration in respect thereof is at least US$500 million (it being understood that (a) ordinary course acquisitions of inventory, equipment, material or other assets or property and (b) the completion of the Transactions shall not be deemed acquisitions for purposes of this provision), in each case, unless consented to by at least 66 2/3% of the Holders either (A) through a written instrument evidencing the Holders consent or (B) by a vote of the Holders at a meeting held and convened in accordance with the bylaws of the Corporation and the Québec Business Corporations Act;

(iv)

(x) not require a mandatory conversion if such mandatory conversion would require a regulatory filing or disclosure in respect of any Holder in excess of what is required for an institutional investor waiver in New Jersey; and (y) notify GSO and BlackRock in writing at least 60 days prior to taking any action (including, without limitation, making any application or filing) as a result of which any regulatory filing or disclosure would be required in respect of GSO Group or BlackRock Group in excess of what is required for an institutional investor waiver in New Jersey;

(v)

cooperate (including without limitation providing jurisdictional specific revenue, asset values and market share data) with Holders and their counsel (to the extent reasonably requested to do so) in connection with any anti-trust or competition filing, notification, review or analysis by such holder arising out of the Transactions and/or the conversion of any Convertible Preferred Shares or exercise of any related rights (and to the extent applicable, jointly or independently make appropriate filings with the applicable authority); it being understood that to the extent any such information would constitute material non-public or other price sensitive or confidential information such data may be provided on a counsel-to-counsel-only basis;

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(vi)

within 15 months following the Issue Date, obtain and maintain a second listing of Common Shares on the New York Stock Exchange, NASDAQ or the Main Market of the London Stock Exchange (premium listing), provided that to the extent the Common Shares are listed on the London Stock Exchange, the Corporation shall procure that any Common Shares issued upon conversion, or exercise of rights under, the Convertible Preferred Shares or any other instruments convertible into Common Shares issued in connection with the Transactions are listed on the London Stock Exchange substantially concurrently with such conversion or exercise; the Corporation shall notify GSO and BlackRock in writing of its intention to make an application for such listing or registration at least 60 days prior to the date when the application is filed; and

(vii)

comply with the quarterly, annual and periodic public disclosure requirements of the TSX and all such reports shall be filed within the ordinary course time periods prescribed thereby without delay, and the Corporation shall comply with the Registration Rights Agreement. The Corporation shall also furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the US Securities Act.

To the extent the Corporation is in breach of the undertakings set out in paragraphs (i) or (ii) above, the Conversion Ratio Adjustment Factor shall be increased by 0.02 per annum (calculated pro rata for the period for which the Corporation has been in breach of the relevant undertaking in the relevant six-month period) for each year in which the Corporation is in breach of such undertaking and each undertaking so breached. To the extent the Corporation is in breach of the undertaking set out in paragraph (iii) above, the Conversion Ratio Adjustment Factor shall be increased by 0.04 per annum (calculated pro rata for the period for which the Corporation has been in breach of the undertaking in the relevant six-month period) for each year in which the Corporation is in breach of such undertaking. To the extent the Corporation is in material breach of any of the undertakings set out in paragraphs (iv), (v), (vi) or (vii) above, and does not cure such breach within 30 days of receipt of a written notice setting out the breach in reasonable detail, the Conversion Ratio Adjustment factor shall be increased by 0.06 per annum (calculated pro rata for the period for which the Corporation has been in breach of the relevant undertaking in the relevant six-month period) for each year in which the Corporation has been in material breach of such undertaking without curing same and each undertaking so breached. These undertakings shall cease to apply when GSO Group ceases to hold at least 50% of the Convertible Preferred Shares issued to GSO Group on the Issue Date and BlackRock Group ceases to hold at least 50% of the Convertible Preferred Shares issued to BlackRock Group on the Issue Date, The undertakings may be waived in writing, in whole or in part, by 66 2/3% of the Holders either (A) through a written instrument evidencing the Holders consent or (B) by a vote of the Holders at a meeting held and convened in accordance with the bylaws of the Corporation and the Québec Business Corporations Act.

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(b)

Each Holder undertakes that, in the event that a gaming authority of any jurisdiction in which the Corporation currently or in the future conducts or proposes to conduct gaming operations requires that a Holder make a filing or disclosure not more extensive than that required for an institutional investor waiver in New Jersey, such holder agrees to provide reasonable cooperation to the Corporation with respect to such filing or disclosure. For the avoidance of doubt, this undertaking does not imply such Holder shall be obliged to make any regulatory filing or disclosure which would be required in respect of the relevant Holder in excess of what is required for an institutional investor waiver in New Jersey or that the Holder has any obligation to obtain the relevant institutional investor waiver or any other authorization, except for the obligation to provide reasonable cooperation as set out in the preceding sentence.

If (x) a Holder is in breach of the undertaking referred to above, and (y) the relevant Holder does not cure such breach within 30 days of receipt of a written notice setting out the breach in reasonable detail, in the event that the relevant Holder that was or is in breach exercises its right of conversion pursuant to Section 6 hereof or if the Convertible Preferred Shares are subject to the mandatory conversion pursuant to Section 10 hereof, the Conversion Ratio Adjustment Factor in respect of Convertible Preferred Shares held by such Holder shall, for the purposes of such conversion, be deemed to have been decreased by 0.01 per annum (calculated pro rata for the period for which the Holder has been in breach of the undertaking in the relevant semi-annual period) for each year in which the relevant Holder is in breach of such undertaking.

(c)

If any conversion of the Convertible Preferred Shares or Liquidation of the Corporation occurs before the adjustment pursuant to the paragraphs (a) and (b) above takes effect, the Conversion Ratio shall be adjusted pro rata for the period for which the Corporation or the Holder, as the case may be, has been in breach of the relevant undertaking.

9.	Liquidation Preference

(a)

In the event of any Liquidation of (he Corporation, whether voluntary or involuntary, each Holder shall be entitled to receive and to be paid out of the assets of the Corporation available for distribution to its shareholders the greater of: (i) the Initial Liquidation Preference multiplied by an adjustment factor calculated by dividing the Conversion Ratio then in effect by the Initial Conversion Ratio, and (ii) the amount that the Holder would have been entitled to receive if the Convertible Preferred Shares were converted into Common Shares immediately prior to such Liquidation (the “Liquidation Preference”).

(b)

If, upon a Liquidation, the amount available for distribution among the Holders of all outstanding Convertible Preferred Shares is insufficient to permit the payment of the Liquidation Preference in full, then the amount available for distribution shall be distributed among the Holders of the Convertible Preferred Shares rateably in proportion to the relative Liquidation Preference of the Convertible Preferred Shares held by such Holders.

(c)

Neither the sale (for cash, shares, securities or other consideration) of all or substantially all the assets or business of the Corporation (other than in connection with the liquidation, winding-up or dissolution of the Corporation) nor the merger or consolidation of the Corporation into or with any other person shall be deemed to be a Liquidation for the purposes of this Section 9.

(d)	After the payment to the Holders of the Liquidation Preference provided for in this Section 9, the Holders as such shall have no right or claim to any of the remaining assets of the Corporation.

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10.

Mandatory Conversion

(a)

At any time on or after the dale which is three (3) years from the Issue Date, the Corporation shall have the right, at its option, to give notice of its election to cause all or, subject to Section 10(b) below, part of the outstanding Convertible Preferred Shares to be automatically converted into that number of Common Shares for each Convertible Preferred Share to be so converted equal to the Conversion Ratio in effect on the Mandatory Conversion Date. The Corporation may exercise its right to cause a mandatory conversion pursuant to this Section 10 only if the following two (2) conditions are satisfied (the “Price/Liquidity Conditions”) (i) the Closing Sale Price of the Common Shares exceeds 175% of the Initial Conversion Price for at least 20 Trading Days (whether or not consecutive) in a period of 30 consecutive Trading Days, and (ii), save as provided for under Section 5(g) hereof, the average daily volume on any 20 Trading Days (whether or not consecutive) in the 30 consecutive Trading Day period referred to above is at least 1.75 million Common Shares (the “Liquidity Condition”); provided that the Corporation may only exercise such mandatory conversion, whether in whole or in part, if the applicable 30-day period in which the Price/Liquidity Conditions are satisfied has ended not more than 60 days before the Mandatory Conversion Date. Any forced conversion shall also be conditional upon (x) obtaining all required regulatory approvals (including relevant anti-trust approvals) and, to the extent applicable, receipt by GSO and BlackRock prior to the conversion or substantially concurrently with such conversion of all required institutional investor waivers or other gaming regulatory approvals required as a result thereof (it being understood that neither the GSO Group nor BlackRock Group shall have any obligation to make any regulatory filing or disclosure in excess of what is required for an institutional investor waiver in New jersey) and (y) the GSO Group, alter giving effect to such mandatory conversion, (i) owning (when taken together with other Common Shares of then held) less than 20% of the voting rights attached to the Corporation’s securities at the time of conversion, including any securities held by parties acting jointly or in concert with the GSO Group (calculated on a partially diluted basis) and (ii) not being in violation of its undertaking with the Toronto Stock Exchange dated on or around the Issue Date as a result of such mandatory conversion unless the compliance with this clause (y) is waived, or consented to, by both GSO and the Toronto Stock Exchange, Any partial conversion shall be applied on a pro rata basis in respect of all Convertible Preferred Shares.

(b)

The Corporation may only require a partial conversion of the outstanding Convertible Preferred Shares as provided in this Section 10 if (i) a mandatory conversion of all of the outstanding Convertible Preferred Shares would require the GSO Group or the BlackRock Group to make regulatory filings or disclosures in excess of what is required for an institutional investor waiver in New Jersey or (ii) a mandatory conversion of all of the outstanding Convertible Preferred Shares may not be exercised as a result of the condition under Section 10(a)(y) not being satisfied. In case of such partial mandatory

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conversion the Corporation shall be obliged to require conversion in respect of the maximum part of Convertible Preferred Shares that may converted without triggering the filing and disclosure requirements referred to in the previous sentence or without causing a breach of condition under Section 10(a)(y).

(c)

To exercise the mandatory conversion right described in Section 10(a), the Corporation must issue a press release for publication on any broadly disseminated news or press release service selected by the Corporation prior to the Open of Business on the fifth Trading Day following any date on which the conditions described in Section 10(a) above are met, announcing such a mandatory conversion. The Corporation shall also give notice by mail or by publication (with subsequent prompt notice by mail) to the Holders (not later than five Business Days after the date of the press release) of the mandatory conversion announcing the Corporation’s intention to convert the Convertible Preferred Shares. The conversion dale will be a date selected by the Corporation (the “Mandatory Conversion Date”) and will be no earlier than 30 and no later than 45 calendar days after the dale on which the Corporation issues the press release described in this Section 10(c).

(d)

In addition to any information required by applicable law or regulation, the press release and notice of a mandatory conversion described in Section 10(c) shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) whether the mandatory conversion applies to all or part of the outstanding Convertible Preferred Shares; and (iii) the number of Common Shares to be issued upon conversion of each Convertible Preferred Share.

(e)	On and after the Mandatory Conversion Date, all rights of Holders of such Convertible Preferred Shares shall terminate except for the right to receive the whole Common Shares issuable upon conversion thereof.

(f)

On the Mandatory Conversion Date, the Convertible Preferred Shares which the Corporation desires to have converted shall be irrevocably cancelled and the corresponding Common Shares issued, and the Corporation shall issue certificates representing fully paid Common Shares upon the basis herein prescribed and in accordance with the provisions hereof to each Holder entitled thereto. Such conversion shall be deemed to have been made on the Mandatory Conversion Date and the person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the holder or holders of record of such Common Shares as of such date.

11.

Reservation of Common Shares Issuable Upon Conversion

The Corporation shall at all times reserve and keep available out of its authorized but unissued Common Shares, solely for the purpose of effecting the conversion of the then outstanding Convertible Preferred Shares, such number of its Common Shares as shall from time to time be sufficient to effect the conversion of all outstanding Convertible Preferred Shares; and if at any time the number of authorized but unissued Common Shares shall not be sufficient to effect the conversion of all then outstanding Convertible Preferred Shares, in addition to such other remedies as shall be available to the Holder of such Convertible Preferred Shares, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common Shares to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging its best efforts to obtain the requisite Board and shareholder approval of any necessary amendment to its Articles.

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12.

Transferability

The Convertible Preferred Shares will not be listed on any exchange but will be freely transferable at the option of a Holder, subject only to applicable securities laws limitations. All Common Shares issued in respect of Convertible Preferred Shares will be listed on the Toronto Stock Exchange or other principal national securities exchange and shall be freely transferable at the option of the Holder without restriction, subject only to applicable securities laws limitations.

13.

Other Provisions

(a)

Except as otherwise provided herein, all notices to be given hereunder with respect to the Convertible Preferred Shares shall be deemed to be validly given to the Holders if sent by facsimile transmission, first class mail, postage prepaid, by letter or circular addressed to such Holders at their addresses appearing in the Corporation’s registers and shall be deemed to have been effectively given, in the case of facsimile transmission, on the first Business Day following transmission, and, in the case of first class mail, postage prepaid, by letter or circular, on the third Business Day following the transmission or mailing. Error or omission in giving notice or accidental failure to mail notice to any Holder or the inability of the Corporation to give or mail any notice due to any event beyond the reasonable control of the Corporation shall not invalidate any action or proceeding founded thereon.

(b)

If any notice given in accordance with the foregoing paragraph would be unlikely to reach the Holders to whom it is addressed in the ordinary course of post by reason of an interruption in mail service which is communicated to the Corporation by the relevant postal service, whether at the place of dispatch or receipt or both, the Corporation shall give such notice by publication at least once in the city of Montreal and in the city of New York (or in such of those cities as, in the opinion of the Corporation/Agent, is sufficient in the particular circumstances), each such publication to be made in a daily newspaper of general circulation in the designated city. Any notice given to Holders by publication shall be deemed to have been given on the day on which publication shall have been effected at least once in each of the newspapers in which publication was required.

(c)	Any payment required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day and no interest on such payment will accrue or accumulate, as the case may be, in respect of such delay.

(d)	The Corporation shall be entitled to rely on the certificates of Holders with respect to their holdings of Convertible Preferred Shares, Common Shares or other instruments convertible into, or entitling the holder to delivery of Common Shares.

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SCHEDULE 6(c)

FORM OF NOTICE OF CONVERSION

To:

AMAYA GAMING GROUP INC. (the “Corporation”)

This notice is given pursuant to Section 6(c) of the share terms (the “Share Terms”) attaching to the Convertible Preferred Shares represented by this certificate and all capitalized words and expressions used in this notice that are defined in the Share Terms have the meanings ascribed to such words and expressions in such Share Terms.

The undersigned hereby notifies the Corporation that pursuant to the Share Terms and the conversion right referred to below, the undersigned desires to exercise its conversion privilege in respect of the following Convertible Preferred Shares in accordance with Article 6 of the Share Terms:

all share(s) represented by certificate no. ; or

share(s) only represented by certificate no. .

The undersigned hereby notifies the Corporation that the Conversion Date shall be .

NOTE:

The Conversion Date must be a Business Day and roust be at least 10 days (unless provided otherwise in the Share Terms) after the date upon which this notice is received by the Corporation. If no such Business Day is specified above, the Conversion Date shall be deemed to be the 10th day after the date on which this notice is received by the Corporation, or, if such date is not a Business Day, the first Business Day which follows such 10 day period.

The undersigned hereby represents and warrants to the Corporation that the undersigned has good title to. and owns, the Convertible Preferred Share(s) represented by this certificate free and clear of all liens, claims, encumbrances, security interests, hypothecs and adverse claims.


Date:

Signature of Shareholder

Name of Shareholder

NOTE: The information below must be completed and this notice, together with such additional documents as the Corporation may require, must be deposited with the Corporation at its

- 27 -

registered office in the Province of Quebec. The Common Shares resulting from the conversion of the Convertible Preferred Shares will be issued and registered in the name of the shareholder as it appears on the register of the Corporation, unless the form appearing immediately below is duly completed.



Name of person in whose name Common Shares are to be registered, issued				Date:

or delivered (please print)


Street Address or P.O. Box				Signature of Shareholder


City, Province

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REZ-128 (2014-05)

Certificat de modification

Loi sur les sociétés par actions (RLRQ, chapitre S-31.1)

J’atteste que la société par actions

GROUPE DE JEUX AMAYA INC.

et sa version

AMAYA GAMING GROUP INC.

a modifié ses statuts en vertu de la Loi sur les sociétés par actions afin de changer son nom et sa version pour

AMAYA INC.

et d’y intégrer les autres modifications mentionnées dans les statuts de modification ci-joints.

Le 28 novembre 2014

Déposé au registre le 28 novembre 2014 sous le

numéro d’entreprise du Québec 1162017413.

LOGO

Registraire des entreprises

Revenu Québec

REZ-909 (2012-11)

Page 1 de 1

Statuts de modification

Numéro d’entreprise

du Québec (NEQ) :

1162017413

Loi sur les sociétés par actions, L.R.Q., c. S-31.1

1	Identification de la société

Nom de la société par actions

GROUPE DE JEUX AMAYA INC.

Version(s) du nom de la société dans une autre langue que le français, s’il y a lieu

AMAYA GAMING GROUP INC.

2	Modification des statuts

2.1

Modification relative au nom

Nom de la société par actions

AMAYA INC.

2.2

Autres modifications

The rights, privileges, restrictions and conditions pertaining to the Common Shares of the Corporation set forth in the schedule attached hereto are added to those set forth in Schedule A attached to the Articles of Amendment of the Corporation which were confirmed by Certificate of Amendment dated May 11, 2010.

2.3

Date et heure à attribuer au certificat, s’il y a lieu

Date Heure

3	Correction des statuts

4	Signature

Nom de l’administrateur ou du dirigeant autorisé

David Baazov

Signature électronique de

David Baazov

Réservé à l’administration

Numéro de référence de la demande : 020200025780413

Désignation numérique :

Revenu Québec

[Unofficial Translation]

CERTIFICATE OF AMENDMENT

Business Corporations Act, CQLR c S-31.1

I hereby certify that the articles of the corporation Amaya Gaming Group Inc. were amended on November 28, 2014 pursuant to the Business Corporations Act, as described in the attached articles of amendment.

Filed at the Business Register on November 28, 2014 under the Quebec Enterprise Number 1162017413.

1. Corporate name

GROUPE DE JEUX AMAYA INC. / AMAYA GAMING GROUP INC.

2. Amendment of articles

2.1 Amendment of corporate name

AMAYA INC.

2.2 Other amendments

2.3 Date and time to assign to certificate, if any

Date Time

3. Correction of articles

4. Signature

Name of director of authorized officer

David Baazov

Electronic signature of

David Baazov

SCHEDULE

Rights Privileges, Restrictions and Conditions Applicable to Common Shares – Redemption Provisions

(a)	For purposes of this Schedule, the following terms will have the meanings specified below:

“Board” means the board of directors of the Corporation.

ii.

“Gaming” means the conduct of any gaming or gaming-related activities, including, without limitation, the provision of Internet gaming activities (including but not limited to, the operation of related platforms and the provision of software), the use, manufacture, sale or distribution of gaining devices, ticket technology, casino cage and casino credit equipment and services, and any related and associated equipment and services, and the provision of any type of services or equipment pursuant to a contract, agreement, relationship or otherwise with any holder or beneficiary of a Gaming License.

iii.

“Gaming Authority” means any international, foreign, federal, provincial, state, local, tribal and other regulatory and licensing body or agency with authority over Gaming.

iv.

“Gaming Licenses” means all licenses, permits, approvals, orders, authorizations, registrations, findings of suitability, franchises, exemptions, waivers and entitlements issued by a Gaming Authority required for, or relating to, the conduct of Gaming.

“ownership” (and derivatives thereof) means (a) legal ownership as evidenced in the Corporation’s share register, (b) beneficial ownership pursuant to the definition of “beneficiary” in Section 2 of the Business Corporations Act (Quebec), as the same may be amended from time to time, or (c) the power to exercise control or direction over a security.

vi.

“person” means an individual, partnership, corporation, limited liability corporation, trust or any other entity.

vii.

“Redemption” has the meaning ascribed thereto in Section (e) of this Schedule.

viii.

“Redemption Date” means the date on which the Corporation will redeem and pay for the Shares pursuant to Section (e) of this Schedule. The Redemption Date will be not less than thirty (30) Trading Days following the date of the Redemption Notice unless a Gaming Authority requires that the Shares be redeemed as of an earlier date, in which case, the Redemption Date will be such earlier date and if there is an outstanding Redemption Notice, the Corporation will issue an amended Redemption Notice reflecting the new Redemption Date forthwith.

ix.

“Redemption Notice” has the meaning ascribed thereto in Section (g) of this Schedule.

“Redemption Price” means the price per Share to be paid by the Corporation on the Redemption Date for the Redemption and will be equal to the price set forth in the Valuation Opinion, which may, if instructed by the Corporation, take into consideration matters specified by any Gaming Authority.

xi.

“Shares” means the Common Shares of the Corporation,

xii.

“Significant Interest” means ownership of five percent (5%) or more of the Shares.

xiii.

“Subject Shareholder” means a person, a group of persons acting in concert or a group of persons who, the Board reasonably believes, are acting in concert

xiv.

“Trading Day” means a day on which the Shares (a) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business on such day, and (b) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Shares.

xv.

“Unsuitable Person” means (a) any person (including a Subject Shareholder) who a Gaming Authority has determined to be unsuitable to own Shares; or (b) any person (including a Subject Shareholder) whose ownership of Shares may result in the loss, suspension or revocation (or similar action) with respect to any Gaming License or in the Corporation being unable to obtain a new Gaming License in the normal course, including, but not limited to, as a result of such person’s failure to apply for a licensing or a suitability review from or to otherwise fail to comply with the requirements of a Gaming Authority, as determined by the Board, in its sole discretion, after consultation with legal counsel and if a license application has been filed after consultation with the applicable Gaming Authority.

xvi.

“Valuation Opinion” has the meaning set out in Section (e) of this Schedule.

(b)

Subject to Section (d) of this Schedule, no Subject Shareholder will acquire or dispose of directly or indirectly, in one or more transactions, a Significant Interest without providing 15 days’ advance written notice to the Corporation by mail sent to the Corporation’s registered office to the attention of the Corporate Secretary.

(c)

If the Board reasonably believes that a Subject Shareholder may have failed to comply with the provisions of Section (b) of this Schedule, the Corporation may apply to the Superior Court of Quebec, or such other court of competent jurisdiction for an order directing that the Subject Shareholder disclose the number of Shares held.

(d)	The provisions of Sections (b) and (c) of this Schedule will not apply to the ownership, acquisition or disposition of Shares as a result of:

any transfer of Shares occurring by operation of law including, inter alia, the transfer of Shares of the Corporation to a trustee in bankruptcy;

ii.

an acquisition or proposed acquisition by one or more underwriters or portfolio managers who hold Shares for the purposes of distribution to the public or for the benefit of a third party provided that such third party is in compliance with Section (b); or

iii.

the conversion, exchange or exercise of securities of the Corporation (other than the Shares) duly issued or granted by the Corporation, into or for Shares, in accordance with their respective terms.

(e)

At the option of the Corporation, Shares owned by an Unsuitable Person may be redeemed by the Corporation (the “Redemption”) for the Redemption Price out of funds lawfully available on the Redemption Date. Shares redeemable pursuant to this Section (e) will be redeemable at any time and from time to time pursuant to the terms hereof. Prior to exercising the Redemption, the Corporation shall obtain, at its expense, a written valuation and fairness opinion from an investment banking firm of nationally recognized standing in the United States of America (qualified to perform such task and which is disinterested in the contemplated Redemption and has not in the then past two years provided services for a fee to the Corporation or its affiliates) as to the value of the Shares to be redeemed (including taking into account the percentage of the total outstanding Shares represented by the Shares being redeemed) as of a date not more than thirty (30) Trading Days prior to the date of the Redemption Notice and as to the appropriate and fair form(s) of consideration (and the terms thereof) to be paid by the Corporation to the holder of such Shares in connection with such Redemption (the “Valuation Opinion”). The Redemption Price (which may include payment in cash, promissory note, or both), the form, terms (including date) of payment will be as set forth in the Valuation Opinion and will be paid on the Redemption Date.

(f)	In the case of a Redemption of only a portion of the Shares owned by a Subject Shareholder who is an Unsuitable Person, the Board will select the Shares to be redeemed, by lot or in any other manner determined by the Board in its sole discretion.

(g)

In the case of a Redemption, the Corporation will send a written notice to the holder of the Shares called for Redemption, which will set forth: (i) the Redemption Date, (ii) the number of Shares to be redeemed on the Redemption Date, (iii) the Redemption Price and the manner of payment therefor, (iv) the place where any certificates for such Shares will be surrendered for payment, duly endorsed in blank or accompanied by proper instruments of transfer, (v) a copy of the Valuation Opinion, and (vi) any other requirement of surrender of the certificates (if any) representing the Shares to be redeemed (the “Redemption Notice”). The Redemption Notice may be conditional such that the Corporation need not redeem the Shares owned by an Unsuitable Person on the Redemption Date if the Board determines, in its sole discretion, that such Redemption is no longer advisable or necessary on or before the Redemption Date.

(h)	The Corporation may pay the Redemption Price by using its existing cash resources, incurring debt, issuing a promissory note in the name of the Unsuitable Person, or by using a combination of the foregoing sources of funding.

(i)

On and after the date the Redemption Notice is delivered, any Unsuitable Person owning Shares called for Redemption will cease to have any voting rights with respect to such Shares and on and after the Redemption Date specified therein, such holder will cease to have any rights whatsoever with respect to such Shares other than the right to receive the Redemption Price, without interest, on the Redemption Dale; provided, however, that if any such Shares come to be owned solely by persons other than an Unsuitable Person (such as by transfer of such Shares to a liquidating trust,

subject to the approval of any applicable Gaming Authority), such persons may exercise voting rights of such Shares, and the Board may determine, in its sole discretion, not to redeem such Shares. Following any Redemption in accordance with the terms of this Schedule, the redeemed Shares will be cancelled.

(j)

All notices given by the Corporation to holders of Shares pursuant to this Schedule, including the Redemption Notice, will be in writing and will be deemed given when delivered by personal service, overnight courier or first-class mail, postage prepaid, to the holder’s registered address as shown on the Corporation’s share register.

(k)

The Corporation’s right to redeem Shares pursuant to this Schedule will not be exclusive of any other right the Corporation may have or hereafter acquire under any agreement or any provision of the articles or the bylaws of the Corporation or otherwise with respect to the acquisition by the Corporation of Shares or any restrictions on holders thereof.

(l)

In the event that any provision (or portion of a provision) of this Schedule or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of the Schedule (including the remainder of such provision, as applicable) will continue in full force and effect.

REZ-909 (2012-11)

Déclaration relative au nom

Déclaration relative au nom

Nom de la société par actions : GROUPE DE JEUX AMAYA INC.

Je, soussigné(e), David Baazov, déclare que des moyens raisonnables ont été pris afin de s’assurer que le nom choisi est conforme à la loi, et que je suis la personne autorisée à signer la présente déclaration.

Signature électronique de David Baazov

[Unofficial Translation]

Declaration concerning the name

Corporate name: AMAYA GAMING GROUP INC.

I, the undersigned, declare that I have taken reasonable means to ensure that the name chosen complies with the law, and that I am duly authorized to sign this Declaration.

Electronic signature of David Baazov

EX-99.2

Exhibit 99.2

GENERAL BY-LAWS OF

AMAYA GAMING GROUP INC.

(the “Corporation”)

TABLE OF CONTENTS


1 - DEFINITIONS		1
1.1	Definitions	1
2 - GENERAL BUSINESS		2
2.1	Head Office	2
2.2	Seal	2
2.3	Fiscal Year	2
2.4	Execution of Instruments	2
2.5	Banking Arrangements	2
2.6	Voting Rights in Other Bodies Corporate	2
3 - DIRECTORS		3
3.1	Duties of Directors	3
3.2	Qualifications of Directors	3
3.3	Number of Directors	3
3.4	Quorum	3
3.5	Election and Term	3
3.6	Removal of Directors	4
3.7	Cessation of Office	4
3.8	Resignation	4
3.9	Vacancies	4
3.10	Borrowings	4
3.11	Action by the Board	5
3.12	Delegation	5
3.13	Resolution in writing	5
3.14	Meetings by Telephone, Electronic or other Communication Facility	5
3.15	Place of Meetings	5
3.16	Calling of Meetings	5
3.17	Notice of Meetings	6
3.18	First Meeting of New Board	6
3.19	Adjourned Meeting	6
3.20	Votes to Govern	6
3.21	Chairperson and Secretary	6
3.22	Remuneration and Expenses	6
3.23	Duty of Loyalty and Conflict of Interest	7
3.24	Contracts or Transactions - Disclosure of Interest	7
3.25	Contracts or Transactions – Votes	8
3.26	Dissent	8
4 - COMMITTEES		8
4.1	Committees of the Board	8
4.2	Procedure	9
5 - OFFICERS		9
5.1	Appointment of Officers	9
5.2	Agents and Attorneys	9
5.3	Disclosure of Interest	9
5.4	Mandate	9
5.5	Employment Conditions and Remuneration	9


6 - PROTECTION OF DIRECTORS AND OFFICERS		10
6.1	Indemnity of Directors and Officers	10
6.2	Insurance	10
7 - MEETINGS OF SHAREHOLDERS		10
7.1	General Business	10
7.2	Annual Meetings	11
7.3	Special Meetings	11
7.4	Place of Meetings	11
7.5	Participation in Meetings by Electronic Means	11
7.6	Notice of Meetings	12
7.7	Waiver of Notice	12
7.8	Record Date for Notice	12
7.9	Chair and Secretary	12
7.10	Persons Entitled to be Present	13
7.11	Quorum	13
7.12	Right to Vote	13
7.13	Proxies and Representatives	13
7.14	Time for Deposit of Proxies	13
7.15	Joint Shareholders	14
7.16	Votes to Govern	14
7.17	Casting Vote	14
7.18	Show of Hands	14
7.19	Ballots	14
7.20	Adjournment	14
7.21	Storage of Ballots and Proxies	15
8 - SHARES AND CERTIFICATES		15
8.1	Issuance of Shares	15
8.2	Payment of Shares	15
8.3	Unpaid Shares	15
8.4	Securities Records	15
8.5	Register of Transfer	16
8.6	Registration of Transfer	16
8.7	Registered Ownership	17
8.8	Share Certificates	17
8.9	Certificated Shares	17
8.10	Uncertificated Shares	17
8.11	Replacement of Share Certificates	18
8.12	Joint Shareholders	18
8.13	Deceased Shareholders	18
9 - DIVIDENDS AND RIGHTS		18
9.1	Dividends	18
9.2	Dividend Cheques	19
9.3	Non-receipt or Loss of Cheques	19
9.4	Record Date for Dividends and Rights	19
9.5	Unclaimed Dividends	19
10 - NOTICES		19
10.1	Method of Giving Notices	19
10.2	Notice to Joint Shareholders	20
10.3	Undelivered Notices	20
10.4	Omissions and Errors	20
10.5	Persons Entitled by Death or Operation of Law	20
10.6	Waiver of Notice	20

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1 - DEFINITIONS

1.1

Definitions

In this By-law, and all other By-laws of the Corporation, unless the context indicates otherwise:

“Act” means the Business Corporations Act (Quebec), or any statute which may be substituted therefor, including the regulations made thereunder as amended from time to time;

“Articles” shall mean the articles of the Corporation and includes any amendments thereto;

“Board” means the board of directors of the Corporation;

“By-laws” means the administrative By-laws of the Corporation, as well as all other administrative by-laws of the Corporation in force from time to time, including those referred to in section 726 of the Act, and any amendments which may be made to such By-laws from time to time;

“Director” means a member of the Board;

“Officer” means an officer of the Corporation as defined in the Act;

“Person” includes an individual, a sole proprietorship, a partnership, an association, a labour organization, an organization, a trust, a body corporate and all individuals acting as a trustee, executor, curator or as any other legal representative;

“Reporting Issuer” means a reporting issuer as defined in the Act; and

“Shareholders Meeting” means an annual shareholders meeting or a special meeting of shareholders.

1.2

Interpretation

words importing the singular number also include the plural and vice-versa; words importing the masculine gender include the feminine and vice-versa;

all words used in this By-law and defined in the Act shall have the meanings given to such words in the Act or in the related parts thereof;

this By-law is adopted pursuant to the Act, and is subject to, and must be read in conjunction with the Act. In the event of an inconsistency between a provision of this By-law and a provision of the Act, the latter shall prevail.

1.3

Execution in Counterpart, by Facsimile and by Electronic Signature

Subject to the Act, any notice, resolution, requisition, statement or other document required or permitted to be executed for the purposes of the Act, may be signed by way of electronic

signature, by way of a facsimile signature or by way of signing several similar documents by one or more Persons, and those documents, when duly signed by all Persons required or permitted to sign, as appropriate, shall constitute a single document for the purposes of the Act.

2 - GENERAL BUSINESS

2.1

Head Office

The head office of the Corporation must be permanently located in Québec. The Corporation may relocate its head office in accordance with the Act.

2.2

Seal

The Corporation may have a seal, which shall be adopted and may be changed by the Board. The absence of a seal on a document of the Corporation does not render the document invalid.

2.3

Fiscal Year

The fiscal year end of the Corporation shall be as determined by the Board.

2.4

Execution of Instruments

Deeds, transfers, assignments, contracts, obligations, certificates and other instruments shall be signed on behalf of the Corporation by any Director or Officer of the Corporation. In addition, the Board may from time to time direct the manner in which, and the Person or Persons by whom, any particular instrument or class of instruments may or shall be signed.

Notwithstanding the foregoing, the secretary or any other Officer or any Director may sign certificates and similar instruments (other than share certificates) on the Corporation’s behalf with respect to any factual matters relating to the Corporation’s business and affairs, including certificates verifying copies of the Articles, By-laws, resolutions and minutes of meetings of the Corporation.

2.5

Banking Arrangements

The banking business of the Corporation, or any part or division of the Corporation, shall be transacted with such bank, trust company or other firm or body corporate as the Board may designate, appoint or authorize from time to time and all such banking business, or any part thereof, shall be transacted on the Corporation’s behalf by such one or more Officers or other Persons as the Board may designate, direct or authorize from time to time and to the extent thereby provided.

2.6

Voting Rights in Other Bodies Corporate

Except as otherwise provided by the Board, the president has the full power to represent the Corporation, and more particularly to vote all of the shares or other securities carrying voting rights of any other entity held from time to time by the Corporation, at any and all meetings of shareholders, bondholders, debentureholders or holders of other securities (as the case may be) of such other entity and exercise all other rights attached to the said shares or securities as if he were the owner thereof. The Board may, from time to time, appoint any other Officer for the same purpose.

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3 - DIRECTORS

3.1

Duties of Directors

The Board exercises all the powers necessary to manage, or supervise the management of the business and affairs of the Corporation.

3.2

Qualifications of Directors

Any natural person may be a Director of the Corporation unless such a person is less than 18 years of age, is under guardianship or curatorship, is of unsound mind and has been so found by a court in Canada or elsewhere, is a person for whom the court prohibits the exercise of this function, or has the status of bankrupt. A Director is not required to hold shares of the Corporation.

3.3

Number of Directors

The Board of Directors of the Corporation shall be made up of a minimum and a maximum number of Directors as indicated in the Articles of the Corporation as amended from time to time. The exact number of Directors shall be established from time to time by resolution of the Board.

3.4

Quorum

A majority of the Directors in office constitutes a quorum at any meeting of the Board. In the absence of a quorum within the first fifteen (15) minutes following the start of the meeting, the Directors may only deliberate on the meeting’s adjournment. A quorum of Directors may exercise all the powers of the Board despite any vacancy on the Board.

3.5

Election and Term

Directors shall be elected by the shareholders at the first Shareholders Meeting and at each subsequent annual meeting at which an election of Directors is required, by an ordinary resolution adopted by a majority of the votes cast by shareholders able to vote on such resolution, and shall hold office until the next annual Shareholders Meeting or, if elected for an expressly stated term, for a term expiring no later than three (3) years following the election. The election need not be by ballot unless a ballot is demanded by a shareholder who holds or represents by proxy 10% of the issued shares that carry the right to vote at a Shareholders Meeting or required by the chairperson in accordance with section 7.19. If an election of Directors is not held at an annual Shareholders Meeting at which such election is required, the incumbent Directors shall continue in office until their resignation, replacement or removal.

If shareholders holding a certain class or series of shares have an exclusive right to elect one or more Directors, such number of Directors shall be elected by the majority of votes cast by the holders of such class or series of shares

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3.6

Removal of Directors

Subject to the Act, the shareholders may, by ordinary resolution passed by a majority of votes cast at a special Shareholders Meeting duly called for that purpose, remove any Director or Directors and may at that meeting elect a qualified person for the remainder of such term.

If shareholders holding a certain class or series of shares have an exclusive right to elect one or more Directors, a Director so elected may only be removed by ordinary resolution passed at a meeting of the shareholders holding such class or series of shares.

A Director whose removal is to be proposed at a Shareholders Meeting must be informed of the time and place of the meeting within the same delays as those prescribed for the calling of such meeting. Such Director may attend the meeting and be heard or, if not in attendance, may explain, in a written statement read by the person presiding over the meeting or made available to the shareholders before or at the meeting, why he or she opposes the resolution proposing his or her removal. In addition, any vacancy created by the removal of a Director may be filled by a resolution of the shareholders at the Shareholders Meeting at which the Director is removed or, if it is not, at a subsequent meeting of the Board.

3.7

Cessation of Office

A Director ceases to hold office when he dies, resigns, is removed or becomes disqualified from holding office.

3.8

Resignation

A Director may resign from office by delivering or sending a written notice to the Corporation and such resignation becomes effective at the time the Director’s written resignation is received by the Corporation or at the time specified in the notice, whichever is later. A Director will immediately cease to hold office when such Director no longer meets the requirements to hold office as specified by the Act.

3.9

Vacancies

Subject to the Act or to the Articles, a quorum of Directors may fill a vacancy on the Board.

If there is no quorum of Directors, or if there has been a failure to elect the number or minimum number of Directors required by the Articles, the Directors then in office must without delay call a special Shareholders Meeting to fill the vacancies on the Board. If the Directors refuse or fail to call a meeting or if there are no Directors then in office, the meeting may be called by any shareholder.

A Director appointed or elected to fill a vacancy holds office for the unexpired term of his or her predecessor and remains in office until his successor is elected or nominated.

3.10

Borrowings

The Board may, on behalf of the Corporation:

borrow money;

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issue, reissue, sell or hypothecate its debt obligations;

enter into a suretyship to secure performance of an obligation of any Person; and

hypothecate all or any of its property, owned or subsequently acquired, to secure any obligation.

3.11

Action by the Board

Subject to the Act, the Board shall exercise its powers by or pursuant to a resolution passed at a meeting of the Board at which a quorum is present or approved in writing by all Directors in office.

3.12

Delegation

Subject to the Act, the Articles and any By-laws, the Board may from time to time delegate to a Director, a committee of the Board or an Officer or such other person or persons so designated by the Board all or any of the powers conferred on the Board by the Act to such extent and in such manner as the Board shall determine at the time of each such delegation.

3.13

Resolution in writing

A resolution in writing, signed by all the Directors entitled to vote thereon is as valid as if it had been passed at a meeting of the Board or, as the case may be, of a committee of the Board. A copy of the resolution must be kept with the minutes of the meetings and the resolutions of the Board and its committees.

3.14

Meetings by Telephone, Electronic or other Communication Facility

A Director may, if all of the Directors present or participating at a meeting consent, participate in a meeting of the Board or of a committee of the Board by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A Director who participates in such meeting by such means is deemed to be present at that meeting.

3.15

Place of Meetings

Meetings of the Board are held at the registered office of the Corporation or at any other place within or outside of Québec.

3.16

Calling of Meetings

Meetings of the Board shall be held from time to time at such place, on such day and at such time as the Board, the chairperson of the Board, the president, the secretary or any two Directors may determine. Meetings are called by the chairperson of the Board, the president or two Directors or by the secretary upon being asked to call such a meeting by the chairperson of the Board, the president or two Directors.

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3.17

Notice of Meetings

The notice stating the time and place of the meeting and specifying any matter to be dealt with relating to powers which the Board may not delegate, shall be given to each Director at least 48 hours before the meeting is to occur. This notice does not have to be given in writing.

Any Director may waive a notice of a meeting of the Board. Attendance of a Director at a meeting of the Board constitutes a waiver of notice of such meeting unless the Director attends such meeting for the sole purpose of objecting to the holding of the meeting on the grounds that it was not duly called.

3.18

First Meeting of New Board

Provided a quorum of Directors is present, each newly elected Board may without notice hold its first meeting following the Shareholders Meeting at which such Board is elected.

3.19

Adjourned Meeting

Notice of an adjourned meeting of the Board is not required if the time and place of the adjourned meeting is announced at the original meeting.

3.20

Votes to Govern

Subject to the Act, at all meetings of the Board, any question shall be decided by a majority of the votes cast on the question and, in the case of an equality of votes, the chairperson of the meeting shall not be entitled to a second or casting vote. Any question at a meeting of the Board shall be decided by a show of hands unless a ballot is required or demanded.

3.21

Chairperson and Secretary

The chairperson of the Board or, in the chairperson’s absence, the president or, in the president’s absence, a vice-president shall be chairperson of any meeting of the Board. If none of these Officers are present, the Directors present shall choose one of their number to be chairperson. The secretary of the Corporation shall act as secretary at any meeting of the Board and, if the secretary of the Corporation is absent, the chairperson of the meeting shall appoint a Person, who need not be a Director, to act as secretary of the meeting.

3.22

Remuneration and Expenses

The Directors shall be paid such remuneration for their services as Directors as the Board may from time to time authorize. In addition, the Board may authorize, by resolution, a special remuneration to a Director who executes specific or additional duties on behalf of the Corporation. The Directors shall also be entitled to be paid in respect of travelling and other expenses properly incurred by them in attending meetings of the Board or any committee thereof or in otherwise serving the Corporation. Nothing herein contained shall preclude any Director from serving the Corporation in any other capacity and receiving remuneration therefor.

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3.23

Duty of Loyalty and Conflict of Interest

Subject to the Act, the Directors are bound by the same obligations as are imposed by the Civil Code of Québec (Quebec) on any Director of a legal person. Consequently, in the exercise of their functions, the Directors are duty-bound toward the Corporation to act with prudence and diligence, honesty and loyalty and in the interest of the Corporation.

In particular, but without limiting the generality of the foregoing, a Director may not mingle the property of the Corporation with his own property nor may he use for his own profit or that of a third Person any property of the Corporation or any information he obtains by reason of his duties, unless he is authorized to do so by the shareholders of the Corporation. Directors shall avoid placing themselves in any situation where their Personal interests would be in conflict with their obligations as a Director.

3.24

Contracts or Transactions - Disclosure of Interest

A Director must disclose the nature and value of any interest he or she has in a contract or transaction to which the Corporation is a party. “Interest” means any financial stake in a contract or transaction that may reasonably be considered likely to influence decision-making. Furthermore, a proposed contract or a proposed transaction, including related negotiations, is considered a contract or transaction.

A Director must also disclose any contract or transaction to which the Corporation and any of the following are a party:

an associate of the Director or Officer;

a group of which the Director or Officer is a Director or Officer; or

a group in which the Director or Officer or an associate of the Director or Officer has an interest.

The Director satisfies the requirement if he or she discloses, in a case specified in subparagraph b) above, the Directorship or office held within the group or, in a case specified in subparagraph c) above, the nature and value of the interest he or she or his or her associate has in the group.

Unless it is recorded in the minutes of the first meeting of the Board at which the contract or transaction is discussed, the disclosure of an interest, contract or transaction must be made in writing to the Board as soon as the Director becomes aware of the interest, contract or transaction.

The disclosure must be made even in the case of a contract or transaction that does not require approval by the Board.

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3.25

Contracts or Transactions – Votes

No Director may vote on a resolution to approve, amend or terminate a contract or transaction described in section 3.24 or be present during deliberations concerning the approval, amendment or termination of such a contract or transaction, unless the contract or transaction:

relates primarily to the remuneration of the Director or an associate of the Director as a Director of the Corporation or an affiliate of the Corporation;

relates primarily to the remuneration of the Director or an associate of the Director as an Officer, employee or mandatary of the Corporation or an affiliate of the Corporation, if the Corporation is not a Reporting Issuer;

is for indemnity or liability insurance; or

is with an affiliate of the Corporation, and the sole interest of the Director is as a Director or Officer of the affiliate.

If no quorum exists for the purpose of voting on a resolution to approve a contract or transaction only because a Director is not permitted to be present during deliberations, the other Directors present are deemed to constitute a quorum for the purpose of voting on the resolution.

If all the Directors are required to abstain from voting, the contract or transaction may be approved solely by the shareholders entitled to vote, by ordinary resolution. The disclosure required by section 3.24 must be made to the shareholders in a sufficiently clear manner before the contract or transaction is approved.

3.26

Dissent

A Director who is present at a meeting of the Board or a committee of the Board is deemed to have consented to any resolution passed at the meeting unless:

the Director’s dissent has been entered in the minutes;

the Director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

the Director delivers a written dissent to the chair of the Board, sends it to the chair by any means providing proof of the date of receipt or delivers it to the head office of the Corporation immediately after the meeting is adjourned.

A Director is not entitled to dissent after voting for or consenting to a resolution.

A Director who was not present at a meeting at which a resolution was passed is deemed to have consented to the resolution unless he delivers a written dissent to the chair of the Board, sends it to the chair of the Board by any means providing proof of the date of receipt or delivers it to the head office of the Corporation within seven days after becoming aware of the resolution.

4 - COMMITTEES

4.1

Committees of the Board

The Board may, by resolution, create one or more committees comprised of Directors and, subject to the limitations prescribed by the Act, may delegate to any such committee any of the powers of the Board.

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4.2

Procedure

Subject to the Act and unless otherwise determined by a resolution of the Board, each committee shall have the power to fix its quorum at not less than a majority of its members, to elect its chairperson and to regulate its procedure. Each committee must provide the Board with a report concerning its activities if the Board makes such a request. The Board may cancel or modify any decision made by the committee.

5 - OFFICERS

5.1

Appointment of Officers

The Board may from time to time appoint a president, chief executive officer, chief operating officer, chief financial officer or secretary of the Corporation, or a person holding a similar position, or any other person designated as an Officer by a resolution of the Board. The Board may specify the duties of and, in accordance with this By-law and subject to the Act, delegate to such Officers powers to manage, or supervise the management of, the business and affairs of the Corporation other than any of the powers that may not be delegated as prescribed by the Act. An Officer may but need not be a Director and any person may hold more than one office.

5.2

Agents and Attorneys

The Board shall have the power from time to time to appoint agents or attorneys for the Corporation in or out of the Province of Quebec with such powers of management or otherwise (including the power to sub-delegate) as the Board may determine.

5.3

Disclosure of Interest

An Officer must disclose the nature and value of any interest he or she has in a contract or transaction to which the Corporation is a party, in the same way that a Director must disclose such an interest pursuant to section 3.24. In the case of an Officer who is not a Director, disclosure must be made as soon as:

the Officer becomes an Officer;

the Officer becomes aware that the contract or transaction is to be discussed or has been discussed at a meeting of the Board; or

the Officer or the Officer’s associate acquires an interest in the contract or transaction, if it was entered into earlier.

5.4

Mandate

The Board may, at its own discretion, remove any Officer of the Corporation. Each Officer appointed by the Board will remain in office until his resignation, replacement or removal.

5.5

Employment Conditions and Remuneration

The Board shall fix, from time to time, by resolution, the terms of employment and the remuneration of the Officers it appoints.

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6 - PROTECTION OF DIRECTORS AND OFFICERS

6.1

Indemnity of Directors and Officers

Subject to the following, the Corporation must indemnify a Director or Officer of the Corporation, a former Director or Officer of the Corporation, a mandatary, or any other person who acts or acted at the Corporation’s request as a Director or Officer of another group, against all costs, charges and expenses reasonably incurred in the exercise of their functions, including an amount paid to settle an action or satisfy a judgment, or arising from any investigative or other proceeding in which the person is involved if:

the person acted with honesty and loyalty in the interest of the Corporation or, as the case may be, in the interest of the other group for which the person acted as Director or Officer or in a similar capacity at the Corporation’s request; and

in the case of a proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that his or her conduct was lawful.

The Corporation must also advance moneys to such a person for the costs, charges and expenses of a proceeding referred to in the above paragraph.

However, in the event that a court or any other competent authority judges that the conditions set out in subparagraphs 1 and 2 above are not fulfilled, the Corporation may not indemnify the person and the person must repay to the Corporation any moneys advanced. In addition, the Corporation is not required to indemnify the person if a court has judged that the person committed an intentional or gross fault. The person will then be required to repay to the Corporation any moneys advanced.

The Corporation may, with the approval of the court, in respect of an action by or on behalf of the Corporation or other group referred to above, against a person referred to above, advance the necessary monies to the person or indemnify the person against all costs, charges and expenses reasonably incurred by the person in connection with the action, if the person fulfills the conditions set out above.

6.2

Insurance

The Corporation may purchase and maintain insurance for the benefit of its Directors, Officers and other mandataries against any liability they may incur as such or in their capacity as Directors, Officers or mandataries of another group, if they act or acted in that capacity at the Corporation’s request.

7 - MEETINGS OF SHAREHOLDERS

7.1

General Business

The Corporation must hold an annual shareholders meeting; if necessary, the Corporation may also hold one or more special shareholder meetings.

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7.2

Annual Meetings

An annual Shareholders Meeting entitled to vote at such a meeting must be held not later than 18 months after the Corporation is constituted and, subsequently, not later than 15 months after the last preceding annual shareholders meeting, for the purpose of:

considering the financial statements of the Corporation for the fiscal year ending within six (6) months preceding the date of such meeting and the auditor’s report thereon, if any;

considering any other financial information presentation of which is required by the Articles or the By-laws;

electing Directors;

appointing the auditor; and

deliberating with respect to all other matters which may be presented at the meeting.

The Board calls the annual shareholders meeting. Otherwise, the meeting may be called by the shareholders in accordance with the Act or with section 7.3 below.

7.3

Special Meetings

The Board may at any time call a special shareholders meeting.

The holders of not less than 10% of the issued shares that carry the right to vote at a Shareholders Meeting sought to be held may requisition the Board to call a Shareholders Meeting for the purposes stated in the requisition. The requisition, signed by at least one shareholder, must state the business to be transacted at the meeting and must be sent to each Director and to the head office of the Corporation. On receiving the requisition, the Board calls a Shareholders Meeting to transact the business stated in the requisition. If the Board does not within 21 days after receiving the requisition call a meeting, any shareholder who signed the requisition may call the meeting. Unless the shareholders otherwise resolve at a meeting called by shareholders, the Corporation must reimburse the shareholders for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

7.4

Place of Meetings

Subject to the Articles, Shareholders Meetings must be held in Quebec at the place determined by the Board. If the Articles so allow, or in the absence of such a provision, if all the shareholders entitled to vote at the meeting agree, the meeting may be held at a place outside of Québec.

7.5

Participation in Meetings by Electronic Means

A meeting may be held solely by means of equipment enabling all participants to communicate directly with one another.

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In addition, any Person entitled to attend a Shareholders Meeting may participate in the meeting by means of any equipment enabling all participants to communicate directly with one another. A Person participating in a meeting by such means is deemed present at the meeting.

Any shareholder participating in a Shareholders Meeting by means of equipment enabling all participants to communicate directly with one another may vote by any means enabling votes to be cast in a way that allows them to be verified afterwards and protects the secrecy of the vote when a secret ballot has been requested.

7.6

Notice of Meetings

Any notice of a Shareholders Meeting specifying the time and place of the meeting must be sent, in writing and by any means providing proof of the date of receipt, to each Person entitled to vote at the meeting not less than 21 days and not more than 60 days before the meeting.

Notice of a Shareholders Meeting at which special business is to be transacted shall state the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon, and contain the text of any special resolution to be submitted to the meeting. All business transacted at a special meeting of the shareholders and all business transacted at an annual shareholders meeting, except consideration of the financial statements and auditor’s report, the appointment of the auditor and the election of Directors, is deemed to be special business.

If a Director or a shareholder entitled to vote at a Shareholders Meeting gives written notice not less than 10 days before the meeting to the auditor or a former auditor of the Corporation, the auditor or former auditor attends the meeting at the Corporation’s expense and answers any question relating to their duties as auditor.

7.7

Waiver of Notice

A shareholder or Director may waive notice of a Shareholder Meeting; the waiver may be given either before or after the meeting. Their attendance at the meeting is a waiver of notice of the meeting unless they attend the meeting for the sole purpose of objecting to the holding of the meeting on the grounds that it was not lawfully called or held.

7.8

Record Date for Notice

The Board may fix, in conformity with applicable securities law requirements, in advance, not less than 21 days and not more than 60 days before the meeting, a record date for the purpose of determining the shareholders entitled to receive a notice of the meeting or entitled to vote at the meeting.

7.9

Chair and Secretary

The chairperson of the Board or, in the chairperson’s absence, the president or, in the president’s absence, a vice-president shall be chairperson of any meeting of shareholders. If none of these Officers are present within 15 minutes after the time appointed for holding the meeting, the Persons present and entitled to vote shall choose a chairperson from amongst themselves. The secretary of the Corporation shall act as secretary at any Shareholders Meeting or, if the secretary

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of the Corporation is absent, the chairperson of the meeting shall appoint some person, who need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by resolution or by the chairperson with the consent of the meeting in accordance with the procedure set out in section 7.17.

7.10

Persons Entitled to be Present

The only persons entitled to be present at a Shareholders Meeting shall be those entitled to vote thereat, the Directors and auditors of the Corporation and others who, although not entitled to vote, are entitled or required under any provision of the Act or the Articles or By-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairperson of the meeting or with the consent of the meeting in accordance with the procedure set out in section 7.17.

7.11

Quorum

A quorum of shareholders is present at a meeting of shareholders, provided that a quorum shall not be less than two persons, if the holders of at least twenty-five (25%) of the shares of the Corporation entitled to vote at the meeting are present in person or represented by proxy. A quorum need not be present throughout the meeting provided a quorum is present at the opening of the meeting.

7.12

Right to Vote

Subject to a record date established in accordance with section 7.9, at a Shareholders Meeting, the shareholders registered on the securities register of the Corporation are entitled to exercise the voting rights attached to the shares in their name.

7.13

Proxies and Representatives

Every shareholder entitled to vote at a Shareholders Meeting may, by means of a proxy, appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, to attend and act at the meeting in the manner and to the extent authorized and with the authority conferred by the proxy. A proxy shall be signed in writing or by electronic signature by the shareholder or the shareholder’s representative authorized in writing or by electronic signature.

Unless otherwise indicated, a proxy lapses one year after the date it is given. It may be revoked at any time.

A proxyholder has the same rights as the shareholder represented to speak at a Shareholders Meeting in respect of any matter and to vote at the meeting. However, a proxyholder who has conflicting instructions from more than one shareholder may not vote by a show of hands.

7.14

Time for Deposit of Proxies

The Board may specify in a notice calling a Shareholders Meeting a time, preceding the time of such meeting by not more than 48 hours exclusive of non-business days, before which proxies to be used at such meeting must be deposited. A proxy shall be acted upon only if, prior to the time so specified, it shall have been deposited with the Corporation or an agent thereof specified in such notice or, if no such time is specified in such notice, it shall have been received prior to the time of voting by the secretary of the Corporation or by the chairperson of the meeting or any adjournment thereof.

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7.15

Joint Shareholders

If two or more Persons hold shares jointly, one of those holders present at a Shareholders Meeting may in the absence of the others vote the share, but if two or more of those Persons who are present, in person or by proxy, vote, they shall vote as one on the shares jointly held by them.

7.16

Votes to Govern

Except as otherwise required by the Act and the Articles, all questions proposed for the consideration of shareholders at a Shareholders Meeting shall be determined by a majority of the votes cast by all who are entitled to vote.

7.17

Casting Vote

In case of an equality of votes at any meeting of shareholders, regardless of the manner of voting, the chairperson of the meeting shall not be entitled to a second or casting vote.

7.18

Show of Hands

Any question at a Shareholders Meeting shall be decided by a show of hands, unless a ballot thereon is demanded by a shareholder who holds or represent by proxy not less than 10% of the of the issued shares that carry the right to vote at a Shareholders Meeting as hereinafter provided. Every Person who is present and entitled to vote thereon shall have one vote. Whenever a vote by any means other than by ballot is taken, a declaration by the chairperson of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the shareholders upon the said question.

7.19

Ballots

On any question proposed for consideration at a meeting of shareholders, and whether or not a show of hands has been taken thereon, the chairperson may require, or any shareholder who holds or represent by proxy not less than 10% of the issued shares that carry the right to vote at a Shareholders Meeting may demand, a ballot. A ballot so required or demanded shall be taken in such manner as the chairperson shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken each Person present shall be entitled, in respect of the shares which the Person is entitled to vote at the meeting upon the question, to that number of votes provided by the Act or the Articles, and the result of the ballot so taken shall be the decision of the shareholders upon the said question.

7.20

Adjournment

If a Shareholders Meeting is adjourned for less than 30 days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. If a Shareholders Meeting is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting.

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7.21

Storage of Ballots and Proxies

The Corporation must, for at least three months after a Shareholders Meeting, keep at its head office the ballots cast and the proxies presented at the meeting. Any shareholder or proxyholder who was entitled to vote at the meeting may, without charge, inspect the ballots and proxies kept by the Corporation.

8 - SHARES AND CERTIFICATES

8.1

Issuance of Shares

Subject to any pre-emptive right granted to shareholders, shares may be issued at the times, to the Persons, including Directors and Officers, and for the consideration that the Board determines. The Board may, by resolution, accept subscriptions, issue and allot unissued shares from the Corporation’s share capital and grant exchange rights, options or acquisition rights with respect to those shares.

8.2

Payment of Shares

Shares may be issued whether or not they are fully paid. However, shares may only be considered paid if consideration equal to the issue price determined by the Board has been paid to the Corporation.

Consideration for the shares issued by the Corporation is payable in money, or in property or past services determined by the Board to be the fair equivalent of the money consideration, considering all the circumstances.

A promissory note or a promise to pay made by a Person to whom shares are issued, or a Person who does not deal at arm’s length, within the meaning of that expression in the Taxation Act (Quebec), with a Person to whom shares are issued does not constitute consideration for the shares.

8.3

Unpaid Shares

Unless the terms of payment for shares are determined by contract, the Board may call for payment of all or part of the unpaid amounts on shares subscribed or held by the shareholders, the whole as provided by the Act.

8.4

Securities Register

The securities register of the Corporation must contain the following information with respect to its shares:

the names, in alphabetical order, and the addresses of present and past shareholders;

the number of shares held by each such shareholder;

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the date and details of the issue and transfer of each share; and

any amount due on any share.

The register must contain, if applicable, the same information with respect to the Corporation’s debentures, bonds, notes and other securities, with the necessary modifications.

8.5

Register of Transfer

The Corporation shall cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and the date and other particulars of each transfer shall be set out.

Subject to the Act, the transfer of shares is governed by the Act respecting the transfer of securities and the establishment of security entitlements (Quebec).

8.6

Registration of Transfer

If an endorsed share certificate in registered form is presented to the Corporation with a request to register a transfer of the certificated share or an instruction is presented to the Corporation with a request to register a transfer of an uncertificated share, the Corporation registers the transfer as requested if:

under the terms of the share, the purchaser is eligible to have the share registered in that Person’s name;

the endorsement or instruction is made by the appropriate Person or by that Person’s representative;

reasonable assurance is given that the endorsement or instruction is neither forged nor counterfeited and is authorized;

any applicable fiscal law that imposes duties on the Corporation at the time of the transfer has been complied with;

the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable against the purchaser or imposed by law; and

the transfer is rightful or is to a protected purchaser, pursuant to the Act respecting the transfer of securities and the establishment of security entitlements (Quebec).

Shares that are not fully paid but for which no instalment is payable may only be transferred with the authorization of the Board. The Directors must reasonably verify the acquirer’s ability to pay for the shares before authorizing the transfer.

A share may not be transferred until all instalments payable up to the time of transfer have been fully paid.

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8.7

Registered Ownership

Subject to the Act, the Corporation may treat the registered owner of a share as the Person exclusively entitled to vote, to receive notices, to receive any dividend or other payments in respect thereof and otherwise to exercise all the rights and powers of an owner of a share.

8.8

Share Certificates

A share issued by the Corporation may be a certificated share or an uncertificated share. A certificated share is represented by a paper certificate in registered form, and an uncertificated share is represented by an entry in the securities register in the name of the shareholder.

Unless otherwise provided in the Articles, shares are issued as certificated shares unless the Board determines, by resolution, that the shares of any class or series or certain shares of a class or series are to be issued as uncertificated shares.

The Board may also, by resolution, determine that a certificated share becomes an uncertificated share as soon as the paper certificate is surrendered to the Corporation.

Inversely, the Board may, by resolution, determine that an uncertificated share becomes a certificated share on delivery to the shareholder of a certificate in the shareholder’s name or, in the case of a control agreement under the Act respecting the transfer of securities and the establishment of security entitlements (Quebec), on delivery to the purchaser, within the meaning of the Act respecting the transfer of securities and the establishment of security entitlements (Quebec), of a certificate in the purchaser’s name, unless there are provisions inconsistent with such a control agreement, in which case those provisions apply. The Board must give notice of the resolution to the shareholders of the classes or series of shares concerned.

8.9

Certificated Shares

In the case of certificated shares, the Corporation must issue to the shareholder, without charge, a certificate in registered form.

Share certificates shall be in such form as the Board may from time to time approve in accordance with the requirements of the Act.

Subject to any resolution of the Board providing otherwise, the share certificates of the Corporation must be signed by any of the Directors or Officers or by a person acting in their name. The signature may be affixed by an automatic device or electronic process.

In the absence of any evidence to the contrary, the certificate is proof of the shareholder’s title to the shares represented by the certificate.

Share certificates need not be under corporate seal.

8.10

Uncertificated Shares

In the case of uncertificated shares, the Corporation must send the shareholder a written notice containing the information required under the Act.

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8.11

Replacement of Share Certificates

If the shareholder of a certificated share claims that the certificate has been lost, wrongfully taken or destroyed, the Corporation must issue a new certificate if the shareholder:

so requests before the Corporation has notice that the lost, wrongfully taken or allegedly destroyed certificate has been delivered to a protected purchaser, as such term is defined in the Act respecting the transfer of securities and the establishment of security entitlements (Quebec);

provides security sufficient in the Corporation’s judgment to protect the Corporation from any loss that the Corporation may suffer by issuing a new certificate; and

satisfies any other reasonable requirements imposed by the Corporation.

8.12

Joint Shareholders

If two or more Persons are registered as joint holders of any share, the Corporation shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate to one of such Persons shall be sufficient delivery to all of them. Any one of such Persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable in respect of such share.

8.13

Deceased Shareholders

In the event of the death of a holder, or of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required by the Act and upon compliance with the reasonable requirements of the Corporation or it transfer agent.

9 - DIVIDENDS AND RIGHTS

9.1

Dividends

Subject to the provisions of the Act and the Articles, the Board may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid, in whole or in part, in money or property or by issuing fully paid shares or options or rights to acquire fully paid shares of the Corporation.

If shares of the Corporation are issued in payment of a dividend, the Corporation may add all or part of the value of those shares to the appropriate issued and paid-up share capital account.

The Corporation may not declare and pay a dividend, except by issuing shares or options or rights to acquire shares, if there are reasonable grounds for believing that the Corporation is, or would after the payment be, unable to pay its liabilities as they become due.

The Corporation may deduct from the dividends payable to a shareholder any amount due to the Corporation by the shareholder, on account of calls for payment or otherwise.

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9.2

Dividend Cheques

A dividend payable in cash may be paid by cheque drawn on the Corporation’s banks or by electronic means to the order of each registered holder of shares of the class or series in respect of which it has been declared. Cheques may be sent by prepaid ordinary mail to such registered holder at such holder’s address recorded in the Corporation’s securities register, unless in each case such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order of all of such joint holders and, if more than one address is recorded in the Corporation’s securities register in respect of such joint holding, the cheque shall be mailed to the first address so appearing. The mailing of such cheque, in such manner, unless the cheque is not paid on due presentation, shall satisfy and discharge the liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold.

9.3

Non-receipt or Loss of Cheques

In the event of non-receipt or loss of any dividend cheque by the Person to whom it is sent, the Corporation shall issue to such Person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt or loss and of title as the Board may from time to time prescribe, whether generally or in any particular case.

9.4

Record Date for Dividends and Rights

The Board may fix, in advance, in accordance with applicable securities law requirements, a record date for the determination of the shareholders entitled to receive dividends.

9.5

Unclaimed Dividends

Any dividend unclaimed after a period of two years from the date on which the dividend has been declared to be payable shall be forfeited and shall revert to the Corporation.

10 - NOTICES

10.1

Method of Giving Notices

Any notice, communication or document (“notice”) to be given or sent pursuant to the Act, the Articles, the By-laws or otherwise to a shareholder, Director, Officer or auditor shall be sufficiently given or sent if given or sent by prepaid mail, prepaid transmitted, recorded, or electronic communication capable of providing a written copy of such notice, or delivered Personally to such Person’s latest address as shown on the securities register of the Corporation or, in the case of a Director, if more current, the address as shown in the most recent declaration filed under the Act Respecting the Legal Publicity of Enterprises (Quebec). A notice shall be deemed to have been received on the date when it is delivered Personally, or on the fifth day after mailing, or on the date of dispatch of a transmitted or recorded electronic communication. The secretary may change or cause to be changed the recorded address of any shareholder, Director, Officer or auditor in accordance with any information believed by the secretary to be reliable.

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10.2

Notice to Joint Shareholders

If two or more Persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such Persons shall be sufficient notice to all of them.

10.3

Undelivered Notices

If any notice given to a shareholder pursuant to section 10.1 is returned on two consecutive occasions because the shareholder cannot be found, the Corporation shall not be required to give any further notice to such shareholder until such shareholder informs the Corporation in writing of the shareholder’s new address.

10.4

Omissions and Errors

The accidental omission to give or send any notice to any shareholder, Director, Officer or auditor, or the non-receipt of any notice by any such Person or any error in any notice not affecting the substance thereof, shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise based thereon.

10.5

Persons Entitled by Death or Operation of Law

Every Person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which shall have been duly given or sent to the shareholder from whom the Person derives title to such share prior to that Person’s name and address being entered on the securities register (whether such notice was given or sent before or after the happening of the event upon which that Person becomes so entitled) and prior to that Person furnishing to the Corporation the proof of authority or evidence of entitlement prescribed by the Act.

10.6

Waiver of Notice

Any shareholder (or shareholder’s duly appointed proxyholder), Director, Officer or auditor may at any time waive the giving or sending of any notice, or waive or abridge the time for any notice, required to be given to that Person under any provision of the Act, the Articles, the By-laws or otherwise and such waiver or abridgement shall cure any default in the giving or sending or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing or given by electronic signature except a waiver of notice of a Shareholders Meeting or of the Board which may be given in any manner.

The foregoing By-law was adopted by the Board of Directors of the Corporation pursuant to the provisions of the Business Corporations Act (Quebec), on June 30, 2014 and ratified by the shareholders on July 30, 2014.

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EX-99.3

Exhibit 99.3

ADVANCE NOTICE BY-LAW

BY-LAW NO. 2014-1

A BY-LAW RELATING GENERALLY TO THE ADVANCE NOTICE

REQUIREMENTS FOR THE NOMINATION OF DIRECTORS OF

AMAYA GAMING GROUP INC.

(the “Corporation”)

INTRODUCTION

The purpose of this advance notice by-law (the “Advance Notice By-Law”) is to establish the conditions and framework under which holders of record of common shares of the Corporation may exercise their right to submit director nominations by fixing a deadline by which such nominations must be submitted by a shareholder to the Corporation prior to any annual or special meeting of shareholders, and sets forth the information that a shareholder must include in the notice to the Corporation for the notice to be in proper form.

It is the position of the Corporation that this Advance Notice By-Law is beneficial to shareholders and other stakeholders of the Corporation.

NOMINATIONS OF DIRECTORS

Subject only to the Business Corporations Act (Quebec) (the “Act”) and the articles, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the board of directors of the Corporation (the “Board”) may be made at any annual meeting of shareholders or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors. Such nominations may be made in the following manner:

a. by or at the direction of the Board, including pursuant to a notice of meeting;

b. by or at the direction or request of one or more shareholders of the Corporation pursuant to a proposal made in accordance with the provisions of the Act, or a requisition of meeting of the shareholders of the Corporation made in accordance with the provisions of the Act; or

c. by any person (a “Nominating Shareholder”): (A) who, at the close of business on the date of the giving of the notice provided below in this Advance Notice By-Law and on the record date for notice of such meeting, is entered in the securities register of the Corporation as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Advance Notice By-Law.

In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof in proper written form to the Corporate Secretary of the Corporation at the principal executive offices of the Corporation.

To be timely, a Nominating Shareholder’s notice to the Corporate Secretary of the Corporation must be made:

a. in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date on which the first public announcement (the “Notice Date”) of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the 10th day following the Notice Date; and

b. in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting of shareholders was made.

c. In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder’s notice as described above.

To be in proper written form, a Nominating Shareholder’s notice to the Corporate Secretary of the Corporation must set forth:

a. as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares in

the capital of the Corporation which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (D) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below); and

b. as to the Nominating Shareholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote any shares of the Corporation and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below).

The Corporation may require any proposed director nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed director nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholder of the Corporation’s understanding of the independence, or lack thereof, of such proposed director nominee.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this Advance Notice By-Law; provided, however, that nothing in this Advance Notice By-Law shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of the Corporation of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Act. The chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

For purposes of this Advance Notice By-Law:

a. “public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Corporation under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and

b. “Applicable Securities Laws” means the applicable securities legislation of each relevant province of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province of Canada.

Notwithstanding any other provision of this Advance Notice By-Law, notice given to the Corporate Secretary of the Corporation may only be given by personal delivery, facsimile transmission or by email (at such email address as stipulated from time to time by the Corporate Secretary of the Corporation for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the aforesaid address) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Corporate Secretary of the Corporation at the address of the principal executive offices of the Corporation; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5 :00 p.m. (Montreal time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

Notwithstanding the foregoing, the Board may, in its sole discretion, waive any requirement in this Advance Notice By-Law.

The foregoing Advance Notice By-Law was adopted by the Board of Directors of the Corporation pursuant to the provisions of the Business Corporations Act (Quebec), on June 30, 2014 and ratified by the shareholders on July 30, 2014.

********

EX-99.4

Exhibit 99.4

LOGO

C0000000230 | M
AMAYA
CONSTITUTED UNDER THE BUSINESS CORPORATIONS ACT (QUEBEC)
CONSTITUEE VERTU DE LA LOI SUR LES SOCIETES PAR ACTIONS (QUEBEC)
104598
Number Numéro
00000000
Shares Actions
* * * * 0 * * * * * * * * *
* * * * * 0 * * * * * * * *
* * * * * * 0 * * * * * * *
* * * * * * * 0 * * * * * *
* * * * * * * * 0 * * * * *
SPECIMEN
***0***
THIS CERTIFIES THAT **SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****
SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SP
LES PRÉSENTES ATTESTENT QUE ECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPEC
IMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIM
EN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.SPECIMENzero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN
02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02
314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN0231
4M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M
10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10800000000Amaya*Inc.zero****SPECIMEN02314M10
IS THE REGISTERED HOLDER OF **002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Ama
ya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M1
EST LE PORTEUR INSCRIT DE 0800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zer
o****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000
Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.* * * 0 * * * zero****002314M10800000000Amaya*Inc.zero****00231
4M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.
zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000
000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****00
2314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*I
nc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800000000Amaya*Inc.zero****002314M10800
CUSIP 02314M108
ISIN CA02314M1086
SEE REVERSE FOR CERTAIN DEFINITIONS
VOIR AU VERSO POUR CERTAINES DÉFINITIONS
FULLY PAID AND NON-ASSESSABLE COMMON SHARES WITHOUT PAR VALUE IN THE CAPITAL OF ACTIONS ORDINAIRES SANS VALEUR NOMINALE ENTIÈREMENT LIBÉRÉES DU CAPITAL-ACTIONS DE
Amaya Inc. Amaya Inc.
transferable on the books of the Company only upon surrender of this certificate properly endorsed. transférables dans les registres de la Société seulement sur remise de ce certificat endossé en bonne et due forme.
This certificate is not valid unless countersigned by the Transfer Agent and Registrar of the Company. Ce certificat n’est valide que s’il a été contresigné par l’agent de transfert et agent comptable des registres de la Société.
IN WITNESS WHEREOF the Company has caused this certificate to be signed on its behalf by the facsimile signatures of its duly authorized officers. EN FOI DE QUOI la Société a fait signer le présent certificat en son nom au moyen des fac- similés de signature de ses dirigeants dûment autorisés.
Dated: Mar 03, 2015
Le : 03 mars 2015
COUNTERSIGNED AND REGISTERED COUNTERSIGNED AND REGISTERED
President and Chief Executive Officer CONTRESIGNÉ ET IMMATRICULÉ CONTRESIGNÉ ET IMMATRICULÉ
President et Chef de la direction COMPUTERSHARE TRUST COMPANY, N.A. COMPUTERSHARE INVESTOR SERVICES INC.
(CANTON, MA, JERSEY CITY, NJ AND COLLEGE OR SERVICES AUX INVESTISSEURS COMPUTERSHARE INC.
STATION, TX) (MONTREAL) (TORONTO)
TRANSFER AGENT AND REGISTRAR TRANSFER AGENT AND REGISTRAR
AGENT DE TRANSFERT ET AGENT AGENT DE TRANSFERT ET AGENT COMPTABLE DES REGISTRES
COMPTABLE DES REGISTRES
Chief Financial Officer By / Par By / Par
Chef des finances Authorized Officer—Représentant Autorisé Authorized Officer - Représentant autorisé
The shares represented by this certificate are transferable at the offices of Computershare Investor Services Inc. in Montreal, QC and Toronto, ON or Computershare Trust Company, N.A. in Canton, MA, Jersey City, NJ and College Station, TX.
Les actions représentées par ce certificat peuvent être transférées aux bureaux de Services aux Investisseurs Computershare inc. à Montréal, QC et Toronto, ON ou à Computershare Trust Company, N.A. à Canton, MA, Jersey City, NJ and College Station, TX.
SECURITY INSTRUCTIONS ON REVERSE VOIR LES INSTRUCTIONS DE SECURITE AU VERSO
CSAE_WIP_AGJQ_C01.mtl.pulls/000001/000001/i


The following abbreviations shall be construed as though the words set forth below opposite each abbreviation were written out in full where such abbreviation appears:

TEN COM	-	as tenants in common

TEN ENT	-	as tenants by the entireties

JT TEN	-	as joint tenants with rights of survivorship and not as tenants in common

(Name) CUST (Name) UNIF GIFT MIN ACT (State)	-	(Name) as Custodian for (Name) under the (State) Uniform Gifts to Minors Act

Additional abbreviations may also be used though not in the above list.

For value received the undersigned hereby sells, assigns and transfers unto


Les abréviations suivantes doivent être interprétées comme si les expressions correspondantes étaient écrites en toutes lettres:

TEN COM	-	à titre de propriétaires en commun

TEN ENT	-	à titre de tenants unitaires

JT TEN	-	à titre de copropriétaires avec gain de survie et non à titre de propriétaires en commun

(Nom) CUST (Nom) UNIF (GIFT MIN ACT (État)	-	(Nom) à titre de dépositaire pour (Nom) en vertu de la Uniform Gifts to Minors Act de (État)

Des abréviations autres que celles qui sont données ci-dessus peuvent aussi être utilisées.

Pour valeur reçue, le soussigné vend, cède et transfère par les preséntes à


Insert name and address of transferee		Insérer le nom et I’adresse du cessionnaire




shares represented by this certificate and does hereby irrevocably constitute and appoint		actions représentées par le présent certificat et nom me irrévocablement


the attorney of the undersigned to transfer the said shares on the books of the Company with full power of substitution in the premises.		le fondé de pouvoir du soussigné chargé d’inscrire le transfert desdites actions aux registres de la Socíeté, avec plein pouvoir de substitution à cet égard.

LE:

DATED:

Signature of Shareholder / Signature de I’actionnaire

Signature of Guarantor / Signature du garant

Signature Guarantee: The signature on this assignment must correspond with the name as written upon the face of the certificate(s), in every particular, without alteration or enlargement, or any change whatsoever and must be guaranteed by a major Canadian Schedule 1 chartered bank or a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, MSP). The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”.

In the USA, signature guarantees must be done by members of a “Medallion Signature Guarantee Program” only.

Signature guarantees are not accepted from Treasury Branches, Credit Unions or Caisses populaires unless they are members of the Stamp Medallion Program.

Garantie de signature: La signature apposée aux fins de cette cession doit correspondre exactement au nom qui est inscrit au recto du certificat, sans aucun changement, et doit être garantie par une banque à charte canadienne de I’Annexe 1 ou un membre d’un programme de garantie de signature Medallion acceptable (STAMP, SEMP, MSP). Le garant doit apposer un timbre portant la mention « Signature garantie » ou « Signature Guaranteed ».

Aux États-Unis, seuls les membres d’un « Medallion Signature Guarantee Program » peuvent garantir une signature.

Les garanties de signature ne peuvent pas être faites par des caisses d’épargne (« Treasury Branches »), des caisses de crédit (« Credit Unions ») ou des Caisses populaires, à moins qu’elles ne soient membres du programme de garantie de signature Medallion STAMP.

SECURITY INSTRUCTIONS - INSTRUCTIONS DE SÉCURITÉ

THIS IS WATERMARKED PAPER, DO NOT ACCEPT WITHOUT NOTING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK.

PAPIER FILINGRANÉ, NE PAS ACCEPTER SANS VÉRIFIER LA PRÉSENCE DU FILIGRANE. POUR CE FAIRE, PLACER À LA LUMIÈRE.

BI_COMP_V2_03

EX-99.5

Exhibit 99.5

LOGO

ANNUAL INFORMATION FORM

FOR THE YEAR ENDED

DECEMBER 31, 2014

March 30, 2015

TABLE OF CONTENTS



EXPLANATORY NOTES			1

CAUTION REGARDING FORWARD-LOOKING STATEMENTS			1

CORPORATE STRUCTURE			3

BUSINESS OF THE CORPORATION			4

GENERAL DEVELOPMENT OF THE BUSINESS			32

RISK FACTORS AND UNCERTAINTIES			40

DIVIDENDS			64

DESCRIPTION OF CAPITAL STRUCTURE			64

MARKET FOR SECURITIES			67

DIRECTORS AND OFFICERS			70

LEGAL PROCEEDINGS AND REGULATORY ACTIONS			77

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS			78

TRANSFER AGENT AND REGISTRAR			78

MATERIAL CONTRACTS			78

INTEREST OF EXPERTS			80

ADDITIONAL INFORMATION			80

EXPLANATORY NOTES

Unless otherwise indicated, the information contained in this annual information form is stated as at December 31, 2014, and unless the context otherwise requires, references to “Amaya”, the “Corporation”, “we”, “us”, “our” or similar expressions refer to Amaya Inc. and its subsidiaries.

All references in this annual information form to “dollars”, “CDN$” and “$” refer to Canadian dollars, references to “US$” refer to United States dollars, references to “€” refer to Euros and references to “£” refer to British pound sterling. We have proprietary rights to a number of company names, product names, trade names and trademarks used in this annual information form that are important to our business, including, without limitation, Amaya, PokerStars and Full Tilt. We have omitted the registered trademark (®) and trademark (™) symbols for such trademarks when used in this annual information form. All other names and trademarks are the property of their respective owners.

Market data and certain industry data and forecasts included in this annual information form were obtained from market research, publicly available information, reports of governmental agencies and industry publications and surveys. Amaya has relied upon industry publications as its primary sources for third-party industry data and forecasts. Industry surveys, publications and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Amaya has not independently verified any of the data from third-party sources, nor has Amaya ascertained the underlying economic assumptions relied upon therein. Similarly, industry forecasts and market research, which Amaya believes to be reliable based upon management’s knowledge of the industry, have not been independently verified. By their nature, forecasts are particularly subject to change or inaccuracies, especially over long periods of time. In addition, Amaya does not know what assumptions regarding general economic growth were used in preparing the forecasts cited in this annual information form. While Amaya is not aware of any misstatements regarding Amaya’s industry data presented herein, Amaya’s estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under “Risk Factors and Uncertainties” in this annual information form.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This annual information form contains certain information that may constitute forward-looking information within the meaning of Canadian securities laws, which Amaya refers to in this annual information form as forward-looking statements. These statements reflect Amaya’s current expectations related to future events or its future results, performance, achievements, business prospects or opportunities and products and services development, and future trends affecting the Corporation. All such statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “would”, “should”, “believe”, “objective”, “ongoing” or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this annual information form. Such statements are based on a number of assumptions which may prove to be incorrect, including, without limitation, assumptions about:

•

the ability of the Corporation to secure, maintain and comply with all required licenses, permits and certifications to distribute and market its solutions in the jurisdictions where the Corporation is currently doing business or intends to do business;

•

the anticipated regulation of gaming in various jurisdictions, notably for interactive (online/ mobile) gaming;

•

the overall business and economic conditions;

- 1 -

•

the potential financial opportunity of the Corporation’s addressable market;

•

the potential financial opportunity of individual contracts signed by the Corporation with customers;

•

the competitive environment;

•

the protection of the Corporation’s current and future intellectual property rights;

•

the ability of the Corporation to recruit and retain the services of its key technical, sales, marketing and management personnel;

•

the ability of the Corporation to develop commercially viable solutions as a result of its research and development activities;

•

the ability of the Corporation to obtain additional financing on reasonable terms or at all;

•

the ability of the Corporation to integrate its acquisitions and generate synergies; and

•

the impact of new laws and regulations in Canada, the United States or any other jurisdiction where the Corporation is currently doing business or intends to do business.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the “Risk Factors and Uncertainties” section of this annual information form: the heavily regulated industry in which the Corporation carries on business; online gaming generally; current and future legislation with respect to online gaming; potential changes to the gaming regulatory scheme; legal and regulatory requirements; significant barriers to entry; competition; impact of inability to complete future acquisitions or to integrate businesses successfully; ability to develop and enhance existing solutions; risks of foreign operations generally; protection of proprietary technology and intellectual property rights; lengthy and variable sales cycle; ability to recruit and retain management and other qualified personnel; defects in the Corporation’s solutions, products or services; losses due to fraudulent activities; impact of currency fluctuations; management of growth; contract awards; service interruptions of Internet service providers; ability of Internet infrastructure to meet applicable demand; systems, networks or telecommunications failures or cyber-attacks; regulations that may be adopted with respect to the Internet and electronic commerce; refinancing risks; customer and operator preferences and changes in the economy; changes in ownership of customers or consolidation within the gaming industry; litigation costs and outcomes; expansion into new gaming markets; relationships with distributors; and natural events. These factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those expressly or impliedly expected or estimated in such statements. Shareholders and investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Although the Corporation cautions that the foregoing list of significant risk factors, as well as those risk factors presented under the heading “Risk Factors and Uncertainties” and elsewhere in this annual information form, are not exhaustive, shareholders and investors should carefully consider them and the uncertainties they represent and the risks they entail. The forward-looking statements contained in this annual information form are expressly qualified by this cautionary statement. Unless otherwise indicated by the Corporation, forward-looking statements in this annual information form describe Amaya’s expectations as of March 30, 2015 and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements, except in accordance with applicable securities laws.

- 2 -

CORPORATE STRUCTURE

Name, Address and Incorporation

Amaya Inc. was incorporated under Part IA of the Companies Act (Québec) on January 30, 2004 under the name 9138-5666 Québec Inc. and is now governed by the Business Corporations Act (Québec) (the “QBCA”). Since its incorporation, the Corporation has amended its articles on numerous occasions. The Corporation first amended its articles on May 14, 2007 to change its name to Gametronix Systems Inc., to subdivide its Class A shares, to amend the Corporation’s borrowing powers, to amend provisions limiting the number of shareholders of the Corporation and to amend the provisions prohibiting the public offering of its securities. On November 2, 2007, the Corporation amended its articles to change its name to “Amaya Gaming Group Inc.” On May 11, 2010, the Corporation amended its articles to, among other things: (i) increase the authorized capital of the Corporation by creating an unlimited number of common shares (the “Common Shares”) and an unlimited number of preferred shares; (ii) re-designate Class A shares as Common Shares on the basis of 1.7756 Common Shares for each Class A share; (iii) re-designate Class G shares as Common Shares on the basis of 100 Common Shares for each Class G share; and (iv) eliminate all classes of shares except for Common Shares. On July 7, 2010, immediately before the filing of a prospectus for the initial public offering of the Corporation (the “IPO”), the articles of the Corporation were amended to remove the private company restrictions on securities transfers. The articles of the Corporation were further amended in connection with the acquisition of Oldford Group Limited (now known as Amaya Group Holdings (IOM) Limited), parent company of Rational Group Ltd., the owner and operator of the PokerStars and Full Tilt brands, on August 1, 2014 (the “Rational Group Acquisition”) to, among other things: (i) replace the then current class of authorized preferred shares with a new class of non-voting convertible preferred shares (the “Preferred Shares”); (ii) change the Corporation’s name to “Amaya Inc.”; (iii) add certain provisions affecting the Common Shares to facilitate the Corporation’s compliance with applicable gaming regulations; and (iv) provide for the appointment, from time to time, by the board of directors of the Corporation (the “Board”) of additional directors up to a maximum of one-third of the number of directors elected at the immediately preceding meeting of shareholders of the Corporation.

The Corporation’s head and registered office address is 7600 TransCanada Highway, Pointe-Claire, Québec H9R 1C8, Canada and the Corporation’s telephone number is (514) 744-3122. The Corporation’s website address is www.amaya.com. The information contained on, or that can be accessed through, the Corporation’s website is neither part of nor incorporated by reference into this annual information form. The Corporation has included its website address in this annual information form solely as an inactive textual reference.

Intercorporate Relationships

The chart below shows Amaya’s principal subsidiaries as at December 31, 2014 and their respective jurisdiction of incorporation or formation, as applicable. Each subsidiary is directly or indirectly wholly owned by Amaya. Amaya has other subsidiaries, but such subsidiaries are not included in this chart because (i) each represents 10% or less of our total consolidated assets and 10% or less of our total consolidated revenues, and (ii) in the aggregate, such subsidiaries do not exceed 20% of our total consolidated assets and 20% of our total consolidated revenues.

LOGO

- 3 -

BUSINESS OF THE CORPORATION

Overview

Amaya is a leading provider of technology-based solutions, products and services in the global gaming and interactive entertainment industries. Through its two reportable segments, Business-to-Consumer (“B2C”) and Business-to-Business (“B2B”), Amaya is focused on developing, operating and acquiring interactive technology-based assets with high-growth potential in existing and new markets and industries or verticals. Amaya’s B2C business currently consists of the operations of Amaya Group Holdings (IOM) Limited (formerly known as Oldford Group Limited) and its subsidiaries (collectively, “Rational Group”), which, among other things, currently offer online and mobile real-money and play-money poker and other gaming products, including casino and sports betting (also known as sportsbook), as well as certain live poker tours and events, branded poker rooms at popular casinos in major cities and poker programming for television and online audiences. Amaya’s B2B business currently consists of the operations of certain of its subsidiaries, which offer interactive, land-based and lottery gaming solutions. Amaya strives to not only improve and expand upon its current offerings, including its portfolio of what it believes to be high-growth interactive technology-based assets, but to pursue and capitalize on new global growth opportunities. Amaya seeks to take advantage of technology to provide gaming and interactive entertainment to large networks of customers.

Since the Rational Group Acquisition in August 2014, Amaya’s primary business has been its B2C segment, which currently generates the vast majority of Amaya’s revenues and profits. Based in the Isle of Man and operating globally, Rational Group owns and operates gaming and related interactive entertainment businesses, which it offers under several owned brands, including, among others, PokerStars, Full Tilt, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in major global casinos and poker programming created for television and online audiences. In addition to expanding its existing real-money and play-money poker businesses into new markets, Rational Group has recently targeted growth into other online gaming verticals, notably casino and sportsbook.

Rational Group’s primary brands are PokerStars and Full Tilt, each of which provides a distinct online gaming platform. Currently, according to online poker tracking site Pokerscout.com, the PokerStars and Full Tilt sites collectively hold a majority of the global market share of real-money poker player liquidity, or the volume of people playing as measured by average daily seated ring game real-money poker players, and are among the leaders in play-money poker player liquidity. Since its 2001 launch, PokerStars has become the world’s largest real-money online poker site based on, among other things, player liquidity, according to Pokerscout.com, and the Corporation believes that it has distinguished itself as one of the world’s premier poker brands.

Amaya’s B2B business includes the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide, primarily to land-based and online gaming operators and governmental agencies and bodies and ultimately indirectly to end-users and consumers. Amaya’s B2B solutions are designed to provide end-users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, all of which is intended to improve the profitability, productivity, security and brands of the operators. Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions. Amaya’s B2B segment includes Amaya Alberta Inc. (formerly known as Chartwell Technology Inc. (“Chartwell”)), acquired in July 2011, CryptoLogic Ltd. (“CryptoLogic”), acquired in April 2012, Cadillac Jack Inc. (“Cadillac Jack”), acquired in November 2012, and Diamond Game Enterprises (“Diamond Game”), acquired in February 2014, all of which provide technology, content and services to a diversified base of customers in the regulated gaming industry.

As of the date of this annual information form, and as previously announced with respect to certain subsidiaries, Amaya and its management have initiated a strategic review process to explore the divestiture of these assets. The fundamental objective of this review is to expedite the Corporation’s overall business strategy and maximize shareholder value. In furtherance of its B2B assets review and overall business strategy, the Corporation completed its sale of Ongame Network Ltd (“Ongame”) to NYX Gaming Group Limited (TSXV: NYX) (“NYX Gaming Group”) in the fourth quarter of 2014, as detailed below, and announced the Innova Offering and the CJ Sale (each as defined below).

- 4 -

On March 26, 2015, Amaya announced that its wholly owned subsidiary, Innova Gaming Group Inc. (“Innova”), had filed and obtained a receipt for a preliminary prospectus in respect of Innova’s proposed initial public offering of common shares with the securities regulatory authorities in all of the provinces and territories in Canada (the “Innova Offering”). The Innova Offering contemplates a treasury offering of common shares by Innova and a secondary offering of common shares of Innova by Amaya, which will receive the net proceeds from such secondary offering. Amaya formed Innova in connection with the Innova Offering and, upon consummation of the Offering, Innova will hold all of the shares of Diamond Game.

On March 30, 2015, Amaya announced that it entered into a definitive agreement to sell Cadillac Jack (the “CJ Sale”) for approximately $476 million comprising cash consideration of $461 million, subject to adjustment, and a $15 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, Amaya anticipates closing the CJ Sale in 2015. Amaya anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the CJ Credit Facilities and New CJ Facilities (each as defined below).

Pending its strategic review of its remaining B2B assets, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth. There can be no assurance as to if and when the Innova Offering or CJ Sale will occur or whether the Corporation’s strategic review process for its remaining B2B assets will result in the consummation of any specific action.

B2C

Online and Mobile Poker

Rational Group’s primary brands are PokerStars and Full Tilt, each of which provides distinct online and mobile gaming platforms. Since the Rational Group Acquisition in August 2014, Amaya, through Rational Group, has maintained PokerStars and Full Tilt as two distinct brands while connecting the two platforms (although not player liquidity) to facilitate increased customer game play and transfer and use of funds. As part of this dual brand strategy, Amaya has kept the PokerStars and Full Tilt development teams separate, allowing both to continue creating distinct user experiences while permitting its customers to link accounts between the sites, thereby simplifying the transfer of funds and game play. Descriptions of these brands and their respective offerings are provided below.

PokerStars

PokerStars, which launched in 2001, is the world’s largest online poker site and as of December 31, 2014, serves a global customer base of more than 68 million registered members (which includes all customer accounts whether or not any such account is currently active) in nearly 30 different languages. PokerStars provides both desktop (through its downloadable client interface, which includes the new PokerStars 7 interface, and online sites) and mobile (through its mobile applications) services and products to its customers, including real-money online poker ring (or cash) game and tournament variations, such as scheduled tournaments, spin & go’s, which are fast-paced, three-handed sit and go tournaments, and jackpot spin & go’s, among others. PokerStars’ poker product offerings are also currently varied among buy-in and limit amounts and types, as well as among 13 poker game variants (e.g., Texas Hold-‘Em, Omaha, Stud, Draw and mixed games). PokerStars, through various Rational Group subsidiaries, is licensed or legally operates under third party licenses, as applicable, to operate in various jurisdictions throughout the world, including the Isle of Man, Malta, Estonia, Spain, Greece, Denmark, Belgium, France, Italy, the United Kingdom and Bulgaria. According to Pokerscout.com, PokerStars is home to the largest online poker events and the biggest weekly tournaments, both in terms of dollar amount and number of players, and offers more daily tournaments than any other online poker site. More than 115 billion hands of poker have been dealt on PokerStars since inception, which is more than any other online real-money poker site. PokerStars has set many records, including the largest number of players in an online poker tournament (225,000), the largest prize pool awarded for a series of online tournaments (approximately US$75.6 million), and the largest ever single online tournament prize (approximately US$12.4

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million). As of December 31, 2014, PokerStars’ mobile applications were among the most popular play-money and real-money poker applications on the iOS and Android platforms according to App Annie and Apple’s iTunes App Store and based on the number of downloads and overall customer ratings.

PokerStars also offers social gaming through one of its online sites, PokerStars.net, and through the PokerStars Play mobile application on various mobile platforms, such as Facebook, Apple’s iOS and Google’s Android. Social gaming involves playing poker or other online casino games for play-money, or virtual currency, with other people through social networks. PokerStars’ current social gaming offerings, which are limited to poker, are free to play, attract a diverse community of players and attempt to leverage the global connectivity of various social networks. Through the use of play-money, which is awarded or may be purchased, these social games are designed to create social interaction, engagement and competition.

Amaya’s product development team continuously analyzes the data generated by its customers’ game play and social interactions, as well as customer feedback, to guide the creation of new content, game variants and features, and enhance the overall customer experience.

Full Tilt

Full Tilt, which launched in 2004, quickly became a popular online poker site by delivering what the Corporation believes is innovative and realistic online poker game play, which has evolved from and is based on input from some of the world’s leading poker players. As of December 31, 2014, Full Tilt served a global customer base of more than 22.8 million registered members (which includes all customer accounts whether or not any such account is currently active). In addition to its ring game and tournament variations, which are similar to those offered under the PokerStars brand, through its unique poker formats, such as Rush Poker and Adrenaline Rush Poker, Full Tilt offers its players fast-paced, quick-fold gameplay, including the ability to move tables for each hand and place early bets (i.e., prior to the flop), on both desktop (through its downloadable client interface and online sites) and mobile (through its mobile applications). Full Tilt, through various Rational Group subsidiaries, is licensed or legally operates under third party licenses, as applicable, in various jurisdictions throughout the world under licenses, including, the Isle of Man, Malta, Greece and United Kingdom governments. Since inception, Full Tilt has dealt over 34 billion hands of poker.

Other Online and Mobile Gaming Products

In addition to expected organic growth in online and mobile poker in existing and new markets, Amaya believes that there are potentially significant opportunities for growth in new verticals. Specifically, Amaya believes that these new verticals initially include online and mobile casino and sportsbook, and such potential opportunities include the ability to capitalize on cross-selling these new verticals to its existing customer base, as well as to new customers. In addition to online and mobile casino and sportsbook, Amaya currently intends to explore other growth opportunities, including, without limitation, expanding upon its current social gaming offering and pursuing opportunities in fantasy sports.

Casino

In January 2014, Full Tilt expanded its game portfolio by initially offering a variety of play-money table and casino games on its global online sites, including a range of single- and multi-player variations of blackjack and roulette, online slots and live dealer games. As of December 31, 2014, Full Tilt had launched a real-money online casino offering in numerous jurisdictions, including in the United Kingdom and certain other European jurisdictions. Since its initial launch, Amaya has been successful in cross-selling Full Tilt’s online casino offering to approximately 30% of its active poker customers in eligible markets.

In December 2014, Amaya completed the introduction of play and real-money casino games under the PokerStars brand to players in eligible markets on the global PokerStars.com network and in the ringfenced market of PokerStars.es. Amaya has made the casino table games, single- and multi-player blackjack and roulette, available through the new PokerStars 7 client interface. Amaya believes that, like the Full Tilt casino offerings, offering casino

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games under the PokerStars brand may attract new customers as well as provide a beneficial cross-selling opportunity to its existing customer base. Amaya currently expects to expand its online casino game offerings in certain markets beginning in the first half of 2015 to include slot machines and additional games under the PokerStars brand. Additionally, Amaya currently intends to launch online and mobile versions of full-featured casinos on both its PokerStars and Full Tilt casino platforms by the end of 2015.

Sportsbook

Real-money online sportsbook involves online wagering on the outcome of sporting events as well as horse and dog races using real-money. Amaya currently expects to launch sports betting, initially for sporting events and later for horse and dog races, under the PokerStars brand beginning in the first half of 2015, first within select jurisdictions on the PokerStars global network and later in additional markets and through mobile platforms. Similar to real-money online casino, Amaya believes that real-money online sportsbook may attract new customers as well as provide it with a strong cross-selling opportunity to its current customer base. The Corporation intends to leverage third-party services for non-differentiating components of its sports betting offering while it continues to control the payments, customer service, marketing and other key differentiating factors of the business.

B2B

In addition to its B2C business, Amaya offers diversified gaming solutions, products and services through its B2B business. Amaya’s B2B business includes the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming and interactive entertainment industries worldwide, primarily to land-based and online gaming operators and governmental agencies and bodies, as well as to the hospitality industry and ultimately indirectly to end-users and consumers. These solutions, products and services primarily consist of interactive gaming solutions, land-based gaming solutions and lottery solutions, each of which is described below. As of the date of this annual information form, and as previously announced with respect to certain subsidiaries, Amaya and its management have initiated a strategic review process to explore alternatives for its B2B business. The fundamental objective of this review is to expedite the Corporation’s overall business strategy and maximize shareholder value. In furtherance of this B2B strategy, the Corporation completed its sale of Ongame to NYX Gaming Group in the fourth quarter of 2014, and announced the Innova Offering on March 26, 2015 and the CJ Sale on March 30, 2015. See “Business of the Corporation – Overview”. Pending its strategic review of its remaining B2B assets, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth. There can be no assurance as to if and when the Innova Offering or CJ Sale will occur or whether the Corporation’s strategic review process for its remaining B2B assets will result in the consummation of any specific action. See “Business Strategy of the Corporation” below.

Interactive Gaming Solutions

Amaya’s interactive gaming solutions include:

Casino Gaming System

Amaya’s Casino Gaming System (“CGS”) offers gaming operators a complete online casino solution with immediate access to a library of more than 500 online casino games from Amaya and multiple third party content developers, including Scientific Games (specifically its subsidiaries Bally Technologies and SHFL Entertainment), IGT, Aristocrat and Betsoft. This library of both proprietary and third-party content is available via a seamless integration of Amaya’s CGS with the operator’s platform, providing the operator with access to top quality content from multiple game developers through an efficient, one point integration rather than through multiple remote gaming servers. For third-party content developers, Amaya believes that it can provide rapid time-to-market by offering such developers’ games as part of the CGS through online gaming portals operated by Amaya’s licensees. Amaya’s CGS includes:

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mobile-ready (HTML5) game titles to support a mobile casino offering;

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a range of slot, table, video poker, shared jackpot, fixed odds and remote live dealer table games;

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branded titles featuring popular games, movie themes and characters developed by companies that have entered into licensing agreements with Amaya and its third party content providers;

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game styles suited for all demographics;

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games certified by regulatory bodies for use in multiple jurisdictions;

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regular introduction of new and innovative games;

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ongoing introduction of new game titles from Amaya’s growing list of well-known third-party content providers; and

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a powerful back office solution including:

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reporting functionality, including game, player transaction, daily and monthly overview and jackpot reports;

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configuration capability, for betting limits, betting denominations, jackpots and return-to-player percentage levels;

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bonus offering provision capability, including deposit bonuses, loyalty points, code bonuses and registration bonuses; and

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a customer service team for operators and their players with support in multiple languages and a risk team that works to identify and prevent fraudulent activity and conduct transaction analysis to monitor for possible money laundering.

Amaya also provides related services beyond its technology, customer service and risk support, such as promotional and marketing services for affiliate management, product and games operation and management, website development, player retention, search engine optimization, business intelligence and analytics, and customer relationship management.

Ongame Poker Solution

Amaya acquired the Ongame poker software and network solutions platform through its acquisition of Ongame in November 2012. Amaya subsequently sold this portion of the B2B business in November 2014; however, until then, Ongame, which operated as a subsidiary of the Corporation, offered a complete business-to-business online poker solution for gaming operators that allowed these businesses to offer poker under their own brand and through their own custom designed web portals while participating in a network of poker players from Ongame’s gaming operator licensees. See “General Development of the Business - Divestitures”.

Game Office Platform

The AGO platform provides gaming operators with support for multiple custom-built web portals and brands on all devices with the ability to offer all interactive gaming verticals including online casino, poker, sportsbook and bingo. It also allows for the seamless integration of content for these verticals from Amaya and third-party providers and incorporates third party customer relationship management, business intelligence, and marketing tools which are tightly integrated to provide marketers with the ability to run seamless end-to-end automated campaigns and promotions. All customer and game data are available through a central repository data warehouse. Related services include end-user technical support, software maintenance and hosting services, software security and backup services, payment and anti-fraud services. Amaya subsequently sold this portion of the B2B business along with Ongame in November 2014. See “General Development of the Business – Key Completed Transactions - Divestitures”.

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Mosino

Mosino, an all-in-one hospitality platform, targets hospitality industry participants in addition to gaming operators. Depending on the environment, the Mosino platform can provide:

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digital concierge services that manage all guest requests and communications on a single platform; and

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revenue producing services, such as:

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Internet and WiFi access for all guest devices anywhere in the resort;

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video-on-demand service with continuously updated content;

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online casino games, including peer-to-peer or house-banked games, through networked or stand-alone play.

Land-Based Gaming Solutions

Amaya’s land-based gaming solutions consist primarily of games, game systems and related services and support, for the Mexican gaming market and Class II and Class III gaming markets in the United States (as described below in “Regulatory Environment”), as well as commercial casinos, slot route operators, charitable gaming establishments/bingo halls, the video lottery terminal (VLT) market and racetracks and racinos.

Through its subsidiary, Cadillac Jack, Amaya designs, manufactures and markets a dynamic portfolio of:

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electronic games and systems for the regulated global gaming industry, offering a variety of high performing, feature-rich products designed for premium player experiences, including a variety of game themes, bonus options and math models;

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progressive product lines including wide-area, local-area, and multi-level progressives which offer players rewarding jackpots across a variety of cabinet styles and games; and

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slot management services and systems, including tools to monitor and balance the mix of gaming machines on a casino floor.

Cadillac Jack’s gaming machines feature proprietary games from a library of more than 100 game titles, with new titles developed on a continuous basis, that are available in multiple cabinet configurations.

Through its subsidiary Diamond Game, Amaya designs, develops, produces, markets and services games, systems and instant tickets for the North American gaming industry, predominantly for the business to government lottery sector and also for the Class II bingo markets.

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Lottery Solutions

Amaya’s lottery solutions are designed to permit gaming jurisdictions to exploit additional sources of revenue. They consist primarily of the following:

Instant Ticket Vending Machines (“ITVM”)

The Lottery Products division of Diamond Game creates innovative products for public gaming and charity markets. Diamond Game’s primary lottery product is the LT-3 ITVM. The LT-3 is a ticket dispenser with a video monitor that dispenses pre-printed instant scratch or break open or pull-tab tickets on each play but also includes video animation of the game result to enhance entertainment and bring excitement to the player experience. Diamond Game’s full library of game themes is available for all LT-3 cabinet types, and the game result can be displayed using various video animation options including pull tab display, scratch display, popping symbols or spinning reels. The LT-3 is designed for “stay and play” use, creating longer play sessions and higher sales volumes, to assist lotteries with expanding their existing retailer base into less traditional venues, such as bars, taverns, bingo halls, veteran’s halls, and social clubs. Through Diamond Game, Amaya holds multiple patents related to the unique devices. The ITVMs can also be linked across locations to a robust central system that provides accounting records. Through Diamond Game, Amaya believes it can provide a turnkey solution including the machines, tickets, central system, and service.

Business Strategy of the Corporation

Following the Rational Group Acquisition, Amaya’s primary strategy has been to enter into and expand its B2C business while conducting a strategic review of its B2B business. Amaya continues to focus on the creation of long-term shareholder value by building upon its existing strengths and expanding and strengthening its portfolio of products and services that the Corporation expects will deliver sustainable, profitable long-term growth. To do this, Amaya is undertaking a number of ongoing strategic initiatives, including:

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Strengthening and Expanding its Products and Services and Developing its Intellectual Property: While seeking to grow its online and mobile poker offerings through innovative marketing campaigns, Amaya intends to expand its B2C business through the addition of online and mobile sports betting and the continued introduction of online and mobile casino games, as well as through expanded social gaming offerings and potentially fantasy sports in the future. Through the introduction of sports betting and a full casino offering, Amaya expects to attract new customers, cross-sell to existing customers and keep customer leisure time and spending within Amaya’s various products and services. In addition, Amaya presently intends to continue to invest in and support the development of its online, mobile and live poker offerings. Amaya seeks to become the global market leader across all gaming verticals through its comprehensive product offerings, customer service and dedication to security, game integrity and transparency. See “Business Strategy of the Corporation - B2C” and “Regulatory Environment - Regulatory Strategy”. Moreover, Amaya seeks to develop its products and services and the intellectual property underlying them by, among other things, (i) developing product enhancements and improvements, including with respect to the security of its technology and customer data, as well as with respect to new content and features to enhance the overall customer experience, (ii) expanding the flexibility of its product offerings and technology infrastructure to allow for customization and integration to address new markets and jurisdictional demands, including new niche markets, (iii) improving its product and service offerings and underlying software and technology platform to adapt to the rapidly changing nature of the gaming and interactive entertainment industries, and (iv) protecting its intellectual property in jurisdictions where the Corporation determines there are strategic or other benefits for doing so.

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Expanding its Geographical Reach: We currently intend to expand our geographical reach by seeking to obtain licensure in jurisdictions as they regulate online gaming, such as the United States, and by promoting the regulation of new markets, such as Asia. Amaya’s B2C business currently has relatively

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little exposure to markets in Asia and it generates no revenue in the United States. If and when certain of these markets become regulated, Amaya expects they can become significant growth opportunities for the Corporation. With respect to the United States, Amaya is currently offering its B2B interactive gaming solutions to online gaming operators in the State of New Jersey and has an application in process to obtain licenses that would enable the Corporation to operate its PokerStars and Full Tilt business in the State of New Jersey. See “Regulatory Environment - Regulation of the B2C Business - United States - New Jersey”. In addition, Amaya intends to offer its online poker products in certain other U.S. states, subject to implementation of a regulatory framework and required licensure, as states pass legislation approving online gaming within their borders, such as the State of California. The Corporation’s current strategy in Asia primarily seeks to promote brand awareness and market development through various gaming, non-gaming and land-based efforts, such as the recent PokerStars sponsorship of a Japanese model and actress as a new celebrity brand ambassador, the 2015 Nanjing Millions Event to be held at the Nanjing Olympic Sports Centre in April 2015 and the PokerStars LIVE branded poker room at the City of Dreams in Manila. Amaya is also actively seeking to obtain new licenses in certain regulated gaming markets to provide its online gaming offerings. Amaya’s multi-faceted strategy to expand its geographical reach includes (i) building relationships with governments, online and land-based casino operators and hospitality industry operators, and (ii) working with regulators and government officials to implement regulations beneficial to each of the U.S. states and other jurisdictions in which we may seek to operate, customers and operators.

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Pursuing Strategic Acquisitions and Divestitures: Since 2011, Amaya has completed numerous strategic acquisitions that it believes have significantly expanded its diversified gaming solutions, delivered distribution capability and expanded market reach. The most significant of these acquisitions was Amaya’s entrance into its B2C business through the transformative Rational Group Acquisition. Amaya may pursue additional strategic acquisitions to leverage its large customer base and further its strategy of long-term growth and enhanced shareholder value. In addition, Amaya may also pursue strategic divestitures for the same or similar purposes. In this regard, Amaya is exploring strategic opportunities to divest its B2B business and to use the proceeds to repay outstanding indebtedness or repurchase the Corporation’s Common Shares pursuant to the 2015 NCIB (as defined below). In furtherance of this B2B strategy, the Corporation completed its sale of Ongame to NYX Gaming Group in the fourth quarter of 2014, and announced the Innova Offering on March 26, 2015 and the CJ Sale on March 30, 2015. See “Business of the Corporation – Overview”. Pending its strategic review of its remaining B2B assets, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth. There can be no assurance as to if and when the Innova Offering or CJ Sale will occur or whether the Corporation’s strategic review process for its remaining B2B assets will result in the consummation of any specific action.

B2C Marketing Strategy and Revenue Model

B2C Marketing Strategy

Amaya’s B2C marketing strategy seeks to widen brand appeal to new and more casual and recreational customers, while continuing to provide exceptional service to existing and more experienced customers, who currently represent the vast majority of revenues through and traffic on the Corporation’s sites. Although the anticipated focus will initially be on poker, as casino, and later sportsbook, offerings become more significant elements of the B2C business, we currently anticipate increasing our focus and attention on marketing efforts that highlight these offerings.

Amaya markets its B2C brands, products and services, including PokerStars and Full Tilt, as applicable, through various legally permissible platforms and channels, including, without limitation, live poker tours and branded poker rooms, which also generate nominal revenue, endorsement agreements and various media outlets. Below is a general description of such platforms and channels.

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Poker Tours and Events

In addition to providing online and mobile gaming products, Amaya also produces some of the world’s largest live poker tours and televised poker events. Through Rational Group, Amaya stages and hosts popular live poker tournament series in major cities globally through the European Poker Tour, Asia-Pacific Poker Tour, Latin America Poker Tour and PokerStars Caribbean Adventure. Each tour is sponsored directly by PokerStars, which provides additional promotion for the PokerStars brand through the tour’s widespread television and multimedia distribution. The live poker tours are also largely marketed through various media sources and news coverage.

Founded in 2004, the European Poker Tour is known in the industry as Europe’s most popular poker tour, and has staged and hosted successful tournament series across Europe, currently stopping in seven destinations, including Monte Carlo, London, Sanremo, Barcelona and Prague. The European Poker Tour is filmed and widely televised throughout Europe. The European Poker Tour attracts numerous players from across the world and offers lucrative prize pools, with the latest completed season (completed in May 2014) including over 11,500 players from 118 countries with a total prize pool of approximately €98 million. The Asia-Pacific Poker Tour, which hosts events at luxury casinos throughout Asia, has been operating since 2007 and we believe has helped expand the popularity of poker in Asia. The Asia-Pacific Poker Tour is responsible for bringing the first major government-sanctioned real-money “Texas hold ‘em” poker tournaments to South Korea and China. Founded in May 2008, the Latin America Poker Tour brings world-class poker tournaments to locations such as Panama, Brazil, Peru and Uruguay, and attracted more than 3,800 players from 51 countries in the latest completed season (completed in May 2014) with a total prize pool of approximately US$6.5 million. The PokerStars Caribbean Adventure, which was founded in 2004 on a popular Caribbean cruise ship, is held each year at the Atlantis Casino and Resort on Atlantis Paradise Island in the Bahamas. The PokerStars Caribbean Adventure is considered in the industry as one of the most popular in the world and, since inception, has awarded more than US$203 million in prize money. The PokerStars Caribbean Adventure involves thousands of players, including hundreds of qualifiers from PokerStars.com, as well as various professional athletes and celebrities.

Branded Poker Rooms

Amaya has also branded, under the PokerStars LIVE name, live poker rooms at popular casinos in major cities around the world, including the Hippodrome Casino in London and the City of Dreams Casino in both Macau and most recently, Manila. The Corporation anticipates that this new integrated casino resort in Manila may become a premier leisure and entertainment destination in the Philippines, which has a thriving poker community, much like its regional neighbour Macau. These PokerStars LIVE branded rooms adhere to the same global design concept but are tailored to the specific location, which in each case is developed by the Corporation along with a design agency, and is intended to provide a strong brand presence through common elements across each location.

Endorsement Agreements

Amaya endorses several celebrities and professional poker players, or ambassadors, both at global and regional levels. In particular, these ambassadors comprise four categories: Team Pro, which includes professional poker players; Team SportStars, which includes professional athletes; celebrities, which includes local, regional and global celebrities with an interest in poker; and friends, which includes ambassadors that have a personal connection to certain of the Corporation’s brands. Celebrities are engaged primarily to generate new customer participation and vertical growth whereas Team Pro and Team SportStars are engaged primarily for customer experience and retention.

Media

Amaya has a multimedia approach focusing on acquiring and retaining customers both online and offline for its brands, products and services, including PokerStars and Full Tilt. This includes, among other things, legally permissible television programming and television advertisement campaigns, affiliate partnerships, digital advertisements and online campaigns, paid search optimization, and various social media campaigns.

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The Corporation broadcasts various televised poker programs and advertisement campaigns that run throughout the year at different intervals. Live poker tournaments are also filmed at various PokerStars events, including our PokerStars sponsored tours, and broadcast as television shows on different channels in several countries. These live events are also broadcast online on various sites, including YouTube and PokerStars.tv. Other forms of television programs that the Corporation broadcasts include reality shows and poker-based dramas which are developed and produced together with various production companies.

The Corporation also engages third party search engine and online traffic optimization companies to increase the Corporation’s online presence and traffic to its websites. In addition, the Corporation employs various display campaigns through banner advertisements, social media campaigns, and paid-for placements in search engines. These campaigns are directed at both existing and new desktop and mobile customers.

Revenue Model

Amaya’s B2C revenue model is based primarily on two main offerings, real-money games, both online and mobile (and nominally through its live poker tours and branded poker rooms), and online and mobile play-money games. Although prior to the Rational Group Acquisition in August 2014 the vast majority of Amaya’s revenues in 2014 were generated by its B2B land-based and interactive gaming solutions, following the Rational Group Acquisition, the vast majority of its revenues were, and the Corporation expects its revenues to continue to be, generated by its client interface, online and mobile gaming platforms under the B2C business segment. Following the Rational Group Acquisition, the B2C revenues were generated almost entirely through the provision of real-money poker offerings, followed by play-money and casino offerings.

Real-Money Games

The Corporation’s current real-money gaming offerings are poker, casino and sportsbook, each with its own revenue model.

In poker, players play against each other in either ring games (i.e., games for cash on a hand-by-hand basis) or in tournaments (i.e., players play against each other for tournament chips with prize money distributed to the last remaining competitors) or variations thereof. The Corporation collects a percentage of each pot, or the rake, in ring games and a tournament entry fee for scheduled tournaments and sit and go tournaments, and does not have any of its own capital at risk. These amounts comprise gross revenue, which is typically reduced by offsets to arrive at net revenue. Offsets are the portion of gross revenue that the Corporation allocates to customer bonuses, loyalty programs, free play and promotions, which are used to acquire new customers and retain existing customers.

Online casino offerings typically include the full suite of games seen in a land-based casino, such as blackjack, roulette and slot machines. For these offerings, the Corporation functions in a similar fashion to land-based casinos, generating revenue through hold, or gross winnings, as players play against the house. In online casino, the Corporation believes there is typically lower volatility from the statistical norm versus land-based casinos as there are a larger number of bets placed at small denominations. Also similar to land-based casinos, offsets are typically provided by the Corporation in the same or substantially similar form as they are provided for poker.

Sportsbook involves players wagering on the outcome of sporting events as well as horse and dog races. Like casino offerings, the Corporation will generate sportsbook revenues through hold based on a certain margin to ensure that the house has an advantage. Like online casino, in online sportsbook, the Corporation believes there is typically lower volatility from the statistical norm versus land-based sportsbook as there are a larger number of bets placed at smaller denominations. The Corporation’s offsets currently include various forms of free play and promotions, and may, but there is no guarantee that they will, later include sign-up bonuses.

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Play-Money Games

Play-money gaming, which is permitted in various jurisdictions, including the United States, that do not otherwise permit real-money gaming, involves players receiving virtual currency for free, or paying a fee to receive additional virtual currency, which can be used to play certain gaming offerings. In the future, the Corporation expects that some play-money games may require an additional fee to download software upgrades or to buy-in to certain advanced play. The Corporation’s current play-money game offering primarily consists of poker, including through PokerStars Play. There are no cash prizes or other prizes for monetary value, and in most cases, all the player fees are passed to the Corporation as revenue, unless the games are played through social platforms, in which case the platform operator retains a certain percentage for hosting the offering (typically 30% for the hosted versions of the Corporation’s play-money games). Play-money games may be played through the Corporation’s poker client interface, online and mobile platforms, including on social gaming platforms. Offsets include fees charged to the Corporation by the various social platforms, such as Facebook, iOS and Android, marketing and promotions.

B2B Sales and Distribution Strategy and Revenue Model

Sales and Distribution Strategy

Amaya distributes its B2B solutions, products and services through a combination of direct and indirect sales channels. The Corporation believes this strategy allows it to broaden its customer base, while at the same time remaining in contact with its existing customer base and managing costs.

Among other things, Amaya conducts one-on-one meetings with its clients to demonstrate its solutions, products and services at their locations, hosts customers at private demonstrations at their offices and at other locations, and participates in various trade shows domestically and internationally each year. In certain cases, the Corporation responds to competitive requests for proposals from private and public entities who are seeking to procure gaming solutions and services. Amaya also advertises in trade and consumer publications that appeal to casino operators, their employees and casino clients.

Direct Sales Strategy

Amaya’s sales and business development team includes dedicated salespeople assigned to specific customer accounts who seek to build on its existing relationships with customers, as well as closely monitoring the Corporation’s target markets for potential deployments and new customer opportunities.

Indirect Sales Channel Strategy

Amaya utilizes sales agents and distributors to market and offer many of its solutions in various jurisdictions where its marketing reach is otherwise constrained. Amaya’s distributors and sales agents are selected based on experience in the gaming industry, including, without limitation, the number of contacts in the Corporation’s target customer segments.

Amaya’s sales agents and distributors receive ongoing training from Amaya, work with dedicated Amaya account managers, participate in co-operative marketing programs and receive market development funds and support materials for customer sales. Amaya’s personnel assist distributors with initial deployment of the Corporation’s solutions in an effort to provide quality assurance to customers.

Revenue Model

Amaya generates revenues from its B2B business solutions, products and services by outright sales, technology licensing, leasing or on a product participation basis, either directly or indirectly through distribution partners in various jurisdictions. In the product participation and licensing model, products and technology are owned by Amaya and leased or licensed to customers either on a fee basis or at a rate based on a percentage of the revenues generated from the use of the solutions.

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Revenues from Amaya’s interactive gaming solutions are typically generated via software licensing based on a percentage of the gaming operator’s net gaming revenue (or rake in the case of Amaya’s poker platform). Other revenues include ongoing hosting and network administration fees, set-up fees for platform integrations, training, and consultancy services.

Revenues from Amaya’s land-based gaming solutions, including its lottery products, are primarily generated through participation agreements, or on a fixed fee basis, with the gaming operator, under which Amaya receives a percentage share of the revenue generated by its gaming machines and systems or in other instances, a daily fee. Revenues are also generated through the sale of gaming machines either on an outright basis or on a finance or lease basis. Diamond Game primarily generates revenues on a participation agreement or fixed-fee basis for its lottery ITVMs.

Service and Warranty

Amaya provides standard warranties of various lengths with its B2B solutions, products and services, which differ by product or service type and the terms under which gaming machines were placed into gaming facilities, and typically cover defects in materials and workmanship. Warranty obligations and other maintenance services are performed either on-site or at Amaya’s facilities. In the event that the maintenance services are beyond the coverage of the warranty, or the warranty has expired, Amaya charges the client the applicable rate for its technicians in addition to the costs associated with the service call.

Technology Infrastructure and Research and Development

The technology infrastructure used to support Amaya’s B2C and B2B businesses was designed to support its growth by having the flexibility and scalability to adapt and conform to the demands and changes in its solutions, products and services. Amaya is continuously developing its proprietary platforms and has invested significantly in its technology infrastructure since inception to ensure a positive experience for its customers, not only from a gameplay perspective with respect to its B2C business, but most importantly with respect to security and integrity across business segments and verticals. To support Amaya’s strong reputation for security and integrity, Amaya employs what it believes to be industry-leading practices and systems with respect to various aspects of its technology infrastructure, including payment security, game integrity, customer fund protection, marketing and promotion, customer support and VIP rewards and loyalty programs. These security and integrity systems routinely review and evaluate customer backgrounds, game play, financial and transactional activity and related risks, through a variation of management systems, including “know your customer” and related background screening (which collects age and identity information, as well as monitoring against certain prohibited persons and other watch lists), deposit screening, chip dumping screening (which detects abnormal game play and movement of funds), withdrawals screening, collusion detection, bots detection (which detects artificial intelligence-drive game play), multiple account alerts, account restriction and ban detection and a safe mode system (which is based on a customer’s risk profile and limits access to high risk deposit methods). See also “Regulatory Environment — Regulatory Strategy”.

The Company’s research and development (“R&D”) strategy seeks to provide broad market applications for products derived from its technology base. The Corporation’s R&D efforts are focused primarily on the following areas: (i) developing and delivering the Corporation’s pipeline of new products and services; (ii) revitalizing its existing product and services offerings through continued innovation; (iii) developing core technology and platforms for existing and future verticals; (iv) evolving the functionality, security and performance of its offerings and platforms; (v) building software including operating systems, source code, graphics and media frameworks, application runtimes, networking technologies, and mobile applications; (vi) developing server and desktop software for enterprise and consumer environments; (vii) developing infrastructure systems to provide the underlying support for our offerings, systems and platforms; (viii) providing a platform and tools for operations and marketing; and (ix) improving development and testing technologies. The Corporation also engages from time to time in longer term fundamental research and may do so in the future either directly or through the funding of third party projects. The Corporation dedicates a major portion of its R&D investments to its B2C business.

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Markets and Customers

The gaming industry is a large, dynamic and growing global market with a variety of segments, including online, mobile and land-based poker rooms, sports betting, casinos, bingo rooms, lotteries and other gaming mediums. According to gaming industry consultants, H2 Gambling Capital, from 2003 to 2014, the combined global interactive gaming markets, including online poker, casino, sports betting, bingo, lottery and other gaming markets have grown from approximately €6.6 billion to €36.9 billion in 2014 and are expected to grow to approximately €42.8 billion by the end of 2018.

B2C

Online and mobile gaming is the virtual equivalent of many popular land-based games, such as poker, blackjack, roulette, slot machines and sports betting. Online and mobile gaming operators take advantage of scale and technology to provide gaming to large networks of customers. Originating in the mid 1990’s, online gaming has grown steadily over time. Over the past decade, as technology, security and public sentiment has improved, we believe this growth has accelerated.

Online poker saw a rapid rise in popularity beginning in 2003 when Chris Moneymaker won the main event at the World Series of Poker, a prize of US$2.5 million, after winning his entry in a US$39.00 buy-in online satellite tournament on PokerStars. This rise in popularity saw gross gaming revenues (“GGR”) from global online poker grow from a €300.7 million per year industry in 2003 to a €2.8 billion per year industry in 2014, according to H2 Gambling Capital. H2 Gambling Capital forecasts that the online poker market is expected to grow at a compounded annual growth rate (“CAGR”) of approximately 11.5% from 2014 through 2018, driven by growth from various U.S. states regulating online poker.

Online casino has also seen rapid growth over the past decade, with GGRs from the global market growing from €1.6 billion in 2003 to €6.5 billion in 2014 according to H2 Gambling Capital. As online operators continue to expand content and increase product offerings, H2 Gambling Capital forecasts a CAGR in this market of 10.3% from 2014 to 2018. According to industry experts and sources, including H2 Gambling Capital, much of this growth is expected to come from continuing regulation and expansion in the United States.

According to H2 Gambling Capital, online betting makes up the largest segment of the online gaming market at nearly €14.3 billion in revenue in 2013. As with online poker and online casino, according to H2 Gambling Capital, online sports betting saw significant growth from 2003 through 2014 as technology improved and e-commerce became more mainstream. While data collected by H2 Gambling Capital suggests that growth is expected to moderate slightly, the online sports betting market is still projected by H2 Gambling Capital to grow at a CAGR of nearly 7.7% from 2014 through 2018, reaching a total market size of €19.2 billion.

B2B

Amaya believes that the market for its B2B solutions, products and services is large and quickly growing, particularly the market for its lottery, land-based, and interactive solutions. Data compiled by H2 Gambling Capital projects total global gaming market GGRs to increase to approximately €396 billion in 2018 from an estimated €347 billion in 2014, with gaming divided into the product verticals of betting, casino, lotteries, gaming machines and bingo/other gaming and interactive gaming divided into the product verticals of betting, casino, poker, state lotteries, bingo, and skill/other gaming/commercial lotteries.

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Competition

B2C

The industries in which Amaya operates its B2C business are highly competitive, constantly evolving and subject to regulatory and rapid technological change. Amaya faces significant competition in all aspects of its B2C business and competes for customers with other online, mobile and land-based gaming and interactive entertainment developers and operators, as applicable, on the basis of many factors, including, without limitation, the quality of the customer experience, brand awareness, reputation, security, integrity and access to other distribution channels. Although we believe that we compete favorably, our competitors could develop more compelling content and offerings, which could adversely affect our ability to attract and retain customers. Moreover, technological advances have reduced barriers to entry, making it easier for new competitors to enter the market. These competitors, whether known or unknown, may also take advantage of large user and customer bases and networks through social networks to grow rapidly.

There are multiple B2C competitors specializing in offering online and mobile gaming and interactive entertainment products, including developers for online, mobile and social networks, operators of regulated online real-money gaming, live poker tournaments, developers for consoles and other platforms, and other forms of media and entertainment. These competitors range from small, localized companies to large multinational corporations in the jurisdictions where we conduct business. These competitors include, among others, 888 Holdings, bwin.party, Playtech, Paddy Power, Bet365 and Betfair, and traditionally brick and mortar competitors such as William Hill and Ladbrokes. Also, increasing cross-over with social gaming companies, such as Zynga and Caesars Interactive Entertainment, exists for both free-to-play, play-money social offerings and real-money online gaming.

In addition to the factors listed below regarding Amaya’s ability to effectively compete with its B2B competitors, which generally apply across business segments, Amaya’s ability to compete effectively with its B2C competitors is based on a number of factors, including, but not limited to, its ability to (i) maintain its strong reputation among its customers, (ii) maintain appropriate liquidity and a large customer base, (iii) provide comprehensive and varied gaming and entertainment offerings, (iv) provide a superior customer experience, including, the lowest fees, highest promotions, and best-in-class software development, customer service, payment processing, security and integrity, and (v) develop products and offerings designed for distribution across multiple channels with superior functionality and efficient implementation.

B2B

Like the B2C market, the market for B2B diversified gaming solutions, products and services is also highly competitive, constantly evolving and subject to regulatory and rapid technological change. Amaya’s B2B business competes with other gaming solutions providers as well as with gaming operators providing games and gaming solutions and technologies directly to players and customers. Similar to the B2C competitors, Amaya’s B2B competitors range from small localized companies to large multi-national corporations, some of which may have greater financial resources, in every jurisdiction where we conduct business. In addition, new or expanding gaming operators and the legalization of gaming in new jurisdictions each create new product demand and have contributed to significant growth in the overall installed base of gaming solutions, products and services during the past few decades.

There are multiple B2B competitors specializing in specific segments, such as interactive gaming and entertainment, land-based gaming, and lottery, which directly compete for certain segments of the Corporation’s target markets. Amaya’s more significant B2B gaming solutions competitors include Scientific Games Corporation, IGT, the Novomatic Group of Companies and Intralot. Some of these competitors also offer online and mobile gaming and interactive entertainment solutions, products and services directly to operators and end-users.

In addition to the factors listed above regarding Amaya’s ability to effectively compete with its B2C competitors, which also generally apply across business segments, Amaya’s ability to compete effectively with its B2B competitors is also based on a number of factors including, but not limited to, its ability to (i) develop and offer

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games and games systems with higher earnings performance for its customers than the games and gaming solutions of its competitors, (ii) enhance, expand and constantly refresh Amaya’s solutions offerings, (iii) adapt Amaya’s solutions for use with new technologies, (iv) implement product innovation and reliability, (v) implement effective sales and distribution strategies and customer support, and (iv) offer competitive pricing.

Amaya seeks to create solutions with functionality and features superior to other competing products, using innovative architecture and technologies, resulting in a higher degree of customer acceptance and player preference. Amaya believes that its dedicated customer service and support, efficient manufacturing and supply chain management, and extensive research and development activities are competitive advantages for the Corporation. Amaya believes that its reputation for consistently delivering and supporting high quality products will encourage operators to select Amaya’s solutions.

Manufacturing and Supply Chain Management

With respect to the B2C business, the Corporation primarily develops and produces its products and services internally through, among others, internal engineering teams, software architects, internal network operations teams and production operations staff. Amaya’s B2C business development and production includes, without limitation, software development and quality assurance, hosting of software, including gaming services, within the Corporation’s data centers, development of network infrastructure and operations monitoring and maintenance of our products and services. The Corporation engages third parties to assist in development and production on an as-needed basis.

With respect to the B2B business, the Corporation internally develops its solutions, including software development and the integration thereof on hardware gaming devices. Amaya has adopted a hybrid sourcing model. The production of key hardware components is outsourced, while the final assembly, software integration and testing are performed internally. The Corporation currently works with numerous suppliers domiciled in various jurisdictions around the world, including Canada, the United States, the United Kingdom, France, China and Taiwan. Quality assurance is provided by independent testing laboratories specializing in electrical product safety testing, electromagnetic compatibility testing, and benchmark performance testing.

Overall, the Corporation seeks to negotiate competitive pricing with its component and other suppliers, and generally believes that the availability of components and other supplies that it uses are adequate and can be sourced from more than one supplier.

Intellectual Property Rights

The development and protection of intellectual property is a core part of the Corporation’s business strategy and is a key element to our success. We believe that our intellectual property rights currently provide broad and comprehensive coverage for our products and services. Since inception, we have followed a policy and practice of protecting our intellectual property rights in our core business areas through a combination of patents, copyrights, industrial designs, trademarks and trade secret laws, and generally through contractual provisions with third parties who have access to or are otherwise involved in the creation or development of our intellectual property. These protections generally include non-disclosure and confidentiality policies and provisions and the use of appropriate intellectual property ownership and assignment provisions and restrictive covenant agreements with, among others, our employees, contractors, consultants, manufacturers, suppliers, customers and stakeholders. The Corporation actively seeks to protect and enforce its intellectual property rights to prevent unauthorized use by third parties, including through applications for injunctive relief and litigation, as necessary.

In addition, the Corporation seeks to preserve the integrity and confidentiality of its data, trade secrets and know-how by maintaining the physical security of its facilities and the electronic security of its information technology systems. Measures taken by the Corporation to maintain confidentiality of its facilities and systems include the use of monitoring methods to prevent third party access to confidential information and certain software, such as the underlying source code, as well as systems, practices and procedures designed to prevent unauthorized third party access to such information and software. While the Corporation has confidence in these individuals, organizations and systems, the Corporation’s security measures may be breached, and legal recourse may not provide adequate remedies for any such breach.

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The Corporation’s active intellectual property portfolio contains, among other rights, approximately 80 issued patents, 135 patent applications, 610 registered trademarks, 245 trademark applications and 22 industrial designs. In addition, the Corporation owns in excess of 7,000 domain names, as well as unregistered intellectual property, which includes copyright works, including source codes, software codes, logos, audio-visual elements, graphics, original music, story lines, interfaces, advertisements, films and videos, copyrights and databases (including customer lists), unregistered trademark rights, confidential information and trade secrets. Issued and registered rights (and applications for such rights) are held by the Corporation in numerous jurisdictions around the world, including the United States, Canada, Europe, Russia, certain South American countries, China and certain Australasian countries. The terms and extent of protection afforded under our issued and registered rights vary depending on the date and jurisdiction of filing.

The Corporation’s patent strategy is focused on protecting novel elements of its technology design covering the principal jurisdictions where the Corporation currently carries on business and where we believe filing for such protection is strategically, commercially, technologically or otherwise, appropriate and beneficial. These elements include, among others, core design features, implementation technologies and inventions and developments of games, in each case, where possible. In addition to the issued patents mentioned above, the Corporation has pending patent applications in the United States and certain key commercial foreign countries, such as Canada and in Europe, and files new patent applications as and where it deems appropriate. The actual protection afforded by a patent depends upon the type of patent, the scope of its coverage and the availability of legal remedies in the applicable jurisdiction.

In addition to patent rights, the Corporation has registered trademarks for, among other things, its primary brands, including PokerStars, Full Tilt, and its related live poker tours in more than 40 jurisdictions around the world where the Corporation believes there is a commercial benefit for having such registrations. The Corporation continuously monitors its trademark portfolio and files new registration applications as and when it deems appropriate. To complement the Corporation’s B2B intellectual property, the Corporation has also entered into brand licensing agreements with various third parties such as Paramount Licensing Inc., Playboy Enterprises International Inc., and Warner Bros. Consumer Products Inc. to develop games based on their respective marks, characters and themes. We believe that our use of licensed brand names and related intellectual property contributes to the appeal and success of our products. These licensing agreements are subject to various conditions and typically involve Amaya paying royalties to each licensor on a fixed percentage or unit basis. Licensors also typically have the right to inspect and approve the use of licensed property.

The source code for the Corporation’s software, including the proprietary software embedded in its hardware gaming devices, is protected under trade secret law and confidential information law, as the case may be in a particular jurisdiction, as well as applicable copyright law. The Corporation recognizes, however, that effective protection may be limited or not be available in some countries in which it offers its solutions. The Corporation licenses the use of its software to its customers and resellers for its B2B business and only to end-users for its B2C business, in each case providing additional protection through the use of contractual provisions in the applicable license agreements. In particular, these licenses generally contain, among other restrictions, customary provisions prohibiting the unauthorized reproduction, disclosure, reverse engineering and transfer of the Corporation’s licensed software and related intellectual property. Moreover, any licensing of the Corporation’s intellectual property is on what the Corporation believes to be strict licensing terms, with licenses being non-exclusive and limited in duration and scope.

The Corporation also seeks to protect its copyright works through either or both the registration of such works with applicable governmental authorities (where available and it deems registration strategically beneficial) and reliance on international treaties. The Corporation believes that such protection is adequate for its purposes in the jurisdictions in which it operates, or currently expects to operate in the near term. Similar to its other intellectual property rights, the Corporation continuously monitors its copyright portfolio and updates its policy regarding the registration of copyrights to seek the appropriate protection available under applicable laws.

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In addition to the brand licensing agreements discussed above, the Corporation also enters into various types of licensing agreements related to technology and intellectual property rights. The Corporation enters certain of these agreements to obtain rights that may be necessary to produce and sell its products and services. The Corporation may also license its technology and intellectual property to third parties through various licensing agreements.

Notwithstanding the foregoing, the Corporation may not be successful in obtaining the patents, trademarks, industrial designs and other protections for which it has applied. Our issued patents and registered intellectual property rights and those that may be issued or registered in the future, may be challenged, narrowed, circumvented or found to be invalid or unenforceable, which could limit our ability to stop competitors from marketing related products or services or the length of term of protection that we may have for our products or services. Despite efforts to protect its proprietary rights, third parties may infringe on the Corporation’s intellectual property rights and in such situations the Corporation may be required to defend such rights. The defense of such rights may divert management’s attention to the business and involve a significant expense, and the Corporation may not be successful in defending its rights. In addition, others, including our competitors, may be able to independently develop substantially equivalent intellectual property, and the rights granted to us under any of our issued or registered intellectual property, or future rights, may not provide us with any meaningful competitive advantages against these competitors. See also “Risk Factors and Uncertainties” below.

Regulatory Environment

General

The offering and operation of online real-money gaming platforms and the manufacture, distribution and use of gaming equipment and related software and solutions is subject to extensive regulation and approval by various federal, state, provincial, tribal and foreign agencies (collectively, “gaming authorities”). Gaming laws require us to obtain licenses or findings of suitability from gaming authorities for Amaya, including each of our subsidiaries engaged in these activities, and certain of our directors, officers, employees and in some instances, significant shareholders (typically beneficial owners of more than 5% of a company’s outstanding equity). The criteria used by gaming authorities to make determinations as to qualification and suitability of an applicant varies among jurisdictions, but generally require the submission of detailed personal and financial information followed by a thorough investigation. Gaming authorities have broad discretion in determining whether an applicant qualifies for licensing or should be found suitable. Gaming authorities generally look to the following criteria when determining to grant a license or finding of suitability, including (i) the financial stability, integrity and responsibility of the applicant, (ii) the quality and security of the applicant’s online real-money platform and gaming equipment and related software, as applicable, (iii) the past history of the applicant, and (iv) the effect on competition. Gaming authorities may, subject to certain administrative proceeding requirements, (i) deny an application, or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, and (ii) fine any person licensed, registered or found suitable or approved. Notwithstanding the foregoing, some jurisdictions explicitly prohibit gaming in all or certain forms. The Corporation does not actively market its gaming solutions, products or services that are prohibited in such jurisdictions.

If any director, officer or employee of ours fails to qualify for a license or is found unsuitable (including due to the failure to submit the required documentation) by a gaming authority, we may deem it necessary, or be required to, sever our relationship with such person, which may include terminating the employment of any such person.

Gaming authorities have the right to investigate any individual or entity having a material relationship to, or material involvement with, us or any of our subsidiaries, to determine whether such individual or entity is suitable or should be licensed to do business as a business associate of ours. In addition, certain gaming authorities monitor the activities of the entities they regulate both in their respective jurisdiction and in other jurisdictions to ensure that such entities are in compliance with local standards on a worldwide basis.

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strict compliance with various laws and regulations applicable to us. In addition, there are various other factors associated with gaming operations that could burden our business and operations, including, without limitation, compliance with multiple and sometimes conflicting regulatory requirements, jurisdictional limitations on contract enforcement, foreign currency risks, certain restrictions on gaming activities, potentially adverse tax risks and tax consequences, and changes in the political and economic stability, regulatory and taxation structures and the interpretation thereof in the jurisdictions in which the Corporation and its licensees operate. Any or all of such factors could have a material adverse effect on the Corporation’s business, operating results and financial condition. See also “Risk Factors and Uncertainties”.

Regulation of the B2C Business

Our B2C subsidiaries operate pursuant to licenses granted by gaming authorities in the Isle of Man, Malta, Italy, France, Spain, Greece, Denmark, Germany, United Kingdom, Belgium, Bulgaria and Estonia. Each of these licenses grant us the authority to operate our B2C websites and authorize us to offer and operate online real-money games including, most notably, poker, casino games and betting, including sports betting, in certain permissible jurisdictions. As other jurisdictions enact gaming laws and regulations permitting online gaming, we expect our B2C subsidiaries to seek additional licenses and approvals to operate in those jurisdictions.

As set forth below, the licenses granted to us by the applicable gaming authorities in the Isle of Man and Malta generally permit us to operate and accept customers in various jurisdictions around the world, excluding jurisdictions that have an independent regulatory and licensing scheme that specifically requires licensure in that country. In particular, our subsidiaries that hold Malta licenses use the same to offer services to residents in other European Union member states in compliance with established European Union principles of free movement of services within the European Union. Our other licenses are country-specific and are based on where our subsidiaries are located.

Isle of Man

Under the Online Gambling Regulation Act 2001 (the “OGRA”), the Isle of Man Gambling Supervision Commission (the “IoM Gaming Commission”) maintains responsibility for the regulation and supervision of all online gaming activities in the Isle of Man, and for investigating the character and financial status of any person applying for or holding a license in connection with online gaming. The IoM Gambling Commission is authorized to grant a license to conduct online gaming to a company if the Commission is satisfied: (i) that the company is under the control of persons of integrity; (ii) as to the beneficial ownership of the share capital of the company; (iii) that the activities of the company are under the management of persons of integrity and competence; and (iv) that the company has adequate financial means available to conduct online gaming. Licenses are generally valid for a maximum of five years. The IoM Gambling Commission may revoke a license if the licensee fails, at any time, to meet any of the initial licensure requirements. The IoM Gambling Commission may suspend or revoke a license if the holder of the license or designated official is convicted of certain offenses, or is convicted “by a court in any country or territory in the world of an offense punishable (in that country or territory) in the case of an adult by custody for an unlimited period or a term of two years or more.” The license may also be suspended or revoked for other reasons, including the failure to pay required fees, failure to comply with license conditions or obligations.

Two of our subsidiaries hold licenses issued by the IoM Gambling Commission allowing us to provide poker, casino and betting under the PokerStars and Full Tilt brands, each of which were renewed on March 10, 2014 and expire on March 9, 2019.

Malta

Under the Maltese Lotteries and Other Games Act 2001 and the Remote Gaming Regulations (S.L. 438) (collectively, the “Maltese Regulations”), the Malta Lotteries and Gaming Authority (the “Maltese Authority”) regulates all aspects of gaming in Malta. Pursuant to the Maltese Regulations, any person who operates, promotes, sells, supplies or manages interactive gaming in or from Malta must obtain the appropriate license from the Maltese Authority. The Maltese Authority issues four classes of Remote Gaming Licenses: (i) a Class 1 Remote Gaming

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License which is a remote gaming license; (ii) a Class 2 Remote Gaming License - remote betting office license; (iii) a Class 3 Remote Gaming License - license to promote and/or abet remote gaming from Malta; and (iv) a Class 4 Remote Gaming License - license to host and manage remote gaming operators, excluding the licensee. The above-referenced licenses or an authorized equivalent from a European Economic Area jurisdiction approved by the Maltese Authority are required to operate, promote, sell, or abet internet gaming in or from Malta.

Three of our subsidiaries hold an aggregate of 12 licenses issued by the Maltese Authority, including Class 1, Class 2, Class 3 and Class 4 licenses, which enables such subsidiaries to offer all respective products and services listed above. Absent any renewals or extension under the terms of the governing licensing agreements, the Class 1 licenses are set to expire on dates ranging from December 17, 2018 to February 20, 2020, the Class 2 licenses are set to expire on January 20, 2020, the Class 3 licenses are set to expire on dates ranging from December 22, 2016 to December 10, 2017 and the Class 4 licenses are set to expire on December 22, 2016.

Remote gaming operators are required to pay a gaming tax to the Maltese Authority. The amount of this tax varies depending on the type of license issued and maintained by the operator or software or services supplier.

Estonia

The Estonian Tax and Customs Board maintains responsibility for the issuance of activity licenses and operating permits for gaming and lotteries in Estonia, and also acts as the gaming supervisory agency in Estonia. The Estonia Gambling Act, RT I 2008, 47, 261 (the “Estonia Gambling Act”) was enacted to establish elevated requirements for gaming operators, provide measures for the protection of players, and reduce the negative consequences of gaming and its impact on society. “Remote gambling” under the Estonia Gambling Act is generally defined as the gaming organization of gambling where the outcome of the game is determined by an electronic device, and the player can participate in the game by electronic means of communication, including telephone, internet and media services.

On August 18, 2010, one of our subsidiaries was awarded an activity license which became effective on August 23, 2010. Activity licenses are generally valid for an unspecified period of time. On September 20, 2010, that subsidiary was further awarded an operating permit for the organizing of games of chance in the form of remote gambling concerning one of our domain names. This operating permit is valid from September 20, 2010 through September 20, 2015.

Spain

In Spain, gaming is traditionally regulated by the seventeen autonomous regions within each of the respective territories. Spain’s Gambling Act (the “Spanish Gambling Act”) became effective on May 29, 2011, in order to, among other things, regulate online gaming nationwide. The Spanish Gambling Act covers “gaming operations through electronic, interactive, and technological means” including the internet, television, mobile phones, and land lines. The types of gaming activities controlled under the Spanish Gambling Act include sports betting, horse racing betting, raffles, competitions, and “other games,” which includes poker. The Spanish Gambling Commission is responsible for enforcement of the Spanish Gambling Act and has sanctioning authority.

The Spanish Gambling Act establishes two categories of licenses: general and single, as well as a permit for offering occasional games. A general license is required to offer certain types of betting games, raffles, and games categorized as “other games.” General licenses are valid for a ten year term, and may be renewed for additional ten year periods. The Spanish Gambling Commission offers general licenses through a competitive and public process. The Gambling Act requires applicants to apply for provisional registration in the General Register of Gambling Licenses prior to requesting a call, or public notice of application, for a general license. The Gambling Act grants the Spanish Gambling Commission the authority to restrict the number of licenses awarded for each type of game based on public interest and whether a company requests a call, in each case allowing the Spanish Gambling Commission to control the license review and authorization process. If the number of licenses for a particular type of game is restricted, the licenses offered during that call are not automatically renewable.

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On June 1, 2012, one of our subsidiaries was granted a general license for the development and operation of games in the “Other Games” category and a singular license for the offering of online poker. The same subsidiary is also authorized to conduct the advertising, sponsorship and promotion of the games authorized by the licenses. This general license is valid for a ten year term and the singular license is valid for a five year term. This subsidiary has also been granted singular licenses for Blackjack and Roulette.

Greece

In Greece, the Hellenic Gaming Commission (the “HGC”), in partnership with the Greek Ministry of Finance (the “Greek Ministry”) is responsible for regulating and supervising the online gaming industry. In 2011, the Greek government enacted new legislation relating to all forms of gaming (the “Greek Gambling Act”). Under the Greek Gambling Act, companies that have been licensed by the Greek Ministry through public tenders are authorized to offer online gaming and may partner or otherwise contract with third parties, who do not have licenses issued by the Greek Ministry, to offer online gaming. The Greek Gambling Act also allows for companies that hold licenses in other member states of the European Union to apply for interim temporary licenses, valid until the formal licenses are awarded. The HGC issued twenty-four temporary licenses under the Gambling Act.

In November 2013, the Rational Group partnered with Diamond Link Ltd. (“Diamond Link”) to allow Greek players to utilize our product offerings. Diamond Link is one of the twenty-four temporary license holders in Greece, and through our partnership, two of our websites operate under that authorization.

Denmark

Under the Denmark Gambling Act, the Denmark Gambling Authority (the “DGA”) maintains the licensing procedure for individuals and entities looking to provide betting and online casino services in Denmark. The DGA defines online casino services as “those where the player and operator do not meet physically, for instance where games are sold via the internet, telephone or television.” Online casino games can include roulette, blackjack, baccarat, punto banco, poker and “combination games”. A license to operate online casino services is valid for a term of five years. If the applicant has not yet obtained the required certifications for its gaming system through testing, the DGA will issue a fixed-term one-year license until such certifications are complete.

On December 15, 2011, one of our subsidiaries was awarded a one-year fixed-term license to provide online casino services. The license was effective on January 1, 2012 and expired on December 31, 2012. On December 10, 2012, one of our subsidiaries was then granted a five year license to provide online casino games which expires on December 31, 2016.

Belgium

The Belgium Gaming Commission (the “Belgian Commission”) is responsible for issuing gaming licenses for the operation of games of chance, and ensuring the proper supervision of these games and the implementation of any regulation promulgated under applicable law. Belgian law generally prohibits the operation of a gaming establishment or the offering of gaming in any form, in any place, or in any direct or indirect way, unless a license is granted by the Belgian Commission in accordance with the Belgian law.

Gambling Management S.A., the owner and operator of Casino de Namur in Belgium, was granted a license to operate and offer online gaming through one of our domain names. Casino de Namur partnered with us to offer online gaming in Belgium. On April 20, 2011, one of our subsidiaries was awarded a ten-year Class E gaming license as a service provider to Gambling Management S.A.

France

The Collège De L’Autorité de Régulation des Jeux En Ligne (the “ARJEL”) oversees gaming licensing in France. Act No. 2010-476 of 12 May 2010 authorized online gaming in France for betting on sports, horse races, and

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circle games. Each type of online gaming requires a separate license. Government decrees and orders are also a part of the French regulatory system. The decrees and orders that the Corporation believes are relevant to its business are Decree No. 2010-482 of May 12, 2010, which addresses, among other topics, changes of control, Decree No. 2010-518 from May 19, 2010, which addresses customer accounts, and Order of May 17, 2010, which addresses the licensing process.

On June 25, 2010, one of our subsidiaries was granted a license by ARJEL for online poker games. The license expires on June 25, 2015.

Italy

Currently, L’Amministrazione Autonoma dei Monopoli di Stato (the “AAMS”) regulates gaming in Italy. Since July 2002, the AAMS has been authorized to govern the Italian gaming industry. All operators, both foreign and domestic, are required to obtain a license from the AAMS to provide online gaming services to residents in Italy. Applicants based in the European Economic Area (“EEA”), or those with an EEA passport, are eligible for a license.

On December 17, 2010, a concession to operate, among other things, poker and sports betting in Italy was awarded to one of our subsidiaries. This license was supplemented in March 2011, and expires on June 30, 2016.

United Kingdom

Gaming in the United Kingdom is regulated by the Gaming Act 2005 (the “UK Act”). The UK Act established a gambling commission as the regulator that is responsible for granting licenses to operate as well as overseeing compliance with the UK Act. In 2014, the Gambling (Licensing and Advertising) Act 2014 was passed by Parliament which required all remote gambling operators serving UK customers and advertising in the UK to obtain a license from the UK Gambling Commission.

Since November 1, 2014, one of our subsidiaries has been offering services under a continuation license issued by the UK Gambling Commission and on March 18, 2015 a final license was granted. The Corporation understands that so long as the applicable license fees are paid, it remains compliant with applicable UK licensure requirements and the license is not suspended, revoked or otherwise surrendered, the license will remain valid indefinitely. See “General Development of the Business – Other Announcements”.

Germany

The German state of Schleswig Holstein issued a license to one of our subsidiaries pursuant to a law adopted in 2012 that regulated and licensed online gaming. Although the law has since been repealed, our license will remain valid until December 21, 2018. Under such license, and only until the expiration date, which may not be extended, we may offer poker games and certain casino games only to residents of Schleswig Holstein. We currently expect to begin offering such games by the by the end of the first half of 2015.

Bulgaria

In Bulgaria, the State Commission for Gambling (“Bulgarian Commission”) issues and maintains licenses for “gambling games” including online casino games. A license for organizing online betting must explicitly state the intended gaming activity by the holder, and may not be transferred. Bulgaria requires that the licensee be registered in a European Union member state, another state signatory to the European Economic Area Agreement, or in the Swiss Confederation. The licensee must also appoint an authorized representative with an address in Bulgaria, with the authority to represent the licensee before state authorities or Bulgarian courts.

All bets must be placed and winnings must be paid out only in Bulgarian levs and the Euro, unless the Bulgarian Commission grants preliminary permission to issue wagers and winnings in foreign currencies. The Bulgarian Gambling Act requires that certain communication equipment must be located in Bulgaria for reporting purposes.

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On February 18, 2014, one of our subsidiaries was awarded a license to offer online poker to Bulgarian residents. The license is valid for 10 years.

United States

Generally, intrastate online gaming is lawful in the United States provided the relevant gaming complies with the Unlawful Internet Gambling Enforcement Act (“UIGEA”) and the particular state has enacted legislation or otherwise properly authorized the same. Further, the Federal Wire Act of 1961 (the “Federal Wire Act”) makes it unlawful to use electronic communications to make bets or wagers, or transmit information that assists in making bets or wagers, on any sporting event or contest, over state lines. In December of 2011, the United States Department of Justice (the “DOJ”) issued an opinion from its Office of Legal Counsel indicating that it is the official opinion of the Department of Justice that the Federal Wire Act “prohibits only the transmission of communications related to bets or wagers on sporting events or contests. More specifically, “interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ [. . .] fall outside of the reach of the Wire Act.” Pursuant to this guidance, the legislatures of New Jersey, Nevada and Delaware authorized intrastate online gaming, provided that the gambling does not concern a sporting event or contest. More detail on the regulatory scheme in New Jersey is provided directly below.

New Jersey

The provision of online gaming, and other aspects of casino gaming in New Jersey, are subject to the requirements of New Jersey Casino Control Act (the “NJ Act”) and the regulations promulgated thereunder. The NJ Act created the New Jersey Casino Control Commission (the “NJ CCC”) and the New Jersey Division of Gaming Enforcement (the “NJ DGE”). On February 26, 2013, New Jersey Governor Chris Christie signed a bill into law authorizing online gaming. Under the legislation, online wagering sites can be hosted only by New Jersey’s casino licensees. All primary equipment and data centers used by casino licensees to conduct Internet gaming must be located within a licensed casino facility in Atlantic City, New Jersey. Primary equipment includes all hardware required for player management, funds management and game operation. Eligible patrons must be over 21 years of age and physically present within the State of New Jersey. Upon obtaining an online gaming permit, casino licensees are allowed to offer online versions of all games authorized under the NJ Act, including slot machines, poker, roulette, baccarat, blackjack, craps, big six and other games. New Jersey commenced online gaming operations in November 2013.

Under the online gaming legislation, third party companies may provide services to casino licensees to facilitate the conduct of online gaming, including website hosting, electronic commerce capabilities related to online gaming, and the provision of game content. Such service providers must first obtain a casino service industry enterprise (a “CSIE”) license. The NJ DGE has the responsibility to investigate all license applications and to prosecute violations of the New Jersey Act. The NJ CCC has the authority to decide a CSIE license application when the NJ DGE recommends the denial of a CSIE license application.

A CSIE license application consists of disclosure forms for the applicant, each of its holding companies, and each individual required to be found suitable by the NJ DGE, along with applicable fees. The NJ DGE requires certain individuals affiliated with the CSIE applicant be found suitable by a showing of clear and convincing evidence that, among other things, the individuals are of good character, honesty and financially stable. The persons affiliated with an applicant who must be found qualified by the NJ DGE are certain officers, directors and management employees, all beneficial owners of 5% or more of the applicant, and any other person the NJ DGE deems appropriate. With respect to security holders, the NJ DGE may waive the qualification requirement for “institutional investors”, as defined in the NJ Act, of an applicant if certain investment conditions are met.

Due to the length of investigative time prior to issuing of a plenary CSIE license, the New Jersey regulations allow a CSIE applicant to petition the NJ DGE for a transactional waiver. The transactional waiver allows a CSIE

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applicant to conduct business with a casino licensee if (i) a completed application for the appropriate CSIE license has been filed, (ii) the applicant for the CSIE files a certification from a designee of the CSIE applicant stating that neither the CSIE applicant, nor any of its qualifiers, are disqualified under the New Jersey Casino Control Act, (iii) the applicant shows good cause for granting the petition, and (iv) the CSIE applicant agrees, within 30 business days of transacting business, to supply the NJ DGE, in writing, a detailed explanation of any business transacted with a casino licensee. The granting of a transactional waiver prior to the issuance of a license is at the discretion of the NJ DGE. If granted, the transactional waiver is valid for a period of six months and may be renewed upon petition to the NJ DGE.

The NJ DGE has broad discretion regarding the issuance, suspension or revocation of a CSIE license. The NJ DGE may also impose conditions on a license. In addition, the NJ DGE has the authority to impose fines, suspend, or revoke a license for violations of the NJ Act, including the failure to satisfy the licensure requirements. A CSIE license is effective for five years and will essentially remain effective thereafter unless the license is suspended, expires, or is revoked. The applicant is asked to submit updated information every five years, and is under a continuing duty to keep all information supplied within its license application current. All costs of the license investigation are borne by the CSIE applicant.

In addition to the required licensure, all software related to Internet gaming, Internet content and gaming equipment manufactured, distributed or sold to New Jersey casino licensees is subject to a technical examination and approval by the NJ DGE for, at a minimum, quality, design, integrity, fairness, honesty, suitability and compliance with technical standards. The approval process includes the submission of same to the NJ DGE for testing, examination and analysis and for comparison with documentation of the schematics, game logic, and random number generator and written explanation of the method of operation, odds determination and all other pertinent information. All costs of such testing, examination and analysis are borne by the CSIE applicant.

Prior to a decision by the NJ DGE to approve online gaming activities, it may require a trial period to test the same on a licensed casino licensee’s website. Once approved by the NJ DGE, it may be operated consistently with the version tested by the NJ DGE. Any changes are subject to prior approval by the NJ DGE.

In early 2013, the Oldford Group applied for a casino license with the NJ DGE in connection with the potential acquisition of The Atlantic Club Casino Hotel. However, the potential transaction was terminated in April 2013. Thereafter, the Oldford Group transitioned the casino license application to a CSIE license application for the provision of online gaming services to casino licensees in New Jersey. On December 6, 2013, the NJ DGE advised that the license of Rational Services Limited, a subsidiary of Oldford Group, would be suspended for two years, primarily because of the unresolved federal indictment of Isai Scheinberg and the involvement of certain other individuals in online gaming operations in the United States following the enactment of UIGEA. Notwithstanding, the NJ DGE allowed for the reactivation of the license if Oldford Group were to demonstrate certain “significantly changed circumstances”, a phrase which was not defined in the applicable NJ DGE correspondence.

In connection with the Rational Group Acquisition, Isai Scheinberg ceased his involvement with Oldford Group and its related entities and subsidiaries, and Mark Scheinberg sold his interest in Oldford Group to the Corporation and he, along with certain other executives and members of management, ceased to serve as officers or directors, as applicable. Following this, the Corporation submitted a letter to the NJ DGE on June 16, 2014 requesting the reactivation of the license application. The NJ DGE reactivated the license application and is currently investigating the Corporation with respect to the same.

Regulation of the B2B Business

Our B2B subsidiaries operate pursuant to licenses granted by gaming authorities in several jurisdictions throughout the world, the most significant of which include the United States, Canada, Mexico, Malta and Gibraltar. Each of these licenses grant us the authority to operate our B2B business, including the manufacture, development and distribution of our B2B solutions, products and services. Internationally, the regulatory environment governing our B2B business is complex and varies by jurisdictional. Certain foreign countries permit the importation, sale and operation of gaming solutions, products and services in casino and non-casino environments. Generally, the regulatory environment with respect to our B2B business, for both the Corporation and its solutions, products and services, is subject to a level of scrutiny similar to that of Canada or the United States.

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In certain jurisdictions, before the Corporation can sell a new gaming device as part of its B2B offerings, it must first be homologated and approved by the local gaming control agency or government. The gaming authorities conduct integrity testing of the gaming device and related equipment, and may require a field trial before homologating the gaming device and related software and issuing notice that the governmental authority’s technical standards have been met. The gaming authorities may also require subsequent modifications or integrity testing and approvals. In certain jurisdictions, the product homologation can be performed concurrently with the corporate registration or licensing process, while in others the Corporation must first secure a corporate license prior to initiating the homologation process.

The following is a brief description of the principal regulations that apply to the Corporation and its subsidiaries in the jurisdictions in which it conducts its B2B activities.

United States

Tribal Casinos

Gaming on Native American lands in the United States is regulated by the National Indian Gaming Commission (“NIGC”) and governed by the Indian Gaming Regulatory Act (the “IGRA”), specific tribal ordinances and regulations. Most Tribal authorities, in the exercise of their sovereignty, have also established gaming commissions or agencies that regulate gaming operations on their Tribal lands. The Corporation is required to comply with all such sources of law, which may impose different requirements with respect to licensing, product approvals, and operations.

The IGRA provides a statutory basis for Native American tribes to operate certain gaming activities, depending on how a particular game is classified and whether the laws of the state where the Native American tribe is located allow or prohibit the particular game.

The gaming classifications are Class I, Class II and Class III:

•

Class I gaming include traditional Native American social and ceremonial games and is regulated only by the tribes;

•

Class II gaming includes bingo and certain card games such as poker, so long as the card game is not prohibited by the laws of the state where the tribe is located, the card game is played somewhere in the state and the playing of the card game conforms to any applicable state law; and

•

Class III gaming consists of all forms of gaming that are not Class I or Class II, such as multi gaming terminals, most table games and keno.

Class III gaming on Native American lands is subject to the negotiation of a compact between the tribe and the state in which they plan to operate a gaming facility. These tribal-state compacts typically include provisions entitling the state to receive a portion of the tribe’s gaming revenues and may also impose conditions and requirements on both the Corporation and the Tribal gaming operations.

Amaya must also obtain certification from third party test laboratories prior to the installation of its solutions in certain Tribal jurisdictions, and generally must obtain approval as a gaming supplier with each federally recognized tribe.

Amaya, through its subsidiaries, holds in excess of 100 tribal gaming licenses and registrations in the United States.

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Commercial Casinos

States that allow some form of casino-style gaming usually have extensive regulatory requirements that must be met before products can be marketed to commercial casinos located within the state. Generally, each state’s respective gaming commission requires that a license or finding of suitability be issued with respect to Amaya, its B2B subsidiaries, its products, or any combination thereof, as applicable. While some states require regulatory approval for both Amaya, as an entity, and its products, some states consider such approval simultaneously and others require that the Corporation obtain company approval before considering product approval and certification. If a state requires that the Corporation obtain company approval, Amaya is required to submit detailed financial and operating reports and furnish other information of the Corporation.

Amaya’s officers, directors, certain key employees and any person having a material relationship with Amaya may have to qualify with the state gaming commission and obtain a finding of suitability, as generally described in “Regulatory Environment - General” and “Regulatory Environment - Regulation of the B2C Business - United States” above.

Some states also require that gaming products be placed in the market on a trial basis before receiving final approvals and some states require the licenses and findings of suitability to be renewed on a regular basis.

Amaya and its subsidiaries have licenses, registrations or findings of suitability in more than ten states, including transactional waiver approvals to conduct business with certain New Jersey Casino licensees. The transactional waiver approvals have been extended and are still valid, and these subsidiaries are providing online gaming services in New Jersey, with one subsidiary also provided land-based casino games. See also “Regulatory Environment - Regulation of the B2C Business - United States - New Jersey” above.

Canada

Gaming activities are strictly regulated in Canada under the Criminal Code (the “Criminal Code”) and provincial legislation. The Criminal Code prohibits most gaming activity subject to certain prescribed exemptions. These exemptions include manufacturing of gaming solutions conducted by a duly licensed entity. In order to market products in a given province of Canada, the Corporation must first receive the requisite licenses and registrations from a provincial lottery and gaming commission (each, a “Gaming Commission”).

Each province of Canada in which Amaya markets products has gaming control legislation in force under which that province regulates gaming activities. The gaming control legislation, regulations promulgated thereunder and rules adopted by Gaming Commissions take into account a number of public policy concerns, including: the integrity of gaming; the prevention of unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; the establishment and maintenance of responsible accounting practices and procedures; the maintenance of effective controls over the financial practices of registrants; and the prevention of cheating and fraudulent practices in gaming. Provincial gaming legislation permits the registration of private entities to provide gaming-related services as agents, service providers or service suppliers to provincial Crown corporations to conduct and manage gaming in the relevant province.

Amaya is subject to both general and specific reporting and disclosure requirements to the respective Gaming Commissions. General reporting and disclosure requirements include the obligation to provide Gaming Commissions with information pertaining to financing arrangements and issuances of securities. The Gaming Commissions may conduct investigations or inquire as to the nature and source of financing, including the identity of persons who acquire Amaya’s securities or lend funds to the Corporation. These inquiries are made pursuant to the Gaming Commissions’ general powers of investigation and general authority to conduct investigation or inquiry with respect to any participant in the gaming industry at any level of monetary or shareholder interest.

The gaming regulations also require Amaya to report, disclose and obtain the approval of Gaming Commissions for certain financing arrangements, material loans and leases, acquisitions, dispositions and issuances of securities and changes to directors, officers, associates or interest holders. An “associate or interest holder” may

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include security holders, beneficial interest holders, contingent interest holders, interested parties and suppliers of credit, and goods or services above a certain threshold. Normally, these reporting obligations arise where certain threshold tests of “interest” are met. Notwithstanding there being specific reporting thresholds, a Gaming Commission may at any time exercise its discretion to require reporting by any person who has an interest in the Corporation, regardless of the type of interest.

All of Amaya’s directors, officers, associates and key employees have been or may be required to be found suitable and require registration by the Gaming Commission. An applicant seeking registration must submit detailed personal and financial information to the Gaming Commission, may be subject to an investigation by the Gaming Commission and must pay or cause to be paid all the costs of any such investigation. In Amaya’s experience such investigations have included complete background checks on all key employees, including but not limited to criminal, credit and personal history checks followed by individual interviews with each of these key employees. Additionally, exhaustive forensic historical audits, going back five years, have been performed on Amaya and on the personal finances of each of these key employees. A Gaming Commission may deny an application for registration for any reason which it deems appropriate.

Amaya currently holds gaming licenses and registrations in two provinces, both of which are renewable annually provided certain conditions are met.

Mexico

The Corporation’s land-based solutions are placed in the Mexican market under the jurisdiction of the Secretaría de Gobernación (Ministry of the Interior), a branch of the federal government of Mexico. The entities and individuals who have obtained the necessary permits may only operate gaming equipment that complies with Mexican law and regulations. The Corporation only offers solutions that have successfully passed compliance certification with an approved independent test laboratory.

As of December 31, 2014, the Mexican Congress approved a bill which will allow operators to provide licensed interactive gaming solutions to residents of Mexico. Final regulations have not yet been adopted nor has the formal licensing plan been announced, however Amaya anticipates closely monitoring relevant developments and expects to seek licensure, if eligible, as soon as reasonably possible.

Malta

The vast majority of the Corporation’s interactive B2B gaming operations are based in Malta. Malta is a key interactive gaming hub as a result of adopting a comprehensive interactive gaming policy which hosts many of the industry’s largest operators. For additional information, see “Regulatory Environment — Regulation of the B2C Business — Malta” above.

Gibraltar

Interactive gaming is heavily regulated in Gibraltar by the Gibraltar Gambling Commission, appointed under the provisions of the Gambling Act 2005 (the “Gibraltar Act”) under the supervision of the Ministry for Education, Financial Services, Gaming, Telecommunications and Justice (the “Licensing Authority”). The Gibraltar Act grants the Gambling Commissioner powers to ensure that licensees conduct their operations in accordance with their licenses and in such a manner as to maintain the good reputation of Gibraltar.

Further, the Licensing Authority will only consider licensing blue chip companies with a proven track record in gambling, licensed in a reputable jurisdiction, of good financial standing and with proven experience in gambling services. In addition, the licensee’s operations need to be effectively controlled and managed from Gibraltar. In this regard, a list of key personnel needs to be produced, which includes the CVs and other similar pieces of information. Shareholders, directors and executive managers should be included on this list. As such, licenses are difficult to obtain. See also “Regulatory Environment – General”.

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Regulatory Strategy

As a responsible provider to the regulated gaming industry, Amaya seeks to ensure that its systems and solutions comply with all the regulations and guidelines published by the jurisdictions in which its customers operate. This applies to both its B2C and B2B businesses where such regulation exists. The Corporation partners with regulatory and governmental bodies, and its products, including, without limitation, its games, software engines and random number generators, undergo comprehensive, exhaustive and rigorous testing by independent industry leading internal and third-party testing, accreditation and certification laboratories (including, without limitation GLI, TST (Technical Systems Testing), BMM and eCOGRA Limited) to ensure security, consistency and game integrity. The Corporation seeks to meet or exceed best operational and customer protection practice requirements, each with a particular emphasis on fair and responsible gaming.

Amaya seeks to ensure that it obtains all permits, authorizations, registrations and/or licenses necessary to manufacture and distribute its solutions, products and services in the jurisdictions in which it carries on business globally. Amaya further seeks a zero tolerance approach to money laundering, fraud and collusion and works with regulators and law enforcement globally on such matters. Amaya believes that it has a robust and extensive anti-money laundering policy and framework in effect, and conducts customer due diligence and background investigations while routinely monitoring customer activity (including, without limitation, deposits, cashouts, customer-to-customer transfers and game play), all in accordance with applicable legislation. Amaya also has a dedicated compliance team that works with the Corporation’s employees and various departments to implement routine business activity monitoring and seeks to ensure that the Corporation complies with its regulatory obligations under its licenses, as well as all applicable anti-money laundering, anti-fraud and anti-collusion rules and laws. See also “Technology Infrastructure and Research and Development” for a description of how the Corporation uses its technology infrastructure to assist the implementation of its regulatory strategy.

In order to fulfil its objectives of pursuing opportunities in the manufacturing and marketing of electronic gaming solutions and platforms on a global basis, Amaya intends to undergo the necessary processes to obtain regulatory approval in jurisdictions in which its intends to carry on business (to the extent not already obtained). With respect to online gaming, Amaya intends to seek licensure in all jurisdictions in which licensure is available and strives to be among the first of the licensed operators in newly regulated jurisdictions.

Other Regulatory Considerations

We collect data relating to customer activity, which is subject to the rules relating to the protection of privacy and data that apply in various jurisdictions in which we operate, particularly across Europe. Data protection laws require those collecting data to only use and process such data for lawful uses where the data subject has given consent to the processing and has been provided with certain information as to the use and transferability of the data. Failure to comply with applicable laws on data protection and privacy can give rise to regulatory sanctions, fines and in certain limited cases, criminal liability. As a result, we provide privacy statements and terms and conditions indicating the way in which we use data.

We are also subject to multiple laws and regulations relating to unfair commercial practices, misleading and comparative advertising and unfair terms in consumer contracts.

Responsible Gaming

Amaya is dedicated to responsible gaming practices and seeks to provide its customers with the resources and services they need to play responsibly. These practices, resources and services include deposit limits, table and game play limits, voluntary restrictions on access and use of certain games, self-exclusion and cooling off periods, and voluntary permanent exclusions from our services, sites and applications. Amaya has also partnered with various responsible gaming organizations around the world that conduct research, education and direct counselling for players. These organizations include GameCare and Responsible Gaming Trust in the United Kingdom, Adictel in France, Tactus in the Netherlands, FEJAR in Spain, the National Council of Problem Gambling in the United States, Responsible Gaming Council in Canada and GamblingTherapy.org worldwide.

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Human Resources

As of the date hereof, the Corporation has approximately 2,475 full-time employees of which approximately 1,340 are located in Europe, approximately 215 are located in Canada, approximately 495 are located in the United States, approximately 285 are located in Latin America and the Caribbean (notably Mexico), and approximately 140 are located in Australasia. These employees provide services in either general and administration, marketing, operations, including customer support and services, or information technology and research and development capacities, with operations comprising the largest department. The significant increase in the number of employees from December 31, 2013 through December 31, 2014 is primarily the result of the Rational Group Acquisition, which added a total of approximately 1,700 employees. Although certain of our employees in Italy, France and Australia may be party to collective bargaining or related agreements and certain of our employees in the European Union may be represented by labour unions, to our knowledge, the vast majority of our employees are not. However, the Corporation has never experienced any employment-related work stoppages and believes its relationship with its employees is very good. The Corporation has a policy of entering into confidentiality and non-disclosure agreements with its employees and limiting access to and dissemination of its proprietary technology and confidential information. In addition, the Corporation has adopted a Disclosure, Confidentiality and Insider Trading Policy designed to promote good governance, transparency and effective communication between employees, management and the public, as well as an Anti-Bribery & Anti-Corruption Policy to provide rules and guidelines regarding compliance with Canada’s Corruption of Foreign Public Officials Act, the U.S. Foreign Corrupt Practices Act, and any local anti-bribery or anti-corruption laws that may be applicable, and to evidence Amaya’s commitment to full compliance, including compliance by its officers, directors, employees and agents, therewith.

Specialized Skill and Knowledge

The development, design, marketing and distribution of the Corporation’s gaming solutions, products and services require specialized skills and knowledge particularly in the areas of software architecture, development, conceptualization, and graphic design as well as in the poker, casino and sports betting verticals. Amaya has personnel with the required specialized skills and knowledge to carry out its operations. While the current labour market in the industry is highly competitive, the Corporation expects to, but there can be no assurance that it will, attract and maintain appropriately qualified employees for fiscal 2015. If we fail to attract and maintain appropriately qualified employees, our business, financial condition and operating results could be materially adversely affected.

Facilities

The Corporation’s headquarters are located in Pointe-Claire, Québec, Canada. The Corporation’s research and development, manufacturing, assembly, services and support, and administration departments operate from the Corporation’s headquarters. These premises are leased and consist of approximately 28,000 square feet of rentable space, with a lease term that expires on October 31, 2018.

Rational Group’s general and administrative, marketing and information technology departments, including its research and development, operate from its headquarters in Douglas, Isle of Man. Rational Group’s headquarters consist of approximately 65,000 square feet of office space and are owned by Amaya.

The Corporation also maintains approximately 15 other offices, in leased premises, in Toronto, Calgary, London, Dublin, Stockholm, Atlanta, Miami, Mexico, Malta, Paris, Sydney, Moscow and San Jose (Costa Rica) and elsewhere internationally.

Amaya believes that its facilities are suitable and adequate for its current needs.

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GENERAL DEVELOPMENT OF THE BUSINESS

Amaya was incorporated in 2004 and completed its IPO on the TSX, Venture Exchange in July, 2010. Immediately following its IPO, the Corporation’s revenues were generated primarily through technology it had developed internally, notably Mosino and its short message service, or “SMS”, based mobile lottery solution. In early 2011, the Corporation announced plans to further strengthen its market position and facilitate its anticipated growth through acquisitions. In this regard, Amaya began to selectively assess acquisition opportunities based on the jurisdiction of the target company, the core technology synergies between the target company and Amaya, and the extent to which the target company had a complementary customer base. Since that time, Amaya completed multiple strategic acquisitions that have significantly expanded its diversified gaming and interactive entertainment solutions, products and services, which deliver distribution channel capability and expanded market reach. The Corporation believes that the increased scope and scale of its gaming and interactive entertainment solutions, products and services following such acquisitions have also shifted its focus from emerging markets to significantly larger markets, including the United States and Europe, where its acquired companies have established operations and customer relationships. More recently, the Rational Group Acquisition completed in August 2014 significantly expanded Amaya’s operations into the B2C business and has made it the world’s largest publicly-traded online gaming company. These acquisitions are detailed below within the section “Key Completed Transactions”. The Corporation believes that these acquisitions, along with certain divestitures, financings and capital markets activities, corporate initiatives, and other announcements, each as also described below, have been the primary influence on the general development of Amaya’s business during the last three completed financial years.

Key Completed Transactions

Acquisitions

CryptoLogic Ltd.

On July 30, 2012, after previously taking control of CryptoLogic’s board of directors and purchasing 80.79% of its issued and outstanding share capital, Amaya acquired all of the remaining issued and outstanding share capital of then-publicly-traded (London Stock Exchange (“LSE”), NASDAQ Stock Market (“NASDAQ”) and Toronto Stock Exchange (“TSX”)) CryptoLogic, a leading developer and supplier of Internet gaming software and known in the industry as a pioneer of online casino, at a valuation of approximately US$35.8 million, thereby taking CryptoLogic private. With rights to more than 300 games, CryptoLogic had one of the most comprehensive online casino suites in the world, with award-winning games featuring branded content, including popular action and entertainment characters. CryptoLogic also provided software licensing, e-cash management and customer support services for its online gambling software to an international client base, including many top online gaming brands. Along with its business-to-business solutions, CryptoLogic operated an online casino under various brands, including InterCasino, which launched in 1996 as one of the world’s first online casinos. Shares of CryptoLogic were delisted from the LSE, NASDAQ and TSX. The Corporation filed a business acquisition report on the System for Electronic Document Analysis and Retrieval (“SEDAR”) on June 13, 2012 in connection with the acquisition, which was a “significant acquisition” within the meaning of applicable Canadian securities laws.

Ongame Network Ltd.

In November 2012, Amaya completed the purchase of Ongame, a provider of poker software and network solutions, from Bwin.Party Digital Entertainment plc, for approximately €25 million on a cash-free and debt-free basis, which included contingent consideration of up to €10.0 million payable by Amaya in the event online gaming became regulated in the United States within five years of the acquisition. The exact amount of the contingent consideration depended upon the extent of U.S. regulation of online gaming, including the number of states that chose to regulate it and the total population living in those regulated states. Amaya subsequently sold Ongame in November 2014 to NYX Gaming Group prior to any contingent consideration being paid. Details on this divestiture are described below under the heading “Divestitures”.

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Cadillac Jack Inc.

Also in November 2012, Amaya completed the purchase of Cadillac Jack for an aggregate consideration of approximately $177.0 million, which consideration was used to purchase all of the issued and outstanding equity of Cadillac Jack, retire its debt, pay transaction costs and fund working capital. Amaya financed the transaction through a combination of cash on hand and a $110.0 million non-convertible senior secured term loan secured by Cadillac Jack’s assets (the “2012 Loan”). Cadillac Jack designs and manufactures a portfolio of physical gaming machines, including video reel slots, wide area and multi-level progressives and Latin style bingo games. It also develops content and technologies specific to the needs of each of the markets it serves, including the tribal, commercial and charitable gaming markets in the United States and the gaming market in Mexico. Cadillac Jack’s gaming machines feature proprietary games from a library of more than 100 game titles, with new titles developed on a continuous basis and which are available in multiple configurations. The Corporation filed a business acquisition report on SEDAR on November 5, 2012 in connection with the acquisition, which was a “significant acquisition” within the meaning of applicable Canadian securities laws.

Diamond Game Enterprises

In February 2014, Amaya completed its acquisition of all the issued and outstanding equity of Diamond Game for approximately US$25.0 million, subject to customary post-closing purchase price adjustments, which included the retirement of Diamond Game’s then-outstanding debt. Amaya paid approximately US$18.0 million at closing with cash on hand and, per the terms of the definitive purchase agreement, held back approximately US$7.0 million in escrow for certain contingent liabilities and other items. Diamond Game is a designer and manufacturer of gaming related products for the global land-based casino gaming and lottery industries. Diamond Game has two primary business units: (i) casino products, which develops products for the video lottery terminal, Class II, Class III, commercial casino and racetrack markets; and (ii) lottery products, which creates and manufactures products for the land-based public gaming and charity markets, including its LT-3 instant ticket vending machine (“ITVM”), which dispenses pull tab or break open or scratch tickets while simultaneously displaying the results of each ticket on a touchscreen video monitor in an entertaining fashion. Diamond Game’s development of ITVMs with video display has resulted in the issuance of numerous product patents in Canada and the United States. The LT-3 ITVM is designed for “stay and play” use, which is intended to create longer play sessions and higher sales volumes, and enable lotteries to expand their existing retailer base into venues where traditional slot machines may not be permitted, such as bingo halls, social clubs, veterans offices, bars and taverns. The LT-3 ITVM can be customized to serve varying market needs, including through the offering of different cabinet, display and ticket types, as well other customizable features.

Rational Group

In August 2014, Amaya expanded its operations into the B2C business by completing the purchase of all the issued and outstanding equity of the Rational Group in an all-cash transaction for a purchase price of approximately US$4.9 billion, including certain deferred payments payable within 30 months of the closing of the transaction. The purchase price of the transaction was financed through a combination of debt financing, equity financing and cash on hand. For a detailed description of the financing used for the purchase price, see the disclosure below under the heading “General Development of the Business – Financings and Capital Market Activities”. Rational Group is based in the Isle of Man and operates globally, owning and operating gaming and related businesses offered under several owned brands, including, among others, PokerStars, Full Tilt, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in major global casinos and poker programming created for television and online audiences. See also “Business of the Corporation — B2C” above. The Corporation filed a business acquisition report on SEDAR on October 15, 2014 in connection with the acquisition, which was a “significant acquisition” within the meaning of applicable Canadian securities laws (the “Rational Group Acquisition BAR”). The Rational Group Acquisition BAR is incorporated by reference into this annual information form and is available on SEDAR at www.sedar.com.

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Divestitures

WagerLogic Malta Holdings Ltd.

In February 2014, one of Amaya’s subsidiaries completed the sale of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“WagerLogic”) to Goldstar Acquisitionco Inc. (“Goldstar”) for approximately $70.0 million (the “Purchase Price”), less a closing working capital adjustment of approximately $7.5 million and subject to further customary post-closing adjustments, satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10.0 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting on the second anniversary of the closing date and maturing on the fourth anniversary of the closing date. WagerLogic, through a wholly owned subsidiary, operates an online casino through its “Inter” brand, which includes InterCasino, InterPoker and InterBingo, among other names (the “InterCasino Business”). Amaya acquired the InterCasino Business through its acquisition of CryptoLogic in July 2012. The share purchase agreement for this divestiture also provides for a bonus payment of US$10.0 million to be paid by Goldstar to Amaya if CryptoLogic Operations Limited (“Cryptologic Operations”) achieves an annual net revenue target of at least US$30.0 million during the second year following the closing date (payable in 12 monthly installments during the third year following the closing date), and an additional bonus payment of US$10.0 million if CryptoLogic Operations achieves an annual net revenue target of at least US$40.0 million during the third year following the closing date (payable in 12 monthly installments during the fourth year following the closing date).

Amaya continues to license online casino games to Wagerlogic for the InterCasino Business. Amaya and certain of its subsidiaries have entered into a revenue guarantee agreement under which they jointly and severally guarantee the financial obligations of such subsidiaries under the service agreements, including an obligation to pay CryptoLogic Operations, during the two years following the closing date of the divestiture, an amount equal to the shortfall between CryptoLogic Operation’s quarterly net revenue and a pre-established quarterly net revenue target of US$4.75 million.

As of December 31, 2014, Amaya also beneficially owned and controlled common shares (the “Intertain Common Shares”) of WagerLogic’s parent company, The Intertain Group Ltd. (TSX: IT) (“Intertain”) (the outstanding securities of Goldstar were exchanged for securities of Intertain in February 2014), representing less than 10% of the issued and outstanding Intertain Common Shares at that date. The Intertain Common Shares were issued to Amaya in exchange for Goldstar shares then held by Amaya. Further, Amaya completed the purchase of additional Intertain Common Shares in early 2014. As of December 31, 2014, Amaya also owned $3.85 million aggregate principal amount of 5.0% unsecured subordinate convertible debentures of Intertain maturing on December 31, 2018 (TSX: IT.DB), which are convertible at the holder’s option into Intertain Common Shares at a price of $6.00 per share (each, an “Intertain Debenture”), as well as 353,000 Intertain Common Share purchase warrants, with each whole warrant being exercisable by Amaya for one Intertain Common Share at an exercise price of $5.00 per share until December 31, 2015 (each, an “Intertain Warrant”). As at the date of this annual information form, the Corporation holds 2,253,000 Intertain Common Shares (following the exercise in full by the Corporation of the Intertain Warrants), 3,850 Intertain Debentures and no Intertain Warrants.

Ongame Network Ltd.

In November 2014, pursuant to a sale and transfer agreement (the “Sale and Transfer Agreement”), Amaya sold Ongame to NYX Gaming (Gibraltar) Limited, a wholly-owned subsidiary of NYX Gaming Group, for a purchase price equal to the sum of (i) US$1.00 (paid at the closing), plus (ii) an amount equal to eight times Ongame’s earnings before interest, taxes, depreciation and amortization, or EBITDA, for the year ended December 31, 2015, less any required working capital adjustments. The purchase price is only payable in 2016 upon determination of such amount based on Ongame’s 2015 year-end EBITDA, as calculated in accordance with the Sale and Transfer Agreement. In connection with this divestiture, Amaya and NYX Gaming Group entered into a strategic investment transaction pursuant to which NYX Gaming Group issued, and Amaya purchased, a $10.0 million unsecured convertible debenture on November 17, 2014 which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. At Amaya’s option, both interest and principal are payable in ordinary shares of NYX Gaming Group at any time prior to the maturity date of November 17, 2016. Amaya subsequently assigned an aggregate of $1.0 million of the unsecured convertible debenture to four individuals.

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Concurrently with the completion of the sale of Ongame, Amaya entered into a right of first offer agreement with NYX Gaming Group (the “Right of First Offer”) pursuant to which Amaya granted NYX Gaming Group a right of first offer to purchase the B2B online casino business operated by each of Cryptologic and Amaya (Alberta) Inc. (collectively, the “Covered Business”). The Right of First Offer expires on December 30, 2015.

In parallel, an indirect affiliate of Amaya, Amaya (International) Ltd. (previously known as Chartwell Games (International) Ltd.) (“Chartwell International”) and NextGen Gaming Pty Ltd., a wholly owned subsidiary of NYX Gaming Group (“NextGen”), entered into a work order (the “Work Order”) pursuant to a certain software master license agreement, dated May 19, 2011 (as amended on December 1, 2013 and as amended from time to time thereafter, the “SMLA”), pursuant to which NextGen supplies computer-based wagering games to Chartwell International. The Work Order provides for the supply of certain Games to Chartwell International and its affiliates subject to a one-year minimum license fee equal to the greater of (i) US$350,000 per month, and (ii) the license fee provided for in the SMLA. The Work Order also provides that, notwithstanding the foregoing, upon the sale of the Covered Business, only the license fee provided under the SMLA would be payable.

Financings and Capital Markets Activities

January 2012 Offering

In January and February 2012, Amaya raised aggregate gross proceeds of approximately $28.8 million through a private placement of special warrants (the “2012 Special Warrants”) completed in two closings, the proceeds of which were held in escrow until the satisfaction of all conditions to the acquisition of CryptoLogic, which occurred on March 28, 2012 (the “January 2012 Offering”). The net proceeds from the January 2012 Offering were used to fund a portion of the all-cash offer for all the remaining issued and outstanding shares of CryptoLogic that Amaya did not already own as of the closing date. On March 27, 2012, Amaya announced that it had obtained a receipt for its final short form prospectus, dated the same day, filed with the securities authorities in the provinces of Alberta, Manitoba, Saskatchewan, Ontario and Québec to qualify the distribution of the 28,750 units of Amaya (each, a “2012 Unit”) issuable upon the deemed exercise of the 2012 Special Warrants. Each 2012 Unit consisted of one convertible debenture (each, a “2012 Convertible Debenture”) and 50 Common Share purchase warrants (each, a “2015 Warrant”). Each 2012 Convertible Debenture carried interest at 10.5% per annum and was convertible, at the holder’s option, into Common Shares at a price of $3.25 per Common Share, which represented a ratio of approximately 308 Common Shares per 2012 Convertible Debenture. Each 2015 Warrant entitles its holder to acquire one Common Share at a price of $3.00 per Common Share until April 30, 2015. The 2012 Convertible Debentures and 2015 Warrants were subsequently listed for trading on the TSX Venture Exchange and the 2015 Warrants currently trade on the TSX.

In December 2012, the Board authorized Amaya’s management to assess alternatives with respect to retiring the outstanding 2012 Convertible Debentures. On January 8, 2013, Amaya announced that it would redeem for cash all of its 2012 Convertible Debentures on February 7, 2013 (the “Redemption Date”), in accordance with the redemption rights attached thereto. As of the Redemption Date, all 2012 Convertible Debenture holders had converted their 2012 Convertible Debentures into Common Shares in accordance with the terms thereof.

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June 2012 Offering

In July 2012, Amaya completed the final closing of a private placement of Common Shares at a price of $4.05 per Common Share, first announced on May 29, 2012 and primarily conducted in June 2012 (the “June 2012 Offering”). Gross proceeds raised in the June 2012 Offering including proceeds raised under the first closing, were approximately $107.4 million. The net proceeds from the June 2012 Offering were used to help implement Amaya’s growth strategy and for working capital and general corporate purposes.

February 2013 Offering

In February 2013, Amaya closed a private placement of units (the “February 2013 Units”), originally announced on January 17, 2013, at a price of $1,000.00 per unit, for aggregate gross proceeds of $30.0 million, including gross proceeds of $10.0 million following the exercise in full by the underwriters of the offering of an over-allotment option (the “February 2013 Offering”). The net proceeds of the February 2013 Offering were used for Amaya’s working capital and general corporate purposes. Each February 2013 Unit consisted of: (i) $1,000.00 principal amount of unsecured non-convertible subordinated debentures (the “2013 Debentures”); and (ii) 48 Common Share purchase warrants (each a “2016 Warrant”). The 2013 Debentures bear interest at a rate of 7.50% per annum, payable semi-annually in arrears on January 31 and July 31 in each year commencing on July 31, 2013. Interest payments are payable in cash and the 2013 Debentures have a maturity date of January 31, 2016. Each 2016 Warrant entitles the holder thereof to acquire one Common Share at a price per Common Share equal to $6.25 at any time until January 31, 2016.

June 2013 Offering and TSX Graduation

In July 2013, Amaya closed a private placement of Common Shares, originally announced on June 19, 2013, at a price of $6.25 per Common Share, for total gross proceeds of approximately $40.0 million (the “June 2013 Offering”). The net proceeds from the June 2013 Offering were used for working capital and general corporate purposes to assist in the implementation of Amaya’s growth strategy and the expansion of its international activities.

On September 30, 2013, Amaya announced that it had received final approval from the TSX to graduate from the TSX Venture Exchange and list its Common Shares, 2015 Warrants, 2016 Warrants, and 2013 Debentures (collectively, the “Securities”) on the TSX. The Securities commenced trading on the TSX effective October 1, 2013. The Common Shares trade on the TSX under the symbol “AYA”, the 2015 Warrants under the symbol “AYA.WT”, the 2013 Debentures under the symbol “AYA.DB.A” and the 2016 Warrants under the symbol “AYA.WT.A”. On September 22, 2014, Amaya was added to the S&P/TSX Composite Index.

CJ Credit Facilities and New CJ Facilities

In December 2013, Cadillac Jack, one of Amaya’s subsidiaries, entered into an agreement for the refinancing of its credit facilities. The refinancing was provided by an entity sub-advised by an affiliate of GSO Capital Partners LP and certain funds or accounts managed or advised by it or its affiliates (collectively, “GSO”). Under this agreement, Cadillac Jack borrowed term loans in an aggregate principal amount of US$160.0 million (collectively, the “CJ Credit Facilities”). The CJ Credit Facilities replaced the existing 2012 Loan that was made available to Amaya to finance the acquisition of Cadillac Jack by Amaya. The CJ Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. The CJ Credit Facilities have a term of five years from the closing date and are secured by the stock of Cadillac Jack and the assets of Cadillac Jack and its subsidiaries. Amaya has provided an unsecured guarantee of the obligations of Cadillac Jack in favor of the lenders under the CJ Credit Facilities.

In May 2014, Amaya amended the CJ Credit Facilities and secured additional financing in the form of a mezzanine loan financed by funds also sub-advised by an affiliate of GSO (the “CJ Mezzanine Facility”). The amendment to the CJ Credit Facilities, among other things, extended the maturity date and provided for the advance of an incremental US$80.0 million term loan to the existing CJ Credit Facilities, with the new aggregate principal amount of US$240.0 million bearing interest at a per annum rate equal to LIBOR plus 8.5% with a 1% LIBOR floor

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(as amended, the “CJ Senior Facility”). Under the CJ Mezzanine Facility, Cadillac Jack borrowed a subordinated term loan in the aggregate principal amount of US$100.0 million, bearing interest at a per annum rate equal to 13%, provided that, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind (by adding the interest to the outstanding principal amount of the loan) in lieu of cash (the CJ Mezzanine Facility, and the CJ Senior Facility, collectively, the “New CJ Facilities”). The CJ Senior Facility will mature over a 5-year term and the CJ Mezzanine Facility will mature over a 6-year term. The CJ Senior Facility is secured by the stock of Cadillac Jack and the assets of Cadillac Jack and its subsidiaries and the CJ Mezzanine Facility is unsecured. Amaya has provided an unsecured guarantee of the obligations under the New CJ Facilities of Cadillac Jack in favor of the lenders. The New CJ Facilities contain customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios. In connection with the CJ Mezzanine Facility, Amaya granted 4,000,000 Common Share purchase warrants to the lenders under the New CJ Facilities, entitling the holders thereof to acquire one Common Share per warrant at a price per Common Share equal to $19.17 at any time up to a period ending ten years after the closing date of the New CJ Facilities (the “CJ Warrants”). The Corporation used the funds from the New CJ Facilities to finance working capital expenses and for general corporate purposes.

The Corporation currently anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the CJ Credit Facilities and New CJ Facilities. There can be no assurance as to if and when the CJ Sale will occur.

Rational Group Acquisition Financing

On August 1, 2014 (the “Rational Group Acquisition Closing Date”), the Corporation acquired Rational Group in an all-cash transaction for a purchase price of approximately US$4.9 billion, including certain deferred payments. The purchase price of the transaction was financed through a combination of debt and equity financing and existing cash on hand.

The debt financing consisted of (i) a US$1.75 billion seven-year first lien term loan priced at LIBOR plus 4.00% and a €200.0 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor, (ii) a US$100.0 million five-year first lien revolving credit facility priced at LIBOR plus 4.00%, none of which was drawn as of the closing of the Rational Group Acquisition, and (iii) an US$800.0 million eight-year second lien term loan priced at LIBOR plus 7.00%, with a 1.00% floor (collectively, the “Rational Group Facilities”). The Rational Group Facilities were fully underwritten by Deutsche Bank AG New York Branch (“Deutsche Bank AG”), Barclays Bank PLC (“Barclays”) and MIHI LLC. The obligations of the lenders under the Rational Group Facilities are several and not joint. Deutsche Bank AG acted as sole administrative agent and as sole collateral agent for the first lien facilities and Barclays acted as sole administrative agent and as sole collateral agent for the second lien facility. Both GSO and BlackRock Financial Management, Inc. and certain funds or accounts managed or advised by it or its affiliates (collectively, “BlackRock”) participated in the debt financing. On March 16, 2015, Amaya announced it had entered into the Swap Agreements (as defined below) that it anticipates will result in lower interest payments on existing debt and mitigate the impact of fluctuations in the Euro to US$ exchange rate. The Swap Agreements allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% to replace the US$ interest payments bearing a minimum floating interest rate of 5.0% related to the US$1.75 billion seven-year first lien term loan secured by Amaya on August 1, 2014. For more details, see “General Development of the Business – Other Announcements”.

The equity financing comprised the issuance, on a private placement basis, of (i) US$1.05 billion of Preferred Shares (the “Preferred Share Financing”), (ii) $640.0 million of subscription receipts (the “Subscription Receipts” and, the offering of the Subscription Receipts, the “Subscription Receipt Offering”) and (ii) US$55.0 million of Common Shares to GSO at a price of $20.00 per Common Share. In connection with the transaction, as payment for a portion of the fees payable to GSO and BlackRock and consideration for their significant roles in the financing of the transaction, the Corporation also granted 11,000,000 Common Share purchase warrants to GSO (the “GSO Warrants”) and 1,750,000 Common Share purchase warrants to BlackRock (the “BlackRock Warrants”), each with an exercise price of $0.01 and exercisable for a term of ten years.

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In connection with the Preferred Share Financing, Amaya entered into an agreement with Canaccord Genuity Corp. (“Canaccord Genuity”) pursuant to which Canaccord Genuity purchased from treasury, on an underwritten bought-deal, private placement basis, approximately US$179.2 million of Preferred Shares (the “Bought Deal Component”). The Corporation also entered into separate subscription agreements with each of GSO and BlackRock pursuant to which (i) GSO purchased US$600.0 million of Preferred Shares, and (ii) BlackRock purchased approximately US$270.8 million of Preferred Shares. The Preferred Shares are not listed on any exchange but, subject to certain limitations and restrictions, are freely transferable at the option of the holder. Each Preferred Share has an initial principal amount of $1,000.00 and is convertible, at the holder’s option, initially into approximately 41.67 Common Shares based on a conversion price of $24.00 per Common Share, in each case, subject to adjustments (including 6% accretion to the Conversion Ratio) and compounded semi-annually. The Corporation may, at any time after the first three years of the issuance date, give notice of its election to cause all of its outstanding Preferred Shares to be automatically converted, subject to certain conditions. The Preferred Share Financing closed on the Rational Group Acquisition Closing Date. The terms of the Preferred Shares are set forth below under the heading “Description of Capital Structure – Preferred Shares”.

The Subscription Receipt Offering was completed on a bought-deal, fully underwritten, private-placement basis pursuant to an underwriting agreement entered into among Amaya and a syndicate of underwriters led by Canaccord Genuity, Cormark Securities Inc. (“Cormark”) and Desjardins Capital Markets (“Desjardins”, and together with Canaccord Genuity, Cormark and the remaining members of the syndicate, the “Underwriters”). Under the terms of the underwriting agreement, the Underwriters purchased 32,000,000 Subscription Receipts at a price of $20.00 per Subscription Receipt, for aggregate gross proceeds to Amaya of $640.0 million. The Subscription Receipt Offering closed on July 7, 2014 and the Subscription Receipts converted into Common Shares on a one-to-one basis upon the completion of the Rational Group Acquisition. The price per Subscription Receipt represented a premium of approximately 66.4% of the closing price of $12.02 per Common Share on the TSX on June 11, 2014, the last trading day prior to the announcement of the Rational Group Acquisition, and a premium of approximately 108.5% over the 30-day trading day volume-weighted average price of $9.59 per Common Share on the TSX, up to and including June 11, 2014.

Amaya funded approximately US$213.0 million from cash on hand, which included a US$50.0 million deposit made on June 12, 2014, the date of the announcement of the Rational Group Acquisition.

In connection with the Rational Group Acquisition, each of GSO and BlackRock entered into separate registration rights agreements with the Corporation (each, a “Registration Rights Agreement”, and together, the “Registration Rights Agreements”) regarding the qualification for resale of Common Shares and other registrable securities held by GSO or BlackRock (collectively, the “Registrable Securities”) by way of a Canadian shelf prospectus. The Registration Rights Agreements also grant GSO and BlackRock the right to make a written request that the Corporation effect a public underwritten offering and sale of all or part of the Registrable Securities for cash pursuant to a Canadian shelf prospectus, provided that the anticipated aggregate offering price therefor, net of underwriting discounts and commissions, is at least US$50.0 million. In November 2014, the Corporation, GSO and BlackRock agreed to amend the Registration Rights Agreements in order to provide an extension to the time the Corporation has to obtain a final receipt from Canadian securities regulatory authorities in respect of the Canadian shelf prospectus to a date that is no later than 60 days following the date of this annual information form.

Each of GSO and BlackRock also entered into separate voting disenfranchisement agreements with Amaya (each, a “Voting Disenfranchisement Agreement” and together, the “Voting Disenfranchisement Agreements”) under which they agreed that as long as each of them beneficially owns, or has control or direction over, Common Shares issued or issuable upon conversion of the Preferred Shares representing more than 50% of the number of Common Shares that each of them may be deemed to hold on an as-converted basis on the Rational Group Acquisition Closing Date, each of them will not vote more than 50% of such Common Shares in ordinary course shareholder proxy votes for Board composition related matters (provided that GSO and BlackRock are each entitled to vote up to the full amount of such Common Shares if they are voting in favor of Board nominees proposed by Amaya or its senior management). Notwithstanding the foregoing, the Voting Disenfranchisement Agreements provide that each of GSO and BlackRock will not be disenfranchised for any other matters to be presented to shareholders, including, without limitation, approval of mergers and acquisitions, business combinations or amendments to a stock option plan.

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Further details of the Rational Group Acquisition are included in Amaya’s public filings on SEDAR at www.sedar.com, including related press releases, the Corporation’s Management Information Circular, dated June 30, 2014, for the annual and special meeting of shareholders of the Corporation held on July 30, 2014 (the “2014 Management Information Circular”) and the Rational Group Acquisition BAR.

2015 NCIB

On February 13, 2015, Amaya announced that the TSX approved its notice of intention to make a normal course issuer bid (the “2015 NCIB”) to purchase for cancellation up to 6,644,737 Common Shares, representing approximately 5% of Amaya’s issued and outstanding as of January 26, 2015. The Corporation may purchase the Common Shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or by such other means as may be permitted by the TSX rules and policies. The Corporation will determine in its sole discretion from time to time the actual number of Common Shares that it will purchase and the timing of any such purchases. In accordance with the applicable TSX rules, daily purchases under the 2015 NCIB may not exceed 161,724 Common Shares, representing 25% of the average daily trading volume of the Common Shares for the six-month period ending on January 31, 2015, and the Corporation may make, once per calendar week, a block purchase of Common Shares not owned, directly or indirectly, by insiders of Amaya that exceeds the daily repurchase restriction. The 2015 NCIB commenced on February 18, 2015 and will remain in effect until the earlier of February 17, 2016 or the date on which the Corporation has purchased the maximum number of Common Shares permitted under the 2015 NCIB. Amaya is making the 2015 NCIB because it believes that, from time to time, the prevailing market price of its Common Shares may not reflect the underlying value of the Corporation, and that purchasing Common Shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders. As of March 30, 2015, the Corporation has not purchased any Common Shares pursuant to the 2015 NCIB, and has been under its routine quarterly blackout period since the 2015 NCIB period began.

Other Announcements

On February 19, 2014, Amaya announced that its subsidiary Diamond Game had been awarded a 5-year contract with the Maryland Lottery and Gaming Control Agency (the “Maryland Lottery”), with the Maryland Lottery holding a five year renewal option, to provide Veterans’ Organizations (“VOs”) in the state with ITVMs and related services. The contract allows for the placement of up to five ITVMs at each qualified VO meeting hall in Maryland. A total of 146 LT-3s were deployed in VOs across the State of Maryland in 2014, and additional LT-3s are currently on order by the Maryland Lottery for deployment in 2015. Under the contract, Diamond Game receives a firm-fixed percentage of the ITVM proceeds. The contract amount is estimated by the Maryland Lottery at up to US$57.0 million over the original five year term and an additional amount of up to US$60.0 million for the renewal option based upon its projected number of ITVMs placed at VO meeting halls and the projected win for those ITVMs.

On April 1, 2014, Amaya announced that it had entered into a licensing agreement with Fertitta Acquisitions Co, LLC, d/b/a Ultimate Gaming (“Ultimate Gaming”) to provide online casino gaming content to Ultimate Gaming in New Jersey, subject to all applicable jurisdictional licensing requirements and regulatory approvals. Under the agreement, the online gaming website ucasino.com (“Ultimate Casino”), operated by Ultimate Gaming for its licensed gaming partner Trump Taj Mahal Associates, LLC, in New Jersey, will offer a wide selection of Amaya’s proprietary games that are available on its CGS platform. The agreement allows for the potential integration of other gaming websites operated by Ultimate Gaming to CGS in the future. Under the terms of the agreement, Amaya will receive a percentage of the aggregate net revenue generated on its games, as well as a percentage of the aggregate net revenue generated on any third party games passed through CGS.

On April 16, 2014, Amaya announced that Cadillac Jack entered into multiple agreements to ship approximately 1,100 gaming machines to existing and new customers in the United States. The shipments were primarily comprised of outright sales of gaming machines as well as upgrades of existing revenue share-generating gaming machines. The majority of units shipped were Class II machines, with Class III machines being sold to applicable governmental bodies in the States of Oklahoma and California. On that same day, the Corporation announced that it had also received a license to provide its land-based solutions to Class III gaming operations in the State of Wisconsin.

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On May 2, 2014, the Corporation announced that Cadillac Jack had received approval from New Jersey’s Division of Gaming Enforcement to utilize its Genesis DV1 slot machine platform and associated hardware and software, including top performing game titles Fire Wolf, Siberian Siren and Legend of White Buffalo, in the state.

On July 21, 2014, following the announcement of the Rational Group Acquisition, Amaya announced that a selection of its online casino games had been launched on Full Tilt to bolster the site’s expansion into casino gaming. To that end, Amaya and Rational Group entered into a licensing agreement (the “Licensing Agreement”) under which Amaya has integrated its CGS platform, which includes a library of online and mobile casino games including branded content, onto Full Tilt’s platform. The Licensing Agreement is separate from the Rational Group Acquisition. During that same period, Amaya completed the integration of its CGS platform for websites of several other major online casino operators. Amaya also launched new online and mobile casino games for its customers and completed the integration of new games from multiple third-party suppliers onto Amaya’s CGS platform.

On September 17, 2014, the Corporation changed its independent external auditor and the Board appointed Deloitte LLP as successor auditor in replacement of Richter LLP.

On November 21, 2014, PokerStars, announced that it intends to launch sports betting and casino table games globally on PokerStars.com. The first offerings – blackjack and roulette – were rolled out on a market-by-market basis beginning in November 2014 and were completed in the end of 2014, reaching nearly half of PokerStars’ then current player base. Amaya currently expects to expand its online casino game offerings in certain markets beginning in the first half of 2015 to include additional games under the PokerStars brand, including, among other games, slot machines. Additionally, Amaya intends to launch online and mobile versions of a full featured casino on both its PokerStars and Full Tilt casino platforms by the end of 2015.

On March 16, 2015, Amaya announced it had entered into cross currency swap agreements (collectively, the “Swap Agreements”) that it anticipates will result in lower interest payments on existing debt and mitigate the impact of fluctuations in the Euro to US$ exchange rate. The Swap Agreements allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% to replace the US$ interest payments bearing a minimum floating interest rate of 5.0% related to the US$1.75 billion seven-year first lien term loan secured by Amaya on August 1, 2014. The interest and principal payments for the Swap Agreements, which have a stated termination date of five years, will be made at a Euro to US$ foreign exchange rate of 1.1102 on a US$ notional amount of US$1.74125 billion.

On March 20, 2015, Amaya announced that it had received licenses from the UK Gambling Commission for PokerStars and Full Tilt to operate online poker and other gaming within the United Kingdom. Since late 2014, the PokerStars and Full Tilt brands had been operating under temporary continuation licenses.

On March 26, 2015 and March 30, 2015, Amaya announced the Innova Offering and the CJ Sale, respectively.

RISK FACTORS AND UNCERTAINTIES

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. Current and prospective investors should consider carefully the risks and uncertainties described below, in addition to other information contained in this annual information form, as well as our management’s discussion and analysis and consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that could adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose part or all of your investment.

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Risks Related to the Corporation’s Substantial Indebtedness

The Corporation is highly leveraged. As at March 30, 2015, Amaya had approximately US$3.1 billion of outstanding indebtedness, and the Corporation currently estimates that its debt service for the next 12 months at US$240 million, including both required principal and interest payments. The Corporation’s substantial indebtedness could have significant consequences, including:

•

requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on its indebtedness, therefore reducing its ability to use cash flow to fund its operations, capital expenditures and potential future business opportunities;

•

making it more difficult for the Corporation to make payments on its indebtedness, and any failure to comply with the obligations of any of its debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing its indebtedness;

•

limiting its ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

•

reducing the Corporation’s flexibility in planning for, or reacting to, changes in its operations or business;

•

prohibiting the Corporation from making strategic acquisitions, developing new products and product features, introducing new technologies or exploiting business opportunities;

•

placing the Corporation at a competitive disadvantage as compared to its less-highly-leveraged competitors;

•

making the Corporation more vulnerable to downturns in its business or the economy;

•

negatively affecting the Corporation’s ability to renew gaming and other licenses; and

•

exposing the Corporation to the risk of increased interest rates as certain of its borrowings are at variable rates of interest.

Any of the foregoing could have a material adverse effect on the Corporation’s business, financial conditions, results of operations, liquidity and prospects.

Amaya’s secured credit facilities and provisions governing the Preferred Shares contain restrictions that limit its flexibility in operating its business.

Amaya’s secured credit facilities and provisions governing the Preferred Shares, as applicable, contain various provisions that limit Amaya’s ability to, among other things:

•

incur additional indebtedness or issue preferred shares;

•

pay dividends on, redeem or repurchase capital stock, redeem or repurchase subordinated debt or make other restricted payments;

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•

make investments;

•

create liens;

•

sell assets;

•

enter into agreements that restrict dividends or other payments from its restricted subsidiaries to the Corporation;

•

consolidate, merge, sell or otherwise dispose of all or substantially all of the Corporation’ assets;

•

engage in transactions with affiliates;

•

enter into hedging contracts;

•

create unrestricted subsidiaries; and

•

enter into sale and leaseback transactions.

A breach of any of these covenants could result in a default under one or more of these agreements. Upon the occurrence of an event of default under the Corporation’s secured credit facilities, the lenders could elect to declare all amounts outstanding thereunder to be immediately due and payable and terminate all commitments to extend further credit. If the Corporation were unable to repay those amounts, then the lenders under such facility could proceed against the collateral granted to them to secure that indebtedness. If the lenders under the Corporation’s credit facility accelerate the repayment of borrowings, Amaya cannot assure that it will have sufficient assets to repay the amounts outstanding, which could have a material adverse effect on the Corporation’s business, liquidity and results of operation.

Amaya may not be able to generate sufficient cash flows to meet its debt service obligations.

The Corporation’s ability to make scheduled payments on or to refinance its debt obligations and to make distributions to enable it to service its debt obligations depends on its financial and operating performance and the ability to generate cash from its operations. These variables are subject to prevailing economic and competitive conditions and to certain financial, business, legal, regulatory and other factors beyond the Corporation’s control, including fluctuations in interest rates, market liquidity conditions, operating costs and trends in its industry. If the Corporation’s cash flows and capital resources are insufficient to fund its debt service obligations, then it may be forced to reduce or delay activities and capital expenditures, sell assets, seek additional capital, or restructure or refinance its indebtedness. Depending on the capital markets at the time of any such restructuring or refinancing, it is possible that such restructuring or refinancing could be available, if at all, only on unattractive terms, leading to significant increases in debt service costs and interest expenses and could potentially result in additional restrictions on the Corporation’s operations. Any required refinancing or restructuring may not be successful and may not permit the Corporation to meet its scheduled debt service obligations. In such circumstances, the Corporation could face inadequate liquidity and might be required to dispose of material assets or operations to meet debt service and other obligations.

Additionally, if the Corporation were to require additional debt financing, such additional debt could adversely affect, among other things:

•

its ability to expand its business, market its products and make investments and capital expenditures;

•

the cost and availability of funds from commercial lenders and other debt financing sources; and

•

the Corporation’s competitive position relative to its competitors with less debt.

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Any default by the Corporation in timely meeting its debt service obligations would have a material adverse effect on its business, liquidity, operating results and financial condition.

Amaya’s outstanding credit facilities subject it to financial covenants which may limit its flexibility. Amaya is also exposed to the risk of increased interest rates.

The Corporation’s outstanding credit facilities subjects it to a number of financial covenants, including certain maximum leverage ratios. The Corporation’s failure or inability to comply with these covenants will cause an event of default, which, if not cured, could cause the entire outstanding borrowings under the relevant credit facility to become immediately due and payable. The credit facilities also include restrictions that may limit Amaya’s flexibility in planning for, or reacting to, changes in Amaya’s business and the industry.

The indebtedness under some of the Corporation’s senior secured credit facilities accrues interest at variable rates, which exposes the Corporation to interest rate risk. If interest rates increase, then the Corporation’s interest payment obligations under its variable rate indebtedness would increase, requiring that the Corporation use more of its available funds for the payment of debt service. Any increase in interests rates would reduce the Corporation’s cash flow available for, among other things, investment in and expansion of its business; and a significant increase in interest rates could have a material adverse effect on the Corporation’s business, results of operation and financial condition. Although the Corporation entered into the Swap Agreements on March 15, 2015, which it anticipates will result in lower interest payments on existing debt and potentially mitigate the impact of fluctuations in the Euro to US$ exchange rate, there can be no assurance that the anticipated benefits will be realized and as such, the Corporation remains subject to the risk of increased interest rates described herein. See “General Development of the Business – Other Announcements”.

Risks Related to Amaya’s Business

The gaming and interactive entertainment industries are intensely competitive. Amaya faces competition from a growing number of companies and, if Amaya is unable to compete effectively, its business could be negatively impacted.

There is intense competition amongst gaming solution providers. There are a number of established, well-financed companies producing both land-based and online gaming and interactive entertainment products and systems that compete with the products of the Corporation. As some of the Corporation’s competitors have financial resources that are greater than Amaya’s, they may spend more money and time on developing and testing products, undertake more extensive marketing campaigns, adopt more aggressive pricing policies or otherwise develop more commercially successful products than the Corporation, which could impact the Corporation’s ability to win new contracts and renew existing ones. Furthermore, new competitors may enter the Corporation’s key market areas. If the Corporation is unable to obtain significant market presence or if it loses market share to its competitors, the Corporation’s results of operations and future prospects would be materially adversely affected. There are many companies with already established relationships with third parties, including gaming operators, that are able to introduce directly competitive products and have the potential and resources to quickly develop competitive technologies. The Corporation’s success depends on its ability to develop new products and enhance existing products at prices and on terms that are attractive to its customers.

There has also been consolidation among the Corporation’s competitors in the gaming industry. Such consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive pricing models, gain a larger market share of customers, expand product offerings and broaden their geographic scope of operations.

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Amaya’s online offerings are part of new and evolving industries, which presents significant uncertainty and business risks.

The online gaming and interactive entertainment industry, which includes social, casual and mobile gaming and interactive entertainment, is relatively new and continues to evolve. Whether these industries grow and whether Amaya’s online business will ultimately succeed, will be affected by, among other things, developments in social networks, mobile platforms, legal and regulatory developments (such as the passage of new laws or regulations or the extension of existing laws or regulations to online gaming activities), taxation of gaming activities, data privacy laws and regulation and other factors that the Corporation is unable to predict and which are beyond the Corporation’s control. Given the dynamic evolution of these industries, it can be difficult to plan strategically, and it is possible that competitors will be more successful than the Corporation at adapting to change and pursuing business opportunities. Additionally, as the online gaming industry advances, including with respect to regulation, the Corporation may become subject to additional compliance-related costs. Consequently, the Corporation cannot provide assurance that the Corporation’s online and interactive offerings will grow at the rates expected, or be successful in the long term.

Several companies have launched online social casino offerings, and new competitors are likely to continue to emerge, some of which may be operated by social gaming companies with a larger base of existing users, or by casino operators with more experience in operating a casino. If Amaya’s products do not obtain popularity or maintain popularity, or fail to grow in a manner that meets the Corporation’s expectations, Amaya’s results of operations and financial condition could be harmed.

Amaya’s success in the competitive gaming and interactive entertainment industries depends in large part on its ability to develop and manage frequent introductions of innovative products.

The gaming and interactive entertainment industries are characterized by dynamic customer demand and technological advances, including for land-based and online gaming products. As a result, the Corporation must continually introduce and successfully market new themes and technologies in order to remain competitive and effectively stimulate customer demand. The process of developing new products and systems is inherently complex and uncertain. It requires accurate anticipation of changing customer needs and end user preferences as well as emerging technological trends. If the Corporation’s competitors develop new content and technologically innovative products, and Amaya fails to keep pace, its business could be adversely affected. Additionally, the introduction of products embodying new technology and the emergence of new industry standards can render the Corporation’s existing solutions obsolete and unmarketable and can exert price pressures on existing solutions. To remain competitive, the Corporation must invest resources towards its research and development efforts to introduce new and innovative products with dynamic features to attract new customers and retain existing customers. If the Corporation fails to accurately anticipate customer needs and end-user preferences through the development of new products and technologies, it could lose business to its competitors, which would adversely affect the Corporation’s results of operations and financial position.

The Corporation intends to continue investing resources toward its research and development efforts. There is no assurance that its investments in research and development will lead to successful new technologies or timely new products. If a new product does not gain market acceptance, the Corporation’s business could be adversely affected. Most directly, if a product is unsuccessful, the Corporation could incur losses. Additionally, if the Corporation cannot efficiently adapt its processes and infrastructure to meet the needs of its product innovations, its business could be negatively impacted. There is no certainty that the Corporation’s new products will attain market acceptance or that its competitors will not more effectively anticipate or respond to changing customer preferences. In addition, any delays by the Corporation in introducing new products could negatively impact its operating results by providing an opportunity for its competitors to introduce new products and gain market share.

The Corporation cannot give assurance that it will successfully develop new products or enhance and improve its existing products, that new products and enhanced and improved existing products will achieve market acceptance or that the introduction of new products or enhanced existing products by others will not render the Corporation’s products obsolete. Dynamic customer demand and technological advances often demand high levels of research and development expenditures in order to meet accelerated product introductions, and the life cycles of certain products

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may be short, which could adversely affect the Corporation’s operating results. In some cases, the Corporation’s new products and solutions may require long development and testing periods and may not be introduced in a timely manner or may not achieve the broad market acceptance necessary to generate significant revenue. The Corporation’s inability to develop solutions that meet customer needs and compete successfully against competitors’ offerings could have a material adverse effect on the Corporation’s business, financial condition and results of operations.

Amaya’s dependency on customers’ acceptance of its products, and the Corporation’s inability to meet changing consumer preferences may negatively impact Amaya’s business and results of operations.

The demands of the Corporation’s customers, both in its B2B and B2C segments, are continually changing. There is constant pressure to develop and market new content and technologically innovative products. The Corporation’s revenues are dependent on the earning power and life span of its offerings; therefore, the Corporation faces continual pressure to design and deploy new and successful content and online offerings to maintain its revenue and remain competitive. The success of newly introduced technology and products is dependent on customer acceptance, as well as the reliability and performance of the Corporation’s products. In the B2B segment, customers will generally accept a new product only if the Corporation can show that it is likely to produce more revenue and net wins than the Corporation’s existing products and competitors’ products. In the B2C segment, the Corporation’s customers choose between its offerings and those of other online and mobile gaming and interactive entertainment developers and operators on the basis of many factors, including, without limitation, the quality of the customer experience, brand awareness, reputation, security, integrity and access to other distribution channels. If the Corporation’s products do not gain and retain customers’ acceptance, then its business and results of operations may be negatively and adversely affected.

The Corporation’s products are becoming more sophisticated, resulting in additional expenses and the increased potential for loss in the case of an unsuccessful product.

The Corporation’s newer products are generally technologically more sophisticated than its earlier products, and the Corporation must continually refine its development capabilities to meet the needs of its product innovation. If the Corporation cannot adapt its manufacturing and technological infrastructure to meet the needs of its product innovations, if it is unable to make upgrades to its development capacity in a timely manner or if it commits significant resources to upgrades for products that are ultimately unsuccessful, the business of the Corporation could be adversely affected. In addition, because of the sophistication of the Corporation’s newer products and the resources committed to their development, they are generally more expensive to produce. If the increase in the average price of these new products is not proportionate to the increase in development costs, in each case as compared to the Corporation’s prior products or, if the average cost of development does not go down over time, whether by reason of long-term customer acceptance, the Corporation’s ability to find greater efficiencies in the development process as it refines its development capabilities or a general decrease of the cost of the technology, the Corporation’s margins will suffer, which would adversely affect the Corporation’s operating results. Additionally, if one of the Corporation’s new products or platforms is ultimately unsuccessful, the Corporation may not be able to recover its investment in such products or platforms, resulting in losses.

Acquisitions involve risks that could negatively affect the Corporation’s operating results, cash flows and liquidity.

The Corporation has grown significantly in recent years through acquisitions, in particular through the transformative Rational Group Acquisition. Currently, the Corporation anticipates that it may continue to make strategic acquisitions, some of which may be significant; however, the Corporation may not be able to identify suitable acquisition or strategic investment opportunities, or may be unable to obtain any required consent of its lenders and therefore may not be able to complete such acquisitions or strategic investments. The Corporation may pay for acquisitions or strategic investments with its Common Shares or with convertible securities, which may dilute the ownership interests of its shareholders, or it may decide to pursue acquisitions with which the Corporation’s investors may not agree. In addition, acquisitions place significant demands on the Corporation’s operational and financial infrastructure, and, if the Corporation does not manage its growth effectively, its business, liquidity and operating results may be materially adversely affected. Additionally, acquisitions may expose the Corporation to operational challenges and risks, including:

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the ability to profitably manage acquired businesses or successfully integrate the acquired business’ operations, financial reporting and accounting control systems into the Corporation’s business;

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•

the expense of integrating acquired businesses;

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increased indebtedness;

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the ability to fund cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties;

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the availability of funding sufficient to meet increased capital needs;

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diversion of management’s attention; and

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the ability to retain or hire qualified personnel required for expanded operations.

In addition, acquired companies may have liabilities that the Corporation failed, or was unable, to discover in the course of performing due diligence investigations. The Corporation cannot be sure that the indemnification granted to it by sellers of acquired companies will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with businesses or properties the Corporation assumes upon consummation of an acquisition. The Corporation may learn additional information about its acquired businesses that could materially adversely affect it, such as unknown or contingent liabilities, unprofitable products and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on the Corporation’s business. Failure to successfully manage the operational challenges and risks associated with, or resulting from, acquisitions could adversely affect the Corporation’s results of operations, cash flows and liquidity. Borrowings or issuances of convertible debt associated with these acquisitions may also result in higher levels of indebtedness which could impact the Corporation’s ability to service its debt within the scheduled repayment terms.

The Corporation could face considerable business and financial risks in investigating, completing and implementing acquisitions.

Part of the Corporation’s strategy has been and continues to be the pursuit of expansion and acquisition opportunities. The Corporation may incur significant expenses in connection with potential acquisitions, including those related to professional advisors and due diligence efforts; and there is no assurance that the time and resources expended on pursuing a particular acquisition will result in a completed transaction, or that any completed transaction will ultimately be successful. Acquisitions could result in potentially dilutive issuances of equity securities, significant expenditures of cash, the incurrence of debt and contingent liabilities or an increase in amortization expenses. In connection with any acquisitions, the Corporation could face significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations, including acquired assets, operations and personnel. Acquisitions may also provide to be less valuable than the price paid by the Corporation because of, among other things, a failure to realize anticipated benefits such as cost savings and revenue enhancements or because of the assumption of liabilities in an acquisition, including unforeseen or contingent liabilities in excess of the amounts estimated. An acquisition may not produce the revenues, earnings or business synergies the Corporation anticipates for a variety of reasons, including, without limitation: (i) the integration of the operations, financial reporting, internal controls, technologies, products and employees; (ii) potential impairments in acquired assets; (iii) entry into markets or acquisition of products or technologies with which Amaya has limited or no prior experience; (iv) expenses associated with any potential or unknown legal liabilities; and (v) management of worldwide operations and the exploitation of acquired intellectual property or the development, sale or lease of acquired products. In addition, there can be no assurance that acquisition opportunities will be available on acceptable terms or at all or that the Corporation will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions. The Corporation’s ability to succeed in implementing its acquisition strategy will depend significantly on whether management can identify, complete and successfully integrate commercially viable acquisitions. Acquisition transactions may also disrupt Amaya’s ongoing business and distract management from other responsibilities. The risks associated with acquisitions could have a material adverse effect upon the Corporation’s business, financial condition and operating results.

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Lengthy and variable sales cycle for the Corporation’s land-based products makes it difficult to forecast the timing of revenue from its B2B activities.

The sales cycle for the Corporation’s land-based products and services is variable, typically ranging from between a few weeks to several months and in some cases even longer, from the point of initial contact with a potential customer to the actual completion of a sale. It is difficult for the Corporation to forecast the timing of revenue from its activities because its customers typically invest substantial time, money and other resources researching their needs and available competitive alternatives before deciding to purchase the Corporation’s solutions. Typically, the larger the potential sale, the more time, money and other resources will be invested by customers. In addition, the Corporation may rely on its channel partners to sell its products to customers and, therefore, the Corporation’s sales efforts are vulnerable to delays at both the channel partner and the end-customer level. Unfavorable changes in the sales environment during such sales cycles, many of which are outside the control of the Corporation, including, without limitation, changes that could affect the size or timing of the order or even cause it to be cancelled, or that could have a materially adverse effect on the business, operating results and financial condition of the Corporation.

Failure to attract, retain and motivate key employees may adversely affect the Corporation’s ability to compete and the loss of the services of key personnel could have a material adverse effect on Amaya’s business.

The Corporation depends on the services of its executive officers as well as its key technical, sales, marketing and management personnel. The loss of any of these key persons could have a material adverse effect on the Corporation’s business, results of operations and financial condition. The Corporation’s success is also highly dependent on its continuing ability to identify, hire, train, motivate and retain highly qualified technical, sales, marketing and management personnel. Competition for such personnel can be intense, and the Corporation cannot provide assurance that it will be able to attract or retain highly qualified technical, sales, marketing and management personnel in the future. Stock options comprise a significant component of key employee compensation, and if the Corporation’s Common Share price declines, it may be difficult to retain such individuals. Similarly, changes in the Corporation’s share price may hinder the Corporation’s ability to recruit key employees, as they may elect to seek employment with other companies that they believe have better long-term prospects. The Corporation’s inability to attract and retain the necessary technical, sales, marketing and management personnel may adversely affect its future growth and profitability. The Corporation’s retention and recruiting may require significant increases in compensation expense, which would adversely affect the Corporation’s results of operation.

The leadership of Amaya’s chief executive officer, Mr. David Baazov, and other executive officers has been a critical element of the Corporation’s success. The departure, death or disability of Mr. Baazov or other extended or permanent loss of his services, or any negative market or industry perception with respect to him or arising from his loss, could have a material adverse effect on the Corporation’s business. Amaya’s other executive officers and other members of senior management have substantial experience and expertise in Amaya’s business and have made significant contributions to its growth and success. The unexpected loss of services of one or more of these individuals could also adversely affect the Corporation. Amaya is not protected by key man or similar life insurance covering members of senior management, other than with respect to its Chairman and Chief Executive Officer, David Baazov.

The Corporation’s insurance coverage may not be adequate to cover all possible losses it may suffer, and, in the future, its insurance costs may increase significantly or it may be unable to obtain the same level of insurance coverage.

The Corporation may suffer damage to its property due to a casualty loss (such as fire, natural disasters and acts of war or terrorism) that could severely disrupt its business or subject it to claims by third parties who are injured or harmed. Although Amaya maintains insurance that it believes is adequate, that insurance may be inadequate or unavailable to cover all of the risks which the Corporation’s business and assets may be exposed. Should an uninsured loss (including a loss which is less than Amaya’s deductible) or loss in excess of insured limits occur, it could have a significant adverse impact on Amaya’s operations and revenues.

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Amaya generally renews its insurance policies on an annual basis. If the cost of coverage becomes too high, Amaya may need to reduce its policy limits or agree to certain exclusions from its coverage in order to reduce the premiums to an acceptable amount. Among other factors, national security concerns, catastrophic events or any change in the current applicable statutory requirement that insurance carriers offer coverage for certain acts of terrorism could adversely affect available insurance coverage and result in increased premiums on available coverage (which may cause Amaya to elect to reduce its policy limits) and additional exclusions from coverage. Among other potential future adverse changes, in the future Amaya may elect to not, or may be unable to, obtain any coverage for losses due to acts of terrorism.

Contract awards granted by lottery authorities are not necessarily extended and there is no assurance that the Corporation will be granted such contracts in the future.

With respect to the Corporation’s B2B segment, contract awards by lottery authorities are sometimes challenged by unsuccessful bidders, which can result in costly and protracted legal proceedings that can result in delayed implementation or cancellation of the award. Further, there can be no assurance that the Corporation’s current contracts will be extended or that it will be awarded new contracts as a result of competitive bidding processes in the future. The termination, expiration or failure to renew one or more of the Corporation’s contracts could cause it to lose substantial revenues, which could have an adverse effect on the Corporation’s ability to win or renew other contracts or pursue other growth initiatives.

New products may be subject to complex and dynamic revenue recognition standards, which could materially affect the Corporation’s financial results.

As the Corporation introduces new products and as transactions become increasingly complex, additional analysis and judgment is required to account for and recognize revenues in accordance with IFRS. Transactions may include multiple element arrangements, software components, and/or unique new product offerings, and applicable accounting principles or regulatory product approval delays could further change the timing of revenue recognition, which could adversely affect Amaya’s financial results for any given period.

The Corporation’s business is vulnerable to changing economic conditions and to other factors that adversely affect the industries in which it operates.

The demand for entertainment and leisure activities tends to be highly sensitive to changes in consumers’ disposable income, and thus can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond the control of the Corporation. Unfavorable changes in general economic conditions, including recessions, economic slowdown, sustained high levels of unemployment, and increasing fuel or transportation costs, may reduce customers’ disposable income or result in fewer individuals visiting casinos, whether land-based or online, or otherwise engaging in entertainment and leisure activities. As a result, the Corporation cannot ensure that demand for its products or services will remain constant. Continued or renewed adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in many financial markets, increasing interest rates, increasing energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending on leisure activities, such as gambling. Any significant or prolonged decrease in consumer spending on entertainment or leisure activities could reduce the Corporation’s online games, reducing the Corporation’s cash flows and revenues. If the Corporation experiences a significant unexpected decrease in demand for its products, it could incur losses.

Additionally, a general economic decline in the gaming industry and any difficulty or inability of the Corporation’s B2B customers to obtain adequate levels of capital to finance their ongoing operations may reduce their resources available to purchase Amaya’s B2B products and services or affect Amaya’s ability to collect outstanding receivables, which would adversely affect the Corporation’s revenues.

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Changes in ownership of customers or consolidations within the gaming industry may negatively impact pricing and lead to downward pricing pressures which could reduce revenue.

A decline in demand for the Corporation’s products in the gaming industry could adversely affect its business. Demand for the Corporation’s products is driven primarily by the replacement of existing products as well as the expansion of existing online gaming, casinos (online and land-based) and the expansion of new channels of distribution, such as mobile gaming. Because repeat customers form a portion of the Corporation’s sales, its business could be affected if one of its customers is sold to or merges with another entity that utilizes the products and services of one of the Corporation’s competitors or that reduces spending on its products or causes downward pricing measures. Such consolidations could lead to order cancellation or negatively impact pricing and purchasing decisions or results in the removal of some or all of the Corporation’s products. Additionally, consolidation within the online poker market could result in the Corporation facing competition from larger combined entities, which may benefit from greater resources and economies of scale. Also, any fragmentation within the industry creating a number of smaller, independent operators with fewer resources could also adversely affect the Corporation’s business as these operators might cause a further slowdown in the replacement cycle for the Corporation’s products or otherwise adjust the number and frequency of orders they place with the Corporation to save money.

Litigation costs and the outcome of litigation could have a material adverse effect on the Corporation’s business.

From time to time, Amaya may be subject to litigation claims through the ordinary course of its business operations regarding, but not limited to, employment matters, security of consumer and employee personal information, contractual relations with suppliers, marketing and infringement of trademarks and other intellectual property rights. Litigation to defend Amaya against claims by third parties, or to enforce any rights that Amaya may have against third parties, may be necessary, which could result in substantial costs and diversion of Amaya’s resources, causing a material adverse effect on its business, financial condition and results of operations. Although the Corporation is not aware of any current material legal proceedings outstanding, threatened or pending as of the date hereof by or against the Corporation, given the nature of its business, it is, and may from time to time in the future be, party to various, and at times numerous, legal, administrative and regulatory inquiries, investigations, proceedings and claims that arise in the ordinary course of business. Because the outcome of litigation is inherently uncertain, if one or more of such legal matters were to be resolved against the Corporation for amounts in excess of management’s expectations, the Corporation’s results of operations and financial condition could be materially adversely affected. See “Legal Proceedings”.

The Corporation relies on its internal marketing and branding function, as well as its relationship with ambassadors, distributors, service providers and channel partners to promote its products and generate revenue, and the failure to maintain and develop these relationships could adversely affect the business and financial condition of the Corporation.

The Corporation is dependent upon its internal marketing and branding function as well as its ability to establish and develop new relationships and to build on existing relationships with ambassadors, distributors and service providers on which it relies to promote and, at time sell its current and future products and services. The Corporation cannot provide assurance that it will be successful in maintaining or advancing such internal function or relationship. In addition, the Corporation cannot provide assurance that its distributors and service providers will act in a manner that will promote the success of the Corporation’s products and services. Failure by its internal marketing and branding function or channel partners to promote and support the Corporation’s products and services or failure by the Corporation to establish and develop new relationships and to build on existing relationships with ambassadors, distributors and service providers, could adversely affect the Corporation’s business, results of operations and financial condition. Even if the Corporation is successful in maintaining or advancing such internal function or establishing and developing new relationships and in building on existing relationships with distributors or service providers, there is no guarantee that this will result in a growth in revenue.

Moreover, if some of the Corporation’s competitors offer their products and services to distributors on more favorable terms or have more products or services available to meet their needs, there may be pressure on the Corporation to reduce the price of its products or services, failing which the Corporation’s distributors and service providers may stop carrying its products or services or de-emphasize the sale of its products and services in favor of the products and services of competitors.

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Risks Related to International Operations

The risks related to international operations, in particular in countries outside of the United States and Canada, could negatively affect the Corporation’s results.

A significant portion of the Corporation’s operations are conducted in foreign jurisdictions including, but not limited to: Native American Tribal jurisdictions with sovereign immunity, various U.S. states, Malta, and other members of the European Union. For the year ended December 31, 2014, the Corporation derived more than 95% of its revenue from transactions denominated in currencies other than the Canadian dollar, and the Corporation expects that receivables with respect to foreign sales will continue to account for a significant majority of its total accounts and receivables outstanding. As such, the Corporation’s operations may be adversely affected by changes in foreign government policies and legislation or social instability and other factors which are not within the control of the Corporation, including, but not limited to, recessions in foreign economies, expropriation, nationalization and limitation or restriction on repatriation of funds, assets or earnings, longer receivables collection periods and greater difficulty in collecting accounts receivable, changes in consumer tastes and trends, renegotiation or nullification of existing contracts or licenses, changes in gaming policies, regulatory requirements or the personnel administering them, currency fluctuations and devaluations, exchange controls, economic sanctions and royalty and tax increases, risk of terrorist activities, revolution, border disputes, implementation of tariffs and other trade barriers and protectionist practices, taxation policies, including royalty and tax increases and retroactive tax claims, volatility of financial markets and fluctuations in foreign exchange rates, difficulties in the protection of intellectual property particularly in countries with fewer intellectual property protections, the effects that evolving regulations regarding data privacy may have on the Corporation’s online operations, adverse changes in the creditworthiness of parties with whom the Corporation has significant receivables or forward currency exchange contracts, labour disputes and other risks arising out of foreign governmental sovereignty over the areas in which the Corporation’s operations are conducted. The Corporation’s operations may also be adversely affected by social, political and economic instability and by laws and policies of such foreign jurisdictions affecting foreign trade, taxation and investment. If the Corporation’s operations are disrupted and/or the economic integrity of its contracts is threatened for unexpected reasons, its business may be harmed.

The Corporation’s international activities may require protracted negotiations with host governments, national companies and third parties. Foreign government regulations may favor or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. In the event of a dispute arising in connection with the Corporation’s operations in a foreign jurisdiction where it conducts its business, the Corporation may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of the courts of Canada or enforcing Canadian judgments in such other jurisdictions. The Corporation may also be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. Accordingly, the Corporation’s activities in foreign jurisdictions could be substantially affected by factors beyond the Corporation’s control, any of which could have a material adverse effect on it. The Corporation believes that management’s experience to date in commercializing its products and solutions in Europe and the Caribbean may be of assistance in helping to reduce these risks. Some countries in which the Corporation may operate may be considered politically and economically unstable.

Doing business in the industries in which the Corporation operates often requires compliance with numerous and extensive procedures and formalities. These procedures and formalities may result in unexpected or lengthy delays in commencing important business activities. In some cases, failure to follow such formalities or obtain relevant evidence may call into question the validity of the entity or the actions taken. Management of the Corporation is unable to predict the effect of additional corporate and regulatory formalities which may be adopted in the future including whether any such laws or regulations would materially increase Amaya’s cost of doing business or affect its operations in any area.

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Amaya may in the future enter into agreements and conduct activities outside of the jurisdictions where it currently carries on business, which expansion may present challenges and risks that Amaya has not faced in the past, any of which could adversely affect the results of operations and/or financial condition of Amaya.

The Corporation is subject to foreign exchange and currency risks that could adversely affect its operations, and the Corporation’s ability to mitigate its foreign exchange risk through hedging transactions may be limited.

For the year ended December 31, 2014, the Corporation derived in excess of 95% of its revenues in currencies other than the Canadian dollar; however, a substantial portion of the Corporation’s operating expenses are incurred in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar, the Euro and other currencies may have a material adverse effect on the Corporation’s business, financial condition and operating results. The Corporation’s consolidated financial results are affected by foreign currency exchange rate fluctuations. Foreign currency exchange rate exposures arise from current transactions and anticipated transactions denominated in currencies other than Canadian dollars and from the translation of foreign-currency-denominated balance sheet accounts into Canadian dollar-denominated balance sheet accounts. The Corporation is exposed to currency exchange rate fluctuations because portions of its revenue and expenses are denominated in currencies other than the Canadian dollar, particularly the Euro. In particular, uncertainty regarding economic conditions in Europe and the debt crisis affecting certain countries in the European Union pose risk to the stability of the Euro. Exchange rate fluctuations could adversely affect the Corporation’s operating results and cash flows and the value of its assets outside of Canada. If a foreign currency is devalued in a jurisdiction in which the Corporation is paid in such currency, then the Corporation’s customers may be required to pay higher amounts for the Corporation’s products, which they may be unable or unwilling to pay.

While the Corporation may enter into forward currency swaps and other derivative instruments intended to mitigate the foreign currency exchange risk, there can be no assurance the Corporation will do so or that any instruments that the Corporation enters into will successfully mitigate such risk. If the Corporation enters into foreign currency forward or other hedging contracts, the Corporation would be subject to the risk that a counterparty to one or more of these contracts defaults on its performance under the contracts. During an economic downturn, a counterparty’s financial condition may deteriorate rapidly and with little notice, and the Corporation may be unable to take action to protect its exposure. In the event of a counterparty default, the Corporation could lose the benefit of its hedging contract, which may harm its business and financial condition. In the event that one or more of the Corporation’s counterparties becomes insolvent or files for bankruptcy, its ability to eventually recover any benefit lost as a result of that counterparty’s default may be limited by the liquidity of the counterparty. The Corporation expects that it will not be able to hedge all of its exposure to any particular foreign currency, and it may not hedge its exposure at all with respect to certain foreign currencies. Changes in exchange rates and the Corporation’s limited ability or inability to successfully hedge exchange rate risk could have an adverse impact on the Corporation’s liquidity and results of operations. Although the Corporation entered into the Swap Agreements on March 15, 2015, which it anticipates will result in lower interest payments on existing debt and potentially mitigate the impact of fluctuations in the Euro to US$ exchange rate, there can be no assurance that the anticipated benefits will be realized and as such, the Corporation remains subject to foreign exchange and currency risks described herein. See “General Development of the Business – Other Announcements”.

The Corporation is subject to various laws relating to trade, export controls, and foreign corrupt practices, the violation of which could adversely affect its operations, reputation, business, prospects, operating results and financial condition.

The Corporation must comply with all applicable international trade, export and import laws and regulations of Canada, the United States and other countries, and it is subject to export controls and economic sanctions laws and embargoes imposed by the U.S. and Canadian Governments. Changes in trade sanctions laws may restrict the Corporation’s business practices, including cessation of business activities in sanctioned countries or with sanctioned entities. The Corporation is also subject to the U.S. Foreign Corrupt Practices Act, referred to as the FCPA, and other anti-bribery laws that generally prohibit the offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action, or otherwise obtain or retain business.

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The Corporation’s business is heavily regulated and therefore involves significant interaction with public officials, including officials of various governments worldwide. The Corporation has implemented safeguards and policies to discourage practices by its employees and agents that would violate the FCPA and other applicable laws. However, Amaya cannot ensure that its compliance controls, policies, and procedures will in every instance protect the Corporation from acts committed by its employees, agents, contractors, or collaborators that would violate the laws or regulations of the jurisdictions in which Amaya operates.

Violations of these laws and regulations could result in significant fines, criminal sanctions against Amaya, its officers or its employees, requirements to obtain export licenses, disgorgement of profits, cessation of business activities in sanctioned countries, prohibitions on the conduct of its business and its inability to market and sell the Corporation’s products in one or more countries. Additionally, any such violations could materially damage the Corporation’s reputation, brand, international expansion efforts, ability to attract and retain employees and the Corporation’s business, prospects, operating results and financial condition.

Privacy concerns could result in regulatory changes and impose additional costs and liabilities on the Corporation, limit its use of information, and adversely affect its business.

Personal privacy has become a significant issue in the United States, Europe, and many other countries in which the Corporation operates. Many federal, state, and foreign legislatures and government agencies have imposed or are considering imposing restrictions and requirements about the collection, use, and disclosure of personal information obtained from individuals. Changes to laws or regulations affecting privacy could impose additional costs and liability on the Corporation and could limit its use of such information to add value for customers. If the Corporation were required to change its business activities or revise or eliminate services, or to implement burdensome compliance measures, its business and results of operations could be harmed. In addition, the Corporation may be subject to fines, penalties, and potential litigation if it fails to comply with applicable privacy regulations, any of which could adversely affect the Corporation’s business, liquidity and results of operation.

The Corporation’s results of operations could be affected by natural events in the locations in which it operates or where its customers or suppliers operate.

Amaya, its customers, and its suppliers have operations in locations subject to natural occurrences such as severe weather and other geological events, including hurricanes, earthquakes, floods, or tsunamis that could disrupt operations. Any serious disruption at any of Amaya’s facilities or the facilities of its customers or suppliers due to a natural disaster could have a material adverse effect on Amaya’s revenues and increase its costs and expenses. If there is a natural disaster or other serious disruption at any of Amaya’s facilities, it could impair its ability to adequately supply its customers, cause a significant disruption to its operations, cause Amaya to incur significant costs to relocate or re-establish these functions and negatively impact its operating results. While Amaya insures against certain business interruption risks, such insurance may not adequately compensate Amaya for any losses incurred as a result of natural or other disasters. In addition, any natural disaster that results in a prolonged disruption to the operations of Amaya’s customers or suppliers may adversely affect its business, results of operations or financial condition.

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Risks Related to Regulation

The gaming industry is heavily regulated and failure by the Corporation to comply with applicable requirements could be disruptive to its business and could adversely affect its operations.

The gaming industry is subject to extensive scrutiny and regulation at all levels of government, both domestic and foreign, including but not limited to, federal, state, provincial, local, and in some instances, tribal authorities. While the regulatory requirements vary by jurisdiction, most require:

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licenses and/or permits;

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findings of suitability;

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documentation of qualifications, including evidence of financial stability; and

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other required approvals for companies who operate in online gaming or manufacture or distribute gaming equipment and services, including but not limited to approvals for new products.

Any license, permit, approval or finding of suitability may be revoked, suspended or conditioned at any time. The loss of a license in one jurisdiction could trigger the loss of a license or affect the Corporation’s eligibility for a license in another jurisdiction. The Corporation may be unable to obtain or maintain all necessary registrations, licenses, permits or approvals, and could incur fines or experience delays related to the licensing process which could adversely affect its operations. The finding of suitability process may be expensive and time-consuming. The Corporation’s delay or failure to obtain licenses and approvals in any jurisdiction may prevent it from distributing its solutions and generating revenues. A gaming regulatory body may refuse to issue or renew a registration if the Corporation, or one of its directors, officers, employees or associates: (i) is considered to be a detriment to the integrity or lawful conduct or management of gaming, (ii) no longer meets a registration requirement, (iii) has breached or is in breach of a condition of registration or an operational agreement with a regulatory authority, (iv) has made a material misrepresentation, omission or misstatement in an application for registration or in reply to an enquiry by a person conducting an audit, investigation or inspection for a gaming regulatory authority, (v) has been refused a similar registration in another jurisdiction, (vi) has held a similar registration, or license in that province, state or another jurisdiction which has been suspended, revoked or cancelled, or (vii) has been convicted of an offence, inside or outside of Canada and the United States that calls into question the Corporation’s honesty or integrity or the honesty or integrity of one of its directors, officers, employees or associates.

Additionally, the Corporation’s solutions must be approved in most jurisdictions in which they are offered; this process cannot be assured or guaranteed. Obtaining these approvals is a time-consuming process that can be extremely costly. A manufacturer of gaming solutions may pursue corporate regulatory approval with regulators of a particular jurisdiction while it pursues technical regulatory approval for its gaming solutions by that same jurisdiction. It is possible that after incurring significant expenses and dedicating substantial time and effort towards such regulatory approvals, that Amaya may not obtain either of them. If the Corporation fails to obtain the necessary certification, registration, license, approval or finding of suitability in a given jurisdiction, it would likely be prohibited from distributing its solutions in that particular jurisdiction altogether. If the Corporation fails to seek, does not receive, or receives a revocation of a license in a particular jurisdiction for its games and gaming machines, hardware or software, then it cannot sell, service or place on a participation or leased basis or license its products in that jurisdiction and its issued licenses in other jurisdictions may be impacted. Furthermore, some jurisdictions require license holders to obtain government approval before engaging in some transactions, such as business combinations, reorganizations, stock offerings and repurchases. The Corporation may not be able to obtain all necessary registrations, licenses, permits, approvals or findings of suitability in a timely manner, or at all. Delays in regulatory approvals or failure to obtain such approvals may also serve as a barrier to entry to the market for the Corporation’s solutions. If the Corporation is unable to overcome the barriers to entry, it will materially affect its results of operations and future prospects. To the extent new gaming jurisdictions are established or expanded, the Corporation cannot guarantee it will be successful in penetrating such new jurisdictions or expanding its business in line with the growth of existing

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jurisdictions. As the Corporation enters into new markets, it may encounter legal and regulatory challenges that are difficult or impossible to foresee and which could result in an unforeseen adverse impact on planned revenues or costs associated with the new market opportunity. If the Corporation is unable to effectively develop and operate within these new markets, then its business, operating results and financial condition could be impaired. See “Business of the Corporation – Regulatory Environment”. The Corporation’s failure to obtain the necessary regulatory approvals in jurisdictions, whether individually or collectively, would have a material adverse effect on its business.

To expand into new jurisdictions, the Corporation may need to be licensed, obtain approvals of its products and/or seek licensure of its officers, directors, major shareholders, key employees or business partners. Any delays in obtaining or difficulty in maintaining regulatory approvals needed for expansion within existing markets or into new jurisdictions can negatively affect the Corporation’s opportunities for growth or delay its ability to recognize revenue from the sale or installation of products in any such jurisdictions.

The Corporation is subject to regulation affecting Internet gaming which varies from one jurisdiction to another and future legislative and court proceedings pertaining to Internet gaming may have a material impact on the operations and financial results of Amaya.

The Corporation and its licensees are subject to applicable laws in the jurisdictions in which they operate. Some countries have introduced regulations attempting to restrict or prohibit Internet gaming, while others have taken the position that Internet gaming should be regulated and have adopted or are in the process of considering legislation to enable that regulation.

While the U.K. and other European countries such as Malta, Alderney and Gibraltar have currently adopted a regime which permits its licensees to accept wagers from any jurisdiction, other countries, including Canada and the United States have, or are in the process of implementing, regimes which permit only the targeting of the domestic market provided a local license is obtained and local taxes accounted for. Other European territories continue to defend a licensing regime that protects monopoly providers and have combined this with an attempt to outlaw all other supplies.

Future legislative and court decisions may have a material impact on the operations and financial results. There is a risk that governmental authorities may view the Corporation or its licensees as having violated their local laws, despite, particularly with respect to the B2B business, Amaya’s contractual requirement that each of its licensees be licensed to operate an Internet gaming business by the governmental authority of the country in which the gaming servers associated with the licensees’ gaming operations are located. Therefore, there is a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public entities incumbent monopoly providers, or private individuals, could be initiated against the Corporation, its licensees, Internet service providers, credit card processors, advertisers and others involved in the Internet gaming industry. Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon the Corporation or its licensees or other business partners, while diverting the attention of key executives. Such proceedings could have a material adverse effect on the Corporation’s business, revenues, operating results and financial condition as well as impact upon the Corporation’s reputation.

There can be no assurance that legally enforceable prohibiting legislation will not be proposed and passed in jurisdictions relevant or potentially relevant to the Corporation’s business to legislate or regulate various aspects of the Internet or the online gaming industry (or that existing laws in those jurisdictions will not be interpreted negatively). Compliance with any such legislation may have a material adverse effect on the Corporation’s business, financial condition and results of operations, either as a result of the Corporation’s determining that a jurisdiction should be blocked, or because a local license may be costly for the Corporation or its licensees to obtain and/or such licenses may contain other commercially undesirable conditions.

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The Corporation may not be able to capitalize on the expansion of online or other forms of interactive gaming or other trends and changes in the gaming industry, including due to laws and regulations governing these industries.

The Corporation participates in the new and evolving interactive gaming industry through its online, social and mobile products. The Corporation intends to take advantage of the liberalization of online and mobile gaming, both within the U.S. and internationally; however, expansion of online and mobile gaming involves significant risks and uncertainties, including legal, business and financial risks. The success of online and mobile gaming and the Corporation’s interactive products and services may be affected by future developments in social networks, including Facebook, mobile platforms, regulatory developments, data privacy laws and other factors that the Corporation is unable to predict and are beyond its control. Consequently, the Corporation’s future operating results relating to its online gaming products and services are difficult to predict, and Amaya cannot provide assurance that its products and services will grow at expected rates or be successful in the long term.

Additionally, the Corporation’s ability to successfully pursue its interactive gaming strategy depends on the laws and regulations relating to wagering through interactive channels. In the United States, until recently, there was uncertainty as to whether the Federal Wire Act prohibited U.S. states from conducting intrastate lottery transactions via the internet if the transmissions over the internet during the transaction crossed state lines. In late 2011, the Office of Legal Counsel of the U.S. Department of Justice (“DOJ”) issued an opinion to the effect that state lottery ticket sales over the internet to in-state adults do not violate the Federal Wire Act. The opinion provided an impetus for states to authorize forms of interactive lottery or interactive gaming in order to generate additional revenue. However, to the extent states wish to pursue interactive gaming, such states may be required or otherwise deem it advisable to enact enabling legislation or new regulations addressing the sale of lottery tickets or the offering of other forms of gaming through interactive channels, such as the actions taken by Delaware, Nevada and New Jersey to authorize various forms of internet gaming.

Despite the 2011 DOJ opinion, there are still significant forces working to limit or prohibit interactive lottery and gaming in the U.S. On February 4, 2015, Representative Jason Chaffetz introduced the Restoration of America’s Wire Act (“RAWA”) in the U.S. House of Representatives. As proposed, RAWA would revise the Federal Wire Act to ban most forms of online gambling, including sports betting, online poker, online casino games, fantasy sports and other activities. The enactment of online gaming legislation that federalizes significant aspects of the regulation of online gaming and/or limits the forms of online wagering that are permissible could have an adverse impact on the Corporation’s ability to pursue its interactive strategy in the United States.

Internationally, laws relating to online gaming are evolving, particularly in Europe. To varying degrees, a number of European governments have taken steps to change the regulation of online wagering through the implementation of new or revised licensing and taxation regimes, including the possible imposition of sanctions on unlicensed providers. The corporation cannot predict the timing, scope or terms of any such state, federal or foreign laws and regulations, or the extent to which any such laws and regulations will facilitate or hinder its interactive strategy.

The Corporation’s ability to operate in its existing land-based or online jurisdictions or expand in new land-based or online jurisdictions could be adversely affected by new or changing laws or regulations, new interpretations of existing laws or regulations, and difficulties or delays in obtaining or maintaining required licenses or product approvals.

Changes in existing gaming laws or regulations, new interpretations of existing gaming laws or regulations or changes in the manner in which existing laws and regulations are enforced, all with respect to land-based and online gaming activities, may hinder or prevent the Corporation from continuing to operate in those jurisdictions where it currently carries on business, which would harm its operating results and financial condition. Furthermore, gaming regulatory bodies may from time to time amend the various disclosures and reporting requirements. If the Corporation fails to comply with any existing or future disclosure or reporting requirements, the regulators may take action against the Corporation which could ultimately include fines, the conditioning, suspension or revocation of approvals, registrations, permits or licenses and other disciplinary action. It cannot be assured that the Corporation will be able to adequately adjust to such potential changes. Additionally, evolving laws and regulations regarding data privacy, cybersecurity and anti-money laundering could adversely impact opportunities for growth in Amaya’s online business, and could result in additional compliance-related costs.

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Public opinion can also exert a significant influence over the regulation of the gaming industry. A negative shift in the public’s perception of gaming could affect future legislation in different jurisdictions. Among other things, such a shift could cause jurisdictions to abandon proposals to legalize gaming, thereby limiting the number of new jurisdictions into which the Corporation could expand. Negative public perception could also lead to new restrictions on or to the prohibition of gaming in jurisdictions in which the Corporation currently operates.

Potential changes to the Class II regulatory scheme may cause the Corporation to modify its Class II games which may result in the Corporation’s products becoming less competitive.

The Corporation’s Native American tribal customers that operate Class II games under the IGRA are subject to regulation by the NIGC. Any required conversion of games pursuant to changing regulatory schemes could cause a disruption to the Corporation’s business. In addition, the Corporation could lose market share to competitors who offer games that do not appear to comply with published regulatory restrictions on Class II games and therefore offer features not available in the Corporation’s products.

Regulations that may be adopted with respect to the Internet and electronic commerce may decrease the growth in the use of the Internet and lead to the decrease in the demand for Amaya’s products and services.

In addition to regulations pertaining to the gaming industry in general and specifically to online gaming, the Corporation may become subject to any number of laws and regulations that may be adopted with respect to the Internet and electronic commerce. New laws and regulations that address issues such as user privacy, pricing, online content regulation, taxation, advertising, intellectual property, information security, and the characteristics and quality of online products and services may be enacted. As well, current laws, which predate or are incompatible with the Internet and electronic commerce, may be applied and enforced in a manner that restricts the electronic commerce market. The application of such pre-existing laws regulating communications or commerce in the context of the Internet and electronic commerce is uncertain. Moreover, it may take years to determine the extent to which existing laws relating to issues such as intellectual property ownership and infringement, libel and personal privacy are applicable to the Internet. The adoption of new laws or regulations relating to the Internet, or particular applications or interpretations of existing laws, could decrease the growth in the use of the Internet, decrease the demand for Amaya’s products and services, increase Amaya’s cost of doing business or could otherwise have a material adverse effect on Amaya’s business, revenues, operating results and financial condition.

Amaya’s shareholders are subject to extensive governmental regulation and if a shareholder is found unsuitable by a gaming authority, that shareholder would not be able to beneficially own the Corporation’s Common Shares directly or indirectly.

In many jurisdictions, gaming laws can require any of the Corporation’s shareholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities. Gaming authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by the gaming authorities.

Furthermore, any person required by a gaming authority to be found suitable, who is found unsuitable by the gaming authority, may not hold directly or indirectly ownership of any voting security or the beneficial or record ownership of any nonvoting security or any debt security of any public corporation which is registered with the relevant gaming authority beyond the time prescribed by the relevant gaming authority. A violation of the foregoing may constitute a criminal offence. A finding of unsuitability by a particular gaming authority impacts that person’s ability to associate or affiliate with gaming licensees in that particular jurisdiction and could impact the person’s ability to associate or affiliate with gaming licensees in other jurisdictions.

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Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5%, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification or a finding of suitability, subject to limited exceptions for “institutional investors” that hold a company’s voting securities for investment purposes only.

On July 30, 2014 the Corporation’s shareholders approved amendments to the Corporation’s articles to include certain provisions to ensure that the Corporation complies with applicable gaming regulations. These amendments were effected in November 2014 and provide, among other things, that the Corporation shall have the right, subject to the conditions set out in the gaming provisions share terms, to redeem Common Shares held by an unsuitable person. Such redemption rights may negatively affect the trading price of the Common Shares and may negatively affect the liquidity of the Common Shares.

Current environmental laws and regulations, or those enacted in the future, could result in additional liabilities and costs.

The manufacturing of the Corporation’s products may require the use of materials that are subject to a variety of environmental, health and safety laws and regulations (such as climate change legislation). Compliance with these laws could increase Amaya’s costs and impact the availability of components required to manufacture its products. Violation of these laws may subject Amaya to significant fines, penalties or disposal costs, which could negatively impact its results of operations, financial position or cash flows.

Risks Related to the Corporation’s Intellectual Property and Technology

Amaya’s intellectual property may be insufficient to properly safeguard its technology and brands.

The Corporation holds patents, trademarks and other intellectual property rights. The Corporation has also applied for patent protection in the United States, Canada, Europe and other countries relating to certain existing and proposed processes, designs and methods and other product innovations. Patent applications can however take many years to issue and the Corporation can provide no assurance that any of these patents will be issued at all. If the Corporation is denied any or all of these patents, it may not be able to successfully prevent its competitors from imitating its solutions or using some or all of the processes that are the subject of such patent applications. Such imitation may lead to increased competition within the finite market for the Corporation’s solutions. Even if pending patents are issued to the Corporation, its intellectual property rights may not be sufficiently comprehensive to prevent its competitors from developing similar competitive products and technologies. The Corporation’s success may also depend on its ability to obtain trademark protection for the names or symbols under which it markets its products and to obtain copyright protection and patent protection of its proprietary technologies, intellectual property and other game innovations and if the granted patents are challenged, protection may be lost. The Corporation may not be able to build and maintain goodwill in its trademarks or obtain trademark or patent protection, and there can be no assurance that any trademark, copyright or issued patent will provide competitive advantages for Amaya or that Amaya’s intellectual property will not be successfully challenged or circumvented by competitors.

Source codes for Amaya’s technology may also receive protection under international copyright laws. However, for many third parties who intend to use Amaya source codes without Amaya’s consent, the presence of copyright protection in the source codes alone may not be enough of a deterrent to prevent such use. As such, Amaya may need to initiate legal proceedings following such use to obtain orders to prevent further use of the source code.

The Corporation also relies on trade secrets, ideas and proprietary know-how. Although the Corporation generally requires its employees and independent contractors to enter into confidentiality and intellectual property assignment agreements, it cannot be assured that the obligations therein will be maintained and honoured. If these agreements are breached, it is unlikely that the remedies available to the Corporation will be sufficient to compensate it for the damages suffered. In spite of confidentiality agreements and other methods of protecting trade secrets, the Corporation’s proprietary information could become known to or independently developed by competitors. If the Corporation fails to adequately protect its intellectual property and confidential information, its business may be harmed and its liquidity and results of operations may be materially adversely impacted.

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The Corporation may be subject to claims of intellectual property infringement or invalidity and adverse outcomes of litigation could unfavorably affect its operating results.

Monitoring infringement and misappropriation of intellectual property can be difficult and expensive, and the Corporation may not be able to detect infringement or misappropriation of its proprietary rights. Although the Corporation intends to aggressively pursue anyone who is reasonably believed to be infringing upon its intellectual property rights and who poses a significant commercial risk to the business, to protect and enforce its intellectual property rights, initiating and maintaining suits against such third parties will require substantial financial resources. The Corporation may not have the financial resources to bring such suits, and, if it does bring such suits, it may not prevail. Regardless of the Corporation’s success in any such actions, the expenses and management distraction involved may have a material adverse effect on its financial position. A significant portion of the Corporation’s revenues is generated from products using certain intellectual property rights, and Amaya’s operating results would be negatively impacted if it was unsuccessful in licensing certain of those rights and/or protecting those rights from infringement, including losses of proprietary information from breaches of the Corporation’s cybersecurity efforts.

A significant portion of the Corporation’s revenues is generated from products using certain intellectual property rights, and Amaya’s operating results would be negatively impacted if it was unsuccessful in licensing certain of those rights and/or protecting those rights from infringement, including losses of proprietary information from breaches of the Corporation’s cybersecurity efforts.

Further, the Corporation’s competitors have been granted patents protecting various gaming products and solutions features, including systems, methods and designs. If the Corporation’s products and solutions employ these processes, or other subject matter that is claimed under its competitors’ patents, or if other companies obtain patents claiming subject matter that the Corporation uses, those companies may bring infringement actions against it. The question of whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. In addition, because patent applications can take many years to issue, there may be applications now pending of which the Corporation is unaware, which might later result in issued patents that the Corporation’s products and solutions may infringe. There can be no assurance that the Corporation’s products, including those with currently pending patent applications, will not be determined to have infringed upon an existing third party patent. If any of the Corporation’s products and solutions infringes a valid patent, the Corporation may be required to discontinue offering certain products or systems, pay damages, purchase a license to use the intellectual property in question from its owner, or redesign the product in question to avoid infringement. A license may not be available or may require Amaya to pay substantial royalties, which could in turn force Amaya to attempt to redesign the infringing product or to develop alternative technologies at a considerable expense. Additionally, the Corporation may not be successful in any attempt to redesign the infringing product or to develop alternative technologies, which could force the Corporation to withdraw its product or services from the market.

The Corporation may also infringe other intellectual property rights belonging to third parties, such as trademarks, copyrights and confidential information. As with patent litigation, the infringement of trademarks, copyrights and confidential information involve complex legal and factual issues and the Corporation’s products, branding or associated marketing materials may be found to have infringed existing third party rights. When any third party infringement occurs, the Corporation may be required to stop using the infringing intellectual property rights, pay damages and, if it wishes to keep using the third party intellectual property, purchase a license or otherwise redesign the product, branding or associated marketing materials to avoid further infringement. Such a license may not be available or may require Amaya to pay substantial royalties.

It is also possible that the validity of any of Amaya’s intellectual property rights might be challenged either in standalone proceedings or as part of infringement claims. There can be no assurance that Amaya’s intellectual property rights will withstand an invalidity claim and, if declared invalid, the protection afforded to the product, branding or marketing material will be lost.

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Moreover, the future interpretation of intellectual property law regarding the validity of intellectual property by governmental agencies or courts in Canada, Europe, the United States or other jurisdictions in which Amaya has rights could negatively affect the validity or enforceability of the Corporation’s current or future intellectual property. This could have multiple negative impacts including, without limitation, the marketability of, or anticipated revenue from, certain of Amaya’s products. Additionally, due to the differences in foreign patent, trademark, trade dress, copyright and other laws concerning proprietary rights, the Corporation’s intellectual property may not receive the same degree of protection in foreign countries as it would in Canada, Europe or the United States. The Corporation’s failure to possess, obtain or maintain adequate protection of its intellectual property rights for any reason in these jurisdictions could have a material adverse effect on its business, results of operations and financial condition.

Furthermore, infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate, and the Corporation may not have the financial and human resources to defend itself against any infringement suits that may be brought against Amaya. Litigation can also distract management from day-to-day operations of the business.

In addition, the Corporation’s business is dependent in part on the intellectual property of third parties. For example, the Corporation licenses trademarks and other intellectual property from third parties for use in its gaming products. The future success of the Corporation may depend upon its ability to obtain licenses to use new marks and its ability to retain or expand existing licenses for certain products. If the Corporation is unable to obtain new licenses or renew or expand existing licenses, it may be required to discontinue or limit its use of such products that use the licensed marks and its financial condition, operating results or prospects may be harmed.

Compromises of the Corporation’s systems or unauthorized access to confidential information or Amaya’s customers’ personal information could materially harm Amaya’s reputation and business.

Amaya collects and stores confidential, personal information relating to its customers for various business purposes, including marketing and financial purposes, and credit card information for processing payments. For example, the Corporation handles, collects and stores personal information in connection with its online gaming products. The Corporation may share this personal and confidential information with vendors or other third parties in connection with processing of transactions, operating certain aspects of Amaya’s business or for marketing purposes. The Corporation’s collection and use of personal data is governed by federal, state and provincial laws and regulations as well as the applicable laws and regulations in other countries in which it operates. Privacy law is an area that changes often and varies significantly by jurisdiction. Amaya may incur significant costs in order to ensure compliance with the various privacy requirements. In addition, privacy laws and regulations may limit Amaya’s ability to market to its customers.

Amaya assesses and monitors the security of collection, storage and transmission of customer information on an ongoing basis. See “Technology Infrastructure and Research and Development”. Amaya utilizes commercially available software and technologies to monitor, assess and secure its network. However, the systems currently used for transmissions and approval of payment card transactions, and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and controlled by the payment card industry, not Amaya. Although Amaya has taken steps designed to safeguard its customers’ confidential personal information, its network and other systems and those of third parties, such as service providers, could be compromised by a third party breach of Amaya’s system’s security or that of a third party provider or as a result of purposeful or accidental actions of third parties, Amaya’s employees or those employees of a third party. Advances in computer and software capabilities and encryption technology, new tools and other developments may increase the risk of such a breach. As a result of any security breach, customer information or other proprietary data may be accessed or transmitted by or to a third party. Despite these measures, there can be no assurance that Amaya is adequately protecting its customers’ information.

Any loss, disclosure or misappropriation of, or access to, customers’ or other proprietary information or other breach of Amaya’s information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt Amaya’s operations, damage its reputation and expose it to claims from its customers, financial institutions, regulators, payment card associations, employees and other persons, any of which could have an adverse effect on Amaya’s business, revenues, financial conditions and operations.

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Service interruptions of Internet service providers could impair the Corporation’s ability to carry on its business.

Most of the Corporation’s customers and some of the Corporation’s licensees rely on Internet service providers to allow the Corporation’s customers or its licensees’ customers and servers to communicate with each other. If Internet service providers experience service interruptions, communications over the Internet may be interrupted and impair the Corporation’s ability to carry on business. In addition, the Corporation’s ability to process e-commerce transactions depends on bank processing and credit card systems. In order to prepare for system problems, the Corporation continuously seeks to strengthen and enhance its current facilities and the capability of its system infrastructure and support. Nevertheless, any system failure as a result of reliance on third parties, including network, software or hardware failure, which causes a delay or interruption in the Corporation’s online services and products and e-commerce services, could have a material adverse effect on the Corporation’s business, revenues, operating results and financial condition.

There is a risk that the Corporation’s network systems will be unable to meet the growing demand for its online products.

The growth of Internet usage has caused frequent interruptions and delays in processing and transmitting data over the Internet. There can be no assurance that the Internet infrastructure or the Corporation’s own network systems will continue to be able to meet the demand placed on it by the continued growth of the Internet, the overall online gaming and interactive entertainment industry and the Corporation’s customers.

The Internet’s viability as a medium for products and services offered by the Corporation could be affected if the necessary infrastructure is not sufficient, or if other technologies and technological devices eclipse the Internet as a viable channel.

End-users of the Corporation’s products and services depend on Internet service providers, online service providers and the Corporation’s system infrastructure for access to the Corporation’s or its licensees’ products and services. Many of these services have experienced service outages in the past and could experience service outages, delays and other difficulties due to system failures, stability or interruption. The Corporation’s licensees may lose customers as a result of delays or interruption in service, including delays or interruptions relating to high volumes of traffic or technological problems. As a result, the Corporation may not be able to meet service levels that it has contracted for, putting it in breach of contractual commitments, which in turn could materially adversely affect the Corporation’s business, revenues, operating results and financial condition.

Systems, network or telecommunications failures or cyber-attacks may disrupt the Corporation’s business and have an adverse effect on Amaya’s results of operations.

Any disruption in the Corporation’s network or telecommunications services could affect the Corporation’s ability to operate its games and online offerings, which would result in reduced revenues and customer down time. The Corporation’s network and databases of business or customer information, including intellectual property, trade secrets, and other proprietary business information and those of third parties Amaya utilizes, are susceptible to outages due to fire, floods, power loss, break-ins, cyber-attacks, network penetration, data privacy or security breaches, denial of service attacks and similar events, including inadvertent dissemination of information due to increased use of social media. Despite implementation of network security measures and data protection safeguards by Amaya, including a disaster recovery strategy for back office systems, the Corporation’s servers and computer resources are vulnerable to viruses, malicious software, hacking, break-ins or theft, third-party security breaches, employee error or malfeasance, and other potential compromises. Disruptions from unauthorized access to or tampering with the Corporation’s computer systems, or those of third parties Amaya utilizes, in any such event could result in a wide range of negative outcomes, including devaluation of the Corporation’s intellectual property, increased expenditures on data security, and costly litigation, and can have a material adverse effect on the Corporation’s business, revenues, reputation, operating results and financial condition.

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Amaya’s land-based products and online operations may experience losses due to technical problems or fraudulent activities.

The Corporation’s products and solutions are complex and, accordingly, they may contain defects or errors, particularly when first introduced or as new versions are released. The Corporation may not discover such defects or errors until after a product or solution has been released and used by its end-customers. Defects and errors in the Corporation’s products and solutions could materially and adversely affect the Corporation’s reputation, result in significant costs to it, delay planned release dates and impair its ability to sell its products in the future. The costs incurred in correcting any product or solution defects or errors may be substantial and could adversely affect the Corporation’s operating margins. Furthermore, there can be no assurance that the Corporation’s efforts to monitor, develop, modify and implement appropriate test and processes for the Corporation’s products or solutions will be sufficient to permit it to avoid a rate of failure in its products or solutions that results in substantial delays, significant repair or replacement costs or potential damage to its reputation, any of which could have a materially adverse effect on the Corporation’s business, results of operations and financial condition.

The Corporation may also be subject to claims that its products or solutions are defective or that some function or malfunction of its products caused or contributed to damages. The Corporation attempts to minimize this risk by incorporating provisions into its standard agreements that are designed to limit the Corporation’s exposure to potential claims of liability, in addition to maintaining an errors and omissions insurance policy. No assurance can be given that all claims will be barred by the contractual provisions limiting liability or that the provisions will be enforceable. The Corporation may be liable for an unforeseen failure regarding the use of its products or services. A significant liability claim against the Corporation could have a materially adverse effect on its operating results and financial position.

The Corporation’s success depends on its ability to avoid, detect, replicate and correct software and hardware errors and fraudulent manipulation of the Corporation’s gaming machines, systems, and online offerings. The Corporation incorporates security features into the design of its gaming machines and software and other systems which are designed to prevent the Corporation and its customers from being defrauded. However, there can be no guarantee that the Corporation’s security features will continue to be effective in the future. If the Corporation’s security systems fail to prevent fraud, the Corporation’s operating results could be adversely affected. Additionally, if third parties breach the Corporation’s security systems and defraud the Corporation’s customers, the public may lose confidence in the Corporation’s products and online operations and the Corporation could become subject to legal claims by its customers or to investigation by applicable regulatory authorities.

Games, online gaming and gaming machines may also be replaced by land-based or online casinos and other gaming machine operators if they do not perform according to expectations, or may be shut down by regulators. The occurrence of fraudulent manipulation of the Corporation’s games, gaming machines, online gaming software or systems may give rise to claims for lost revenues and related litigation by the Corporation’s customers and may subject the Corporation to investigation or other action by gaming regulatory authorities including suspension or revocation of the Corporation’s gaming licenses, or disciplinary action.

Amaya’s customers may attempt or commit fraud or cheat in order to increase winnings. Acts of fraud or cheating may involve various tactics, possibly in collusion with employees of the Corporation. Internal acts of cheating could also be conducted by employees through collusion with programmers and other personnel. Failure to discover such acts or schemes in a timely manner could result in losses in Amaya’s operations. In addition, negative publicity related to such schemes could have an adverse effect on Amaya’s reputation, potentially causing a material adverse effect on the Corporation’s business, financial condition, results of operations and cash flow.

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Risks Related to the Corporation’s Common Shares

The Corporation’s Common Shares rank junior to the Preferred Shares with respect to amounts payable in the event of a liquidation.

The Common Shares rank junior to the Preferred Shares with respect to amounts payable in the event of its liquidation, dissolution or winding-up. If the Corporation voluntarily or involuntarily liquidates, dissolves or winds-up, no distribution of its assets may be made to holders of Common Shares until the Corporation has paid to holders of the Preferred Shares a liquidation preference equal to the greater of (i) $1,000 per Preferred Share, which is the initial liquidation preference, multiplied by an adjustment factor calculated by dividing the Conversion Ratio (as defined below) then in effect by 41.67, which is the initial Conversion Ratio; and (ii) the amount that a holder of Preferred Shares would have been entitled to receive if the Preferred Shares were converted into Common Shares immediately prior to the liquidation.

Certain provisions of the Preferred Shares could delay or prevent an otherwise beneficial takeover attempt of Amaya and, therefore, the ability of holders to exercise their rights associated with a potential fundamental change.

Certain provisions of the Preferred Shares could make it more difficult or more expensive for a third party to acquire the Corporation. For example, if a fundamental change were to occur, holders of the Preferred Shares may have the right to convert their Preferred Shares, in whole or in part, at an increased conversion rate and will also be entitled to receive a fundamental change make-whole amount. These features of the Preferred Shares could increase the cost of acquiring the Corporation or otherwise discourage a third party from acquiring it.

The Corporation’s advance notice bylaws may prevent attempts by its shareholders to replace or remove its current management.

Provisions in the Corporation’s bylaws may frustrate or prevent any attempts by the Corporation’s shareholders to replace or remove current management by making it more difficult for shareholders to remove Amaya’s directors. These charter provisions could make the removal of management more difficult. Furthermore, the existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for Common Shares. They could also deter potential acquisitions of the Corporation, thereby reducing the likelihood that shareholders could receive a premium for Common Shares in an acquisition.

Future sales or the possibility of future sales of a substantial amount of the Corporation’s Common Shares may depress the price of the Corporation’s Common Shares.

Future sales or the availability for sale of substantial amounts Common shares in the public market could adversely affect the prevailing market price of the Common Shares and could impair Amaya’s ability to raise capital through future sales of equity securities.

The Corporation cannot predict the size of future issuances of its Common Shares or other securities or the effect, if any, that future issuances of Common Shares or other securities of the Corporation will have on the market price of the Common Shares. Sales of substantial amounts of Common Shares (including Common Shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for Common Share.

The price and trading volume of the Common Shares may fluctuate significantly.

The market price of the Common Shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume of the Common Shares may fluctuate and cause significant price variations to occur. Volatility in the market price of the Common Shares may prevent a holder of Common Shares from being able to sell their shares. The market price for Common Shares could fluctuate significantly for various reasons, including:

•

the Corporation’s operating and financial performance;

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•

the Corporation’s quarterly or annual earnings, or those of other companies in Amaya’s industry;

•

conditions that impact demand for the Corporation’s products and services;

•

the public’s reaction to Amaya’s press releases, other public announcements and filings with securities authorities;

•

changes in earnings estimates or recommendations by securities analysts who track the Common Shares;

•

market and industry perception of the Corporation’s success, or lack thereof, in pursuing Amaya’s growth strategy;

•

strategic actions by Amaya or its competitors, such as acquisitions or restructurings;

•

changes in government and environmental regulation, including gaming taxes;

•

changes in accounting standards, policies, guidance, interpretations or principles;

•

arrival and departure of key personnel;

•

changes in Amaya’s capital structure;

•

sale of Common Shares by the Corporation or by members of the management team;

•

the expiration of contractual lockup agreements; and

•

changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in the gaming industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of the Common Shares could fluctuate based upon factors that have little or nothing to do with Amaya, and these fluctuations could materially reduce the Common Share price.

Because Amaya has not paid dividends since its initial public offering and does not anticipate paying dividends on its Common Shares in the foreseeable future, holders of Common Shares should not expect to receive dividends on Common Shares.

The Corporation has no present plans to pay cash dividends to its shareholders and, for the foreseeable future, intends to retain all of its earnings for use in its business. The declaration of any future dividends by the Corporation is within the discretion of the Board and will depend on the Corporation’s earnings, financial condition and capital requirements, as well as any other factors deemed relevant by the Board.

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The Corporation’s Chairman and Chief Executive Officer, GSO and BlackRock, each individually and collectively, own a significant amount of the Corporation’s voting shares and may be able to exert influence over matters requiring shareholder approval in the future.

As of March 30, 2015, Mr. Baazov, GSO and BlackRock beneficially owned or had control over 12%, 19.3% and 9.11%, respectively, of Amaya’s outstanding shares on a fully-diluted basis. As a result, each individually and collectively may be able to exercise significant influence over any matter requiring shareholder approval in the future.

DIVIDENDS

The Corporation has never declared or paid any dividend. The Corporation currently intends to retain any future earnings to fund the development and growth of its business and does not anticipate paying any dividend in the foreseeable future. Any future determination to pay dividends will be at the discretion of the Board and will depend upon many factors, including, without limitation, the Corporation’s results of operations, capital requirements and other factors as the Board may deem relevant, and any restrictions under applicable laws or its articles.

DESCRIPTION OF CAPITAL STRUCTURE

Amaya’s authorized share capital consists as of the date hereof of an unlimited number of Common Shares and 1,139,249 Preferred Shares. As of the date hereof, there are a total of (i) 133,165,366 Common Shares issued and outstanding, (ii) 1,139,249 Preferred Shares issued and outstanding, (iii) 359,950 2015 Warrants issued and outstanding, (iii) 597,749 2016 Warrants issued and outstanding, and (iv) 9,630,305 options to purchase Common Shares issued under the Corporation’s share option plan, of which 2,656,583 were exercisable. For more information on the 2015 Warrants and 2016 Warrants, see “General Development of the Business - Financings and Capital Markets Activities”. For more information on our options and stock option plan, see “Market for Securities – Prior Sales” and the 2014 Management Information Circular, which is available on SEDAR at www.sedar.com.

In addition to the foregoing, during the year ended December 31, 2014, Amaya granted the CJ Warrants to purchase 4,000,000 Common Shares to the lenders under the New CJ Facilities. The CJ Warrants entitle the holders thereof to acquire one Common Share per warrant at a price per Common Share equal to $19.17 at any time until the ten-year anniversary of the closing date of the New CJ Facilities. In connection with the closing of the Rational Group Acquisition, the Corporation also granted the GSO Warrants and BlackRock Warrants to each of GSO and BlackRock, respectively, which are exercisable for an aggregate of 12,750,000 Common Shares at a price per Common Share equal to $0.01 at any time until the ten-year anniversary of the Rational Group Acquisition Closing Date. For more information on the CJ Warrants, GSO Warrants and BlackRock Warrants, see “General Development of the Business – Financings and Capital Markets Activities”.

Common Shares

Each Common Share entitles its holder to notice of, and to one vote on, all matters submitted to the shareholders for their consideration. The holders of Common Shares are entitled to receive, after payment of the full dividend on any preferred shares, non-cumulative annual dividends if, as and when declared by the Board. There are no fixed dates or time limits on payment of dividends on shares of the Corporation. Holders of Common Shares do not have any pre-emptive rights or other rights to subscribe for additional shares, or any conversion rights. In the event of liquidation, dissolution or winding-up of the Corporation, the net assets of the Corporation available for distribution to its shareholders will be distributed rateably among the holders of the Common Shares, subject to the rights, privileges, restrictions and conditions of the Corporation’s then issued and outstanding preferred shares.

On July 30, 2014, the Corporation’s shareholders authorized the creation of gaming provisions affecting the Common Shares in order to facilitate compliance with gaming regulations (the “Gaming Provisions”). The Gaming Provisions became effective on November 28, 2014 pursuant to articles of amendment to the Corporation’s articles filed on the same date. The purpose of the Gaming Provisions is to protect the Corporation from the consequences of having a shareholder (an “Unsuitable Person”) whose ownership of Common Shares or whose failure to make an application to seek licensure or suitability review from or otherwise comply with the requirements of a gaming

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regulatory authority may result in the loss, suspension, revocation of, (or similar action) with respect to any license, permit, authorization, waiver or other gaming regulatory approval held by the Corporation, or the denial of any license, permit, authorization, waiver or other gaming regulatory approval sought by the Corporation, in each case as determined by the Board, in its sole discretion, after consultation with legal counsel and the applicable gaming regulatory authority. The Gaming Provisions provide the Corporation with a right to redeem all Common Shares held by an Unsuitable Person at a redemption price determined pursuant to a written valuation and fairness opinion from an investment banking firm of nationally recognized standing in the United States. This redemption right is required for the Corporation to comply with regulation in various jurisdictions where Amaya does business or is expected to do business, which prohibit Unsuitable Persons from holding shares of a corporation that require a gaming license to operate. The Gaming Provisions require individuals who plan to, either on their own or as part of a group acting in concert, acquire or dispose of 5% or more of Common Shares, to provide advance written notice to the Corporation prior to effecting such an acquisition or disposition. Notwithstanding the Gaming Provisions, the Corporation may not be able to exercise its redemption rights in full or at all. Under the QBCA, a corporation may not make any payment to redeem shares if the payment would cause the corporation to be unable to pay its liabilities as they become due or if making the payment would cause the corporation to be unable to pay, when due, the entire redemption price of its redeemable shares. Furthermore, Amaya may become subject to contractual restrictions on its ability to redeem its shares by, for example, entering into a secured credit facility subject to such restrictions.

Preferred Shares

In connection with its financing of the Rational Group Acquisition, on August 1, 2014, the Corporation issued US$1.05 billion of Preferred Shares. The Preferred Shares were issued at an offering price of $1,000.00 per Preferred Share. Each Preferred Share is convertible at the holder’s option at any time in whole or in part, initially into 41.67 Common Shares (the “Conversion Ratio”), based on an initial conversion price of $24.00 per Common Share (the “Initial Conversion Price”), subject to adjustments. Based on the Initial Conversion Price, approximately 47,473,167 Common Shares would be issuable upon the conversion of all of the Preferred Shares as of December 31, 2014. The Preferred Shares rank senior to the Common Shares in receiving payment of their liquidation preference (which is initially $1,000 per Preferred Share, subject to adjustments to the Conversion Ratio), upon the liquidation, winding up or dissolution of the Corporation or in any other distribution of substantially all of its assets (a “Liquidation”), are not entitled to receive dividends and have no voting rights except for amendments to the terms of the Preferred Shares or as otherwise required under applicable laws. The Conversion Ratio, representing the number of Common Shares that will be issued to a holder of Preferred Shares for each Preferred Share upon exercise of the conversion right, will be adjusted each February 1 and August 1 by multiplying the Conversion Ratio then in effect immediately prior to such adjustment by 1.03.

Amaya cannot force a mandatory conversion of the Preferred Shares until August 1, 2017. Thereafter, however, Amaya may give notice to holders of Preferred Shares to force conversion (in whole or in part under certain circumstances) if the following two conditions are satisfied: (i) the closing share price of the Common Shares has been in excess of 175% of the Initial Conversion Price on any 20 trading days within a 30 consecutive day period, and (ii) except in certain circumstances, the average daily volume on any 20 trading days within the 30 consecutive day period referred to above was at least 1.75 million Common Shares. Any mandatory conversion will also be subject to specified regulatory and consent conditions.

The Preferred Shares also contain anti-dilution Conversion Ratio adjustments for certain dividends or distributions (cash, shares or otherwise), share splits, share combinations, below market equity issuances or rights, options or warrant issuance, tender offer or exchange offer payments, and reorganization events. In addition, upon a “fundamental change”, additional Common Shares may be issuable to holders of Preferred Shares as a premium. “Fundamental change” events include:

•

a person or group (other than Amaya, its subsidiaries, GSO, BlackRock or any owner of 10% or more of the Common Shares as of August 1, 2014) becoming the beneficial owner of more than 50% of voting power for the election of Amaya’s directors;

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•

the consummation of a (i) recapitalization in which Common Shares are converted into or exchanged for other securities or assets; (ii) share exchange or merger in which Common Shares convert into cash, securities, other property; or (iii) sale, lease or other transfer of all or substantially all of Amaya’s assets to a third party (other than an Amaya subsidiary);

•

Common Shares being delisted from any of the TSX, New York Stock Exchange (“NYSE”), NASDAQ or LSE, if then listed on any such exchange; or

•

Amaya’s shareholders approving a Liquidation.

Under the terms of the Preferred Shares, for so long as each of GSO and BlackRock holds 50% or more of the Preferred Shares issued to it on August 1, 2014, Amaya undertakes:

•

not to incur indebtedness unless (i) the ratio of Consolidated Net Debt to LTM EBITDA (as each term is defined in the Preferred Share terms) would be 6.7 to 1 or less on a pro forma basis, or (ii) such indebtedness is Permitted Debt (as defined in the Preferred Share terms);

•

not to issue equity securities ranking equal or superior to the Preferred Shares;

•

not to make acquisitions that (i) individually exceed US$250.0 million, or (ii) since August 1, 2014, total US$500.0 million or more (subject to specified ordinary course of business and consent exceptions);

•

(i) not to require a mandatory conversion of Preferred Shares if such mandatory conversion would require a regulatory filing or waiver for any holder of Preferred Shares in excess of that required for an institutional investor waiver in the State of New Jersey, and (ii) to notify GSO and BlackRock in writing at least 60 days prior to any action that will require a regulatory filing or waiver for any holder of Preferred Shares in excess of that required for an institutional investor waiver in New Jersey;

•

to cooperate with holders of Preferred Shares in connection with anti-trust or competition filings relating to their investment in Amaya and/or conversion of Preferred Shares;

•

to list the Common Shares on the NYSE, NASDAQ or the LSE on or before November 1, 2015; and

•

to comply with Amaya’s continuous disclosure requirements and provisions of the registration rights agreement to which it is a party.

If Amaya fails to comply with these undertakings, the Conversion Ratio may be increased between a range of 2% and 6% per annum, depending on which undertaking is breached, for each year in which the breach occurs.

A further description of the terms of the Preferred Shares is included in the 2014 Management Information Circular, which is available on SEDAR at www.sedar.com.

2013 Debentures

The Corporation issued the 2013 Debentures pursuant to a first supplemental debenture indenture, dated as of February 7, 2013, to the debenture indenture, dated as of January 17, 2012 (the “First Supplemental Indenture”), by and between the Corporation and Computershare Trust Company of Canada (the “Debenture Agent”). The following is a summary description of the material terms of the 2013 Debentures, does not purport to be complete and is qualified in its entirety by the full text of the First Supplemental Indenture, which is available on SEDAR at www.sedar.com.

The 2013 Debentures mature on January 31, 2016 and bear interest at the rate of 7.5% per annum, payable in cash semi-annually in arrears on January 31 and July 31 in each year. Subject to certain conditions provided in the First Supplemental Indenture, including with respect to the satisfaction of certain conditions following a change of

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control, on or after January 31, 2015 and prior to January 31, 2016, the 2013 Debentures may be redeemed in whole or in part from time to time at the option of the Corporation at a price equal to 101% of the aggregate principal amount under the 2013 Debentures plus accrued and unpaid interest thereon. The 2013 Debentures are non-convertible, not guaranteed by any person and subordinated to the senior indebtedness of the Corporation in accordance with the provisions of the First Supplemental Indenture, including, without limitation, with respect to any distribution of the assets of the Corporation, any dissolution, winding up, liquidation or reorganization of the Corporation, and any payment, assignment or distribution to a trustee in bankruptcy, receiver or assignee for the benefit of creditors or other liquidation agent. In addition, the senior creditors, a receiver or any other enforcement agent may sell, mortgage, or otherwise dispose of the Corporation’s assets in whole or in part, free and clear of all 2013 Debenture liabilities and without the approval of, or any requirement to account to, the holders thereof or the Debenture Agent.

MARKET FOR SECURITIES

Trading Price and Volume

The Common Shares are currently listed for trading on the TSX under the trading symbol “AYA”. In addition to the Common Shares, the 2015 Warrants, 2016 Warrants and 2013 Debentures are also listed for trading on the TSX under the trading symbols “AYA.WT”, “AYA.WT.A” and “AYA.DB.A”, respectively. On September 22, 2014, Amaya was added to the S&P/TSX Composite Index.

The following table sets out the high and low prices and total trading volume of the Common Shares as reported by the TSX for each month of the year ended December 31, 2014:


Month	High		Low		Total Volume
December 2014	$	38.70	$	25.00		23,325,265

November 2014	$	38.94	$	32.15		18,816,056

October 2014	$	34.87	$	22.06		24,395,280

September 2014	$	37.00	$	29.17		30,738,045

August 2014	$	30.00	$	26.28		16,314,463

July 2014	$	30.67	$	21.51		22,456,289

June 2014	$	23.77	$	10.06		45,394,696

May 2014	$	11.46	$	6.88		17,078,808

April 2014	$	7.35	$	5.61		15,531,660

March 2014	$	9.13	$	7.40		4,409,078

February 2014	$	9.21	$	7.50		5,917,265

January 2014	$	7.97	$	7.20		4,611,815

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The following table sets out the high and low prices and total trading volume of the 2015 Warrants as reported by the TSX for each month of the year ended December 31, 2014:


Month	High		Low		Total Volume
December 2014	$	35.25	$	25.00		5,370

November 2014	$	35.40	$	30.75		27,650

October 2014	$	31.50	$	22.00		20,600

September 2014	$	33.47	$	28.00		44,800

August 2014	$	25.80	$	24.15		41,250

July 2014	$	27.57	$	18.71		104,426

June 2014	$	20.74	$	8.00		245,347

May 2014	$	8.25	$	4.20		195,700

April 2014	$	4.25	$	2.95		145,393

March 2014	$	6.02	$	4.46		28,050

February 2014	$	6.27	$	5.04		112,000

January 2014	$	5.05	$	4.50		34,600

The following table sets out the high and low prices and total trading volume of the 2016 Warrants as reported by the TSX for each month of the year ended December 31, 2014:


Month	High		Low		Total Volume
December 2014	$	32.48	$	23.20		15,816

November 2014	$	32.48	$	26.55		19,472

October 2014	$	28.00	$	18.50		63,376

September 2014	$	30.00	$	23.32		33,222

August 2014	$	23.40	$	20.01		55,830

July 2014	$	24.45	$	15.59		69,070

June 2014	$	17.26	$	5.00		216,219

May 2014	$	6.00	$	2.05		97,816

April 2014	$	2.10	$	1.26		75,644

March 2014	$	3.46	$	2.33		306,722

February 2014	$	3.57	$	1.89		96,760

January 2014	$	2.40	$	1.50		15,440

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The following table sets out the high and low prices and trading volume of the 2013 Debentures as reported by the TSX for each month of the year ended December 31, 2014:


Month	High		Low		Total Volume
December 2014	$	102.14	$	100.00		926,000

November 2014	$	102.14	$	100.04		544,000

October 2014	$	102.01	$	100.08		284,000

September 2014	$	103.01	$	101.01		1,218,000

August 2014	$	102.94	$	102.35		609,000

July 2014	$	103.11	$	101.01		1,670,000

June 2014	$	105.00	$	101.00		2,982,500

May 2014	$	101.50	$	100.01		1,004,000

April 2014	$	101.49	$	99.05		1,468,000

March 2014	$	100.61	$	99.02		1,559,000

February 2014	$	100.61	$	100.00		680,000

January 2014	$	101.49	$	100.00		1,120,000

Prior Sales

Grant of options

Amaya granted the following options during the year ended December 31, 2014.


Grant Date	Number of Options Granted		Exercise Price Per Share
January 1, 2014		600,000	$	7.95

February 26, 2014		142,500	$	8.43

August 18, 2014		2,798,800	$	28.65

September 8, 2014		315,000	$	31.30

September 12, 2014		65,000	$	35.05

October 10, 2014		1,000,500	$	27.50

October 17, 2014		6,500	$	27.91

October 20, 2014		950,000	$	20.00

October 25, 2014		50,000	$	32.83

November 10, 2014		35,000	$	32.91


Grand Total		5,963,300		—

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DIRECTORS AND OFFICERS

Directors and Executive Officers

The following table sets forth, for each of the Corporation’s directors and executive officers, the person’s name, age, place of residence, positions with the Corporation, principal occupation and, if a director, the day, month and year on which the person became a director. Directors are elected at the Corporation’s annual shareholders’ meetings for a term that expires as of the Corporation’s next annual shareholders meeting.


Name of Directors and Executive Officers	Position in the Corporation	Principal Occupation	Director Since	Common Shares, Directly or Indirectly, Beneficially Owned⁽¹⁾
David Baazov Montréal, Québec, Canada	President, Chief Executive Officer and Chairman of the Board	President, Chief Executive Officer and Chairman of the Board of Amaya Inc.	January 1, 2006		24,463,599
Daniel Sebag Montréal, Québec, Canada	Chief Financial Officer, Treasurer and Director	Chief Financial Officer, Amaya Inc.	May 11, 2010		350,000
Gen. Wesley K. Clark Little Rock, Arkansas, USA	Director⁽²⁾⁽³⁾	Chairman and Chief Executive Officer, Wesley K. Clark & Associates, LLC (strategic consulting firm)	May 11, 2010		15,000
Divyesh (David) Gadhia Burnaby, British Columbia, Canada	Director^{(2) (3)}	Chairman of spud.ca (local farmers and food producers network) and President of Atiga Investments Inc. (investment firm)	May 11, 2010		35,000
Harlan Goodson Sacramento, California, USA	Director⁽²⁾⁽³⁾	Attorney, The Law Office of Harlan W. Goodson (law firm)	May 11, 2010		—
Dr. Aubrey Zidenberg Toronto, Ontario, Canada	Director	President and Chief Executive Officer, Casino Amusements of Canada	July 30, 2014		—
Marlon D. Goldstein Miami, Florida, USA	Executive Vice-President, Corporate Development & General Counsel and Secretary	Executive Vice-President, Corporate Development & General Counsel, Amaya Inc. ⁽⁴⁾	n/a		—

(1)	The information as to the number of Common Shares beneficially owned or over which control is exercised, not being within the knowledge of the Corporation, has been furnished by each director and executive officer individually, as of March 30, 2015.

(2)	Member of the Corporate Governance, Nominating and Compensation Committee.

(3)	Member of the Audit Committee.

(4)	Marlon D. Goldstein became Executive Vice-President, Corporate Development & General Counsel of the Corporation on January 24, 2014.

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David Baazov

Mr. David Baazov, 34, is the Chairman of the Board and has been the President and Chief Executive Officer of Amaya since 2006, and is responsible for devising and implementing the general business strategies of the Corporation. His duties include overseeing all aspects of the business including, but not limited to, sales and marketing, product development, operations and logistics and the overall growth of the Corporation. Mr. Baazov started Amaya’s business in the mid-2000’s, led the Corporation through a successful listing on the Canadian TSX Venture Exchange in July 2010, and has since turned the Corporation into a global gaming leader through a combination of organic growth and strategic acquisitions. Amaya completed the Rational Group Acquisition in August 2014, resulting in Amaya becoming the world’s largest publicly traded online gaming company. The industry and business community have recognized Mr. Baazov with certain awards, including Ernst & Young’s 2013 Québec EY Entrepreneur of the Year for the Information Technology category. A panel of Canadian technology analysts and readers of Cantech Letter (www.cantechletter.com), an online magazine focused on innovation sector companies listed on the TSX and the TSX Venture Exchange, selected Mr. Baazov as the TSX Venture Tech Executive of the Year in 2012, and in each of 2013 and 2014 as the TSX Tech Executive of the Year. From 2000 to 2006, Mr. Baazov was the founder of a business marketing company and served as the Vice President of Sales of Vortek Systems Inc., a supplier and distributor of computer hardware and accessories.

Daniel Sebag, C.A.

From 1993 to 2007, Mr. Sebag served as a financial, accounting and information systems consultant to several multinational companies, including Bombardier, Ericsson, Transat AT and Air Liquide. Mr. Sebag earned a Bachelor’s of Science degree in Psychology from McGill University in 1987 and a Specialized Graduate Diploma in accounting from McGill University in 1991.

Divyesh (David) Gadhia, C.A.

Mr. Divyesh (David) Gadhia, 52, is a director and served as the Chief Executive Officer and Executive Vice Chairman of Gateway Casinos & Entertainment Limited from 1992 until 2010, where he was responsible for strategic initiatives, regulatory matters and governmental relations. He has served as a director of a number of other private and public companies, as well as charities, including a director of the Canadian Gaming Association from 2005 to 2010, and currently serves as a director of Gateway Casinos & Entertainment Limited and Trian Equities. In 2009, Mr. Gadhia was awarded the Canadian Gaming News Outstanding Achievement Award and the Business in Vancouver’s Top 40 Under 40 Award. Since 2010, Mr. Gadhia has been the Chairman of Spud.ca, a local farmers and food producers network, and the President of Atiga Investments Inc., an investment firm focused on consumer products. Mr. Gadhia is Chartered Public Accountant and holds a business degree from Simon Fraser University.

Harlan Goodson

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being appointed to the position of Director of California’s Division of Gambling Control, Mr. Goodson worked in the California State Senate as a legislative consultant for Senator Bill Lockyer from 1994 to 1999. While serving as a consultant in the state legislature, Mr. Goodson drafted legislation in the areas of criminal law, correctional law, juvenile law and insurance law. Since 1996, Mr. Goodson has been an adjunct law professor teaching classes on the legislative process and statutory interpretation at John F. Kennedy University, School of Law. He has been a national speaker at conferences, symposia, law schools and before governmental bodies on the subjects of gaming regulation, Tribal government gaming, and Tribal-State relations. Mr. Goodson is a member of the California State Bar, the International Masters of Gaming Law and the International Association of Gaming Advisors. In 2007, Mr. Goodson also served as a Judge Pro Tempore for the Superior Court in Sacramento, California. Mr. Goodson has also been listed in America’s Best Lawyers annually since 2005 and was selected by his peers as the Northern California 2012 Attorney of the Year for Gaming Law.

General Wesley K. Clark

General Wesley K. Clark, 70, is a current director and has served and currently serves as Chairman and Chief Executive Officer of Wesley K. Clark & Associates, a strategic consulting firm, since its founding in 2004, the Co-Chairman of Growth Energy, an organization that represents producers and supporters of ethanol, since January 2009, a senior fellow at UCLA’s Burkle Center for International Relations since 2006, the Director of International Crisis Group since 2007, Chairman of City Year Little Rock, an AmeriCorps program, which is a national service organization that unites young adults, since 2004, and is a member of numerous corporate boards of directors including, Bankers Petroleum Ltd., BNK Petroleum, Inc., Petromanas Energy Inc., POET, LLC, Rentech Inc., root9B Technologies, Inc. and The Grilled Cheese Truck, Inc. General Clark authored four books and since 2009, serves as a member of the Clinton Global Initiative’s Energy & Climate Change Advisory Board and ACORE’s Advisory Board. General Clark retired as a four star general after 38 years in the United States Army. He graduated first in his class at West Point Military Academy and earned B.A. and M.A. degrees in Philosophy, Politics and Economics at Oxford University as a Rhodes Scholar. While serving in Vietnam, he commanded an infantry company in combat, where he was severely wounded and evacuated home on a stretcher. He later commanded at the battalion, brigade and division levels, and served in a number of significant staff positions, including service as the Director Strategic Plans and Policy (J-5). In his last assignment as Supreme Allied Commander Europe, he led NATO forces to victory in Operation Allied Force, saving 1.5 million Albanians from ethnic cleansing. His awards include the Presidential Medal of Freedom, Defense Distinguished Service Medal (five awards), Silver Star, Bronze Star, Purple Heart, honorary knighthoods from the British and Dutch governments, and numerous other awards from other governments, including the award of Commander of the Legion of Honor from the French government.

Dr. Aubrey Zidenberg

Dr. Aubrey Zidenberg, 62, is a current director and has served and currently serves as the President and Chief Executive Officer of Casino Amusements Canada, which offers commercial gaming industry experience to both the private sector and governments, since 1976. Dr. Zidenberg is a gaming industry specialist with extensive experience in the development, implementation and operation of international gaming, tourism and entertainment projects since 1975, including, without limitation, in the areas of commercial gaming, operations and regulatory compliance, and has advised and consulted in these areas in both the government and the private sectors. He has worked internationally with companies such as Penn National Gaming, The Bahamas Amusement Corporation, Summa Corporation, Resorts International, Trump Organization, Playboy Casinos, Carnival Hotels & Casinos, Harrah’s and Hard Rock International. Since 2011, Dr. Zidenberg has been an International Vice President of B’nai Brith, an international human rights organization which has operated in Canada since 1875, and currently chairs its Special Advisory Council to the League for Human Rights. Dr. Zidenberg was a Member of the Board of Directors of the Responsible Gambling Council of Canada for over 15 years, registered with the Alcohol and Gaming Commission of Ontario and is a recipient of the 2002 Canadian Gaming Industry Award of Excellence. In 2010, Dr. Zidenberg created and developed the First Nation Canadian Gaming Awards program. Dr. Zidenberg is currently the Chair of the York Regional Police – Investigative Services Community Advisory Council and has served in such position since 2013. A noted community leader, Dr. Zidenberg received an Honorary Doctorate of Laws degree from Assumption University in Windsor, Ontario in 2007 for his human rights work, was presented with the Queen Elizabeth II Golden Jubilee Medal in 2003 and the Queen Elizabeth II Diamond Jubilee Medal in 2013, in each case for his dedicated service to community and country, was knighted Chevalier de France in 2012 and received the York Regional Police Service Board 2014 Civic Leadership Award in 2015. Dr. Zidenberg earned a B.A. from York University in 1975.

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Marlon D. Goldstein

Mr. Marlon Goldstein, 41, joined Amaya in January 2014 and serves as its Executive Vice-President, Corporate Development & General Counsel and Secretary. Prior to joining Amaya, Mr. Goldstein was a principal shareholder in the corporate and securities practice at the international law firm of Greenberg Traurig LLP, where he practiced as a lawyer from 2002 until 2014 (since 2006 as a shareholder). Mr. Goldstein’s practice was focused on corporate and securities matters including mergers and acquisitions, securities offerings, and financing transactions. Mr. Goldstein was also the co-chair of the firm’s Gaming Practice, a multi-disciplinary team of attorneys representing owners, operators and developers of gaming facilities, manufacturers and suppliers of gaming devices, investment banks and lenders in financing transactions, and Indian tribes in the development and financing of gaming facilities. Mr. Goldstein earned a B.B.A. with a concentration in accounting from Emory University in Atlanta, Georgia in 1996 and a J.D. from the University of Florida, Levin College of Law in Gainesville, Florida in 1999.

Directors’ and Executive Officers’ Interests in Common Shares

The Corporation’s directors and executive officers own, or have the right to exercise direction or control over, a total of 24,863,599 Common Shares, representing approximately 18.67% of the total issued and outstanding Common Shares as of the date of this annual information form. Additionally, a total of 1,826,500 options have been granted to the Corporation’s directors and executive officers to purchase an equal amount of Common Shares under the Corporation’s stock option plan.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

Except as disclosed below and to the knowledge of the Corporation, none of the directors or executive officers of the Corporation is, or within 10 years before the date hereof, has been:

(a)

a director, chief executive officer or chief financial officer of any company (including the Corporation) that:

(i)

was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer, or

(ii)

was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;

(b)

a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

(c)

has become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromises with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive director.

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Notwithstanding the foregoing, General Clark (i) ceased to be a director of Adam Aircraft Industries less than one year prior to its filing for Chapter 7 bankruptcy protection under applicable U.S. bankruptcy laws in February 2008; (ii) ceased to be Chairman of Summit Global Logistic Inc. less than one year prior to its filing for Chapter 11 bankruptcy protection under applicable U.S. bankruptcy laws in January 2008 (which was later converted to Chapter 7 status in November 2008); and (iii) ceased to be a director of NutraCea Inc. less than one year prior to its filing for Chapter 11 bankruptcy protection under applicable U.S. bankruptcy laws in November 2009.

To the knowledge of the Corporation, none of the directors or executive officers of the Corporation has been subject to:

(a)

any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(b)

any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

The directors and officers of the Corporation are required by law to act honestly and in good faith with a view to the best interest of the Corporation and to disclose any interests which they may have in any transaction, project or opportunity of the Corporation. However, the Corporation’s directors and officers may serve on the boards and/or as officers of other companies which may compete in the same industry as the Corporation, giving rise to potential conflicts of interest, including, without limitation, with respect to negotiating terms of and consummating certain transactions in which such companies and the Corporation may participate. Conflicts of interest that arise at a meeting of the Board must be disclosed and the conflicted director must recuse himself or herself from the meeting and abstain from participating and voting for or against the approval of any transaction, project or opportunity in which they may have an interest. The remaining directors will determine whether or not the Corporation will participate in any such transaction, project or opportunity. Subject to such disclosure and recusal and any limitations in the Corporation’s constating documents, a transaction would not be void or voidable because it was made between the Corporation and one or more of its directors or officers who have a conflict of interest or by reason of such director or officer being present at the meeting at which such transaction, project or opportunity was approved.

To the best of the Corporation’s knowledge, there is no known existing or potential conflict of interest among the Corporation, its promoter, directors, officers or other members of management of the Corporation as a result of their respective outside business interests.

The directors and officers of the Corporation are aware of the existence of laws governing accountability of directors and officers for usurping corporate opportunities and requiring disclosures by directors or officers of conflicts of interest, and the Corporation will rely upon such laws in respect of any conflict of interest or breach of duty. See also “Interest of Management and Others in Material Transactions” below.

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Audit Committee

Audit Committee Charter

The text of the charter of the audit committee of the Board (the “Audit Committee”) is set forth in Schedule A attached hereto.

Purpose

The primary purpose of the Audit Committee is to assist the Board in discharging its financial and accounting oversight and evaluation responsibilities. In particular, the Audit Committee oversees the financial reporting process to ensure the quality, transparency and integrity of the Corporation’s published financial information. The Audit Committee also reviews and is responsible for, and reports to the Board on, among other things, (i) the quality and integrity of the Corporation’s consolidated financial statements and other financial information, (ii) compliance with legal and regulatory requirements related to financial reporting, (iii) the effectiveness of the systems of control, including risk management, established by management to safeguard the tangible and intangible assets of the Corporation and its subsidiaries, (iv) the proper maintenance of accounting and other financial records, (v) annual and quarterly interim financial information, (vi) the independent audit process, including recommending to the Board and the Corporation’s shareholders the appointment and compensation of the external auditor, and assessing the qualifications, performance and independence of the external auditor, (vii) the performance and objectivity of the Corporation’s internal audit function, (viii) all non-audit services, (ix) the development and maintenance of procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls and auditing matters, and the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters, (x) the review of environmental, insurance and other liability exposure issues relevant to the affairs of the Corporation, and (xi) any additional matters delegated to the Audit Committee by the Board. The Audit Committee is also responsible for the review and approval of all related party transactions in which the Corporation is involved or which the Corporation proposes to enter into.

For the purpose of performing its duties, the Audit Committee has the right to maintain direct communication with the Corporation’s external auditor and the Board, to inspect all books and records of the Corporation and its subsidiaries, to seek any information it requires from any employee of the Corporation and its subsidiaries, and to retain outside counsel or other experts.

Meetings and Composition

The Audit Committee is required to meet at least once per fiscal quarter and must have a minimum of three directors, each of whom must be “independent” and “financially literate” within the meaning of applicable Canadian securities laws.

The Audit Committee is now comprised of Messrs. Goodson, Clark and Gadhia, each of whom is “independent” and “financially literate” within the meaning of applicable Canadian securities laws.

Relevant Education and Experience

Each member of the Audit Committee has an understanding of Canadian generally accepted accounting principles and has the ability to understand a set of financial statements that presents a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements and its internal controls and procedures for financial reporting.

All three members of the Audit Committee serve or have served on a number of boards of directors of public companies and the Board has determined that each of them has acquired financial and accounting education or experience that qualifies them as “financially literate”.

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Name of Director	Relevant Financial Education and Experience	Other Current Public Company Directorships
Harlan Goodson	Lawyer	None

Divyesh Gadhia	Chartered Accountant	None

Gen. Wesley Clark	General Clark has participated in the review of financial statements while a director on various boards. In addition, General Clark has taken a series of governance and securities courses.	• Bankers Petroleum Ltd. • BNK Petroleum, Inc. • Rentech Inc. • Petromanas Energy Inc. • root9B Technologies, Inc. • The Grilled Cheese Truck, Inc.

Pre-approval Policies and Procedures for Audit Services

The Audit Committee has established a practice of approving audit and non-audit services provided by the Corporation’s independent external auditor. The Audit Committee has delegated to its Chairman, Mr. Goodson, the authority, to be exercised between regularly scheduled meetings of the Audit Committee, to pre-approve audit and non-audit services provided by the independent external auditor. All such pre-approvals are reported by the Chairman at the meeting of the Audit Committee at the next Audit Committee meeting following any such pre-approval.

External Auditor Service Fees

On September 17, 2014, the Corporation changed its independent external auditor and the Board appointed Deloitte LLP as successor auditor in replacement of Richter LLP. The aggregate fees billed by Richter LLP, until September 17, 2014, for the fiscal years ended December 31, 2014 and 2013, respectively, were as follows:


Description	2014		2013
Audit Fees^(a)	$	0	$	250,000

Audit – Related Fees^(b)	$	0	$	0

Tax Fees^(c)	$	0	$	0

All Other Fees^(d)	$	116,805	$	0

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The aggregate fees billed by Deloitte LLP beginning on September 17, 2014, for the fiscal year ended December 31, 2014, were as follows:


Description	September 17, 2014 to December 31, 2014
Audit Fees^(a)	$	1,845,000

Audit – Related Fees^(b)	$	51,000

Tax Fees^(c)	$	166,000

All Other Fees^(d)	$	0

(a)

“Audit Fees” means the aggregate fees billed by the Corporation’s external auditor for audit services related to the annual financial statements of the Corporation and its wholly owned subsidiaries, and for services provided in connection with statutory and regulatory filings or similar engagements. In addition, audit fees include the cost of translation of various annual continuous disclosure documents of the Corporation (2013- audit services provided by Richter LLP).

(b)

“Audit-Related Fees” means the aggregate fees billed for assurance and related services by the Corporation’s external auditor that are reasonably related to the performance of the audit or review of the Corporation’s financial statements and are not reported as “Audit Fees”, including, without limitation, other attest services not required by statute or regulation.

(c)	“Tax Fees” means the aggregate fees billed for professional services rendered by the Corporation’s external auditor for tax compliance and assistance with various other tax related questions.

(d)	“All Other Fees” means the aggregate fees billed in the last fiscal year for products and services provided by the Corporation’s previous external auditor, Richter LLP, other than the services reported under clauses (a), (b) and (c), above.

Corporate Governance, Nominating and Compensation Committee

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

The Corporation is currently not, and was not, a party to any material legal proceedings, and its property and assets are not and were not the subject of material legal proceedings, during the year ended December 31, 2014. The Corporation is not aware of any material legal proceedings outstanding, threatened or pending as of the date hereof by or against the Corporation. Notwithstanding the foregoing, given the nature of its business, the Corporation is, and may from time to time in the future be, party to various, and at times numerous, legal, administrative and regulatory inquiries, investigations, proceedings and claims that arise in the ordinary course of business. With respect to such legal and regulatory matters, the Corporation believes that the amount or estimable range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Corporation’s business, consolidated financial position, results of operations, or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of such legal matters were to be resolved against the Corporation for amounts in excess of management’s expectations, its results of operations and financial condition, including in a particular reporting period, could be materially adversely affected. On March 11, 2015, Amaya commented on a tax dispute between a subsidiary of Rational Group and Italian tax authorities related to operations of such subsidiary, particularly under the PokerStars brand, in Italy prior to the Rational Group Acquisition. Amaya was aware of the dispute prior to Rational Group Acquisition, but believes Rational Group has operated in compliance with the applicable local tax regulations and has paid €120 million in local taxes during the period subject to the dispute. The merger agreement related to the transaction provides remedies to address certain income tax and other liabilities that might occur post-closing but stemming from operations prior to the date of acquisition, including monies held in escrow as initial sources for indemnification. Amaya does not anticipate that these tax issues would apply to future fiscal periods.

The Corporation is not and was not subject to, during the year ended December 31, 2014: (i) penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory

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authority; (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision; and (iii) settlement agreements entered into before a court relating to Canadian securities legislation or with a Canadian securities regulatory authority. As announced on December 11, 2014, the Autorité des marchés financiers, the securities regulatory authority in the Province of Quebec, is investigating trading activities in Amaya’s securities surrounding the company’s announcement of the Rational Group Acquisition (the “AMF Investigation”). Also related to trading surrounding such acquisition, on July 8, 2014 and December 9, 2014, the Corporation received written inquiries from the U.S. Financial Industry Regulatory Authority seeking information from the Corporation and a number of its financial advisers regarding certain communications with certain investors (the “FINRA Inquiry”). To the Corporation’s knowledge, the AMF Investigation and FINRA Inquiry, do not involve any allegations of wrongdoing by the Corporation. The Corporation will continue to cooperate, if and as requested, consistent with its practice to always cooperate with regulatory authorities.

In the normal course of business, to facilitate transactions of services and products, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our officers, directors, and certain employees, and our constituting documents contain similar indemnification obligations. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

To the Corporation’s knowledge, there are no material interests, direct or indirect, of directors, executive officers, any shareholder who beneficially owns, directly or indirectly, more than 10% of any class or series of voting securities of the Corporation, or any associate or affiliate of such persons, in any transaction within the last three most recently completed fiscal years or in any proposed transaction which has materially affected or would reasonably be expected to materially affect the Corporation.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Shares in Canada is Computershare Investor Services Inc. at its principal offices in Montréal, Québec and Toronto, Ontario. The transfer agent and registrar for the 2015 Warrants, 2016 Warrants, 2013 Debentures and the Preferred Shares is Computershare Trust Company of Canada Inc. at its principal offices in Montréal, Québec and Toronto, Ontario.

MATERIAL CONTRACTS

The following is a list of the Corporation’s material contracts required to be listed under applicable Canadian securities laws, including those entered into in and out of the ordinary course of business, that the Corporation or the subsidiaries of the Corporation have entered into since January 1, 2014 or prior thereto but which are still in effect:

(a)

the stock purchase agreement, dated March 30, 2015, entered into among the Corporation, AGS, LLC and Cadillac Jack, Inc. in connection with the CJ Sale. See “Business of the Corporation - Overview”;

(b)

the registration rights agreements, dated August 1, 2014, entered into among the Corporation and each of GSO Capital Partners L.P and BlackRock Financial Management, Inc. and their respective affiliated funds managed or advised by them in connection with the Rational Group Acquisition. See “General Development of the Business – Key Completed Transactions – Acquisitions”;

(c)

the first lien credit agreement, dated August 1, 2014, entered into among the Corporation, Amaya Holdings Coöperatieve U.A., Amaya Holdings B.V., Amaya (US) Co-Borrower, LLC, Deutsche Bank

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AG New York Branch, Deutsche Bank Securities Inc., Barclays Bank PLC and Macquarie Capital (USA) Inc. in connection with the debt financing component of the Rational Group Acquisition. See “General Development of the Business – Key Completed Transactions – Acquisitions”;

(d)

the second lien credit agreement, dated August 1, 2014, entered into among the Corporation, Amaya Holdings Coöperatieve U.A., Amaya Holdings B.V., Amaya (US) Co-Borrower, LLC, Barclays Bank PLC, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc. in connection with the debt financing component of the Rational Group Acquisition. See “General Development of the Business – Key Completed Transactions – Acquisitions”;

(e)

the subscription agreement, dated July 31, 2014, entered into among the Corporation and GSO Capital Partners L.P. and its affiliated funds managed or advised by it listed thereunder in connection with the subscription of Preferred Shares and Common Shares by the funds listed in the subscription agreement to finance a portion of the purchase price paid by the Corporation for the Rational Group Acquisition. See “General Development of the Business – Financings and Capital Markets Activities”;

(f)

the subscription agreement, dated July 31, 2014, entered into among the Corporation and BlackRock Financial Management, Inc. and its affiliated funds managed or advised by it listed thereunder in connection with the subscription of Preferred Shares by the funds listed in the subscription agreement in connection with the Preferred Share Financing related to the financing of the Rational Group Acquisition. See “General Development of the Business– Financings and Capital Markets Activities”;

(g)

the underwriting agreement, dated July 31, 2014, entered into among the Corporation and its subsidiaries and Canaccord Genuity Corp. in connection with the Bought Deal Component of the Preferred Share Financing related to the financing of the Rational Group Acquisition. See “General Development of the Business – Financings and Capital Markets Activities”;

(h)

the subscription receipt agreement, dated July 7, 2014, entered into among the Corporation, Canaccord Genuity Corp. and Computershare Trust Company of Canada, in connection with the Subscription Receipt Offering related to the financing of the Rational Group Acquisition. See “General Development of the Business – Financings and Capital Markets Activities”;

(i)

the underwriting agreement, dated July 7, 2014, entered into among the Corporation and its subsidiaries, Canaccord Genuity Corp., Cormark Securities Inc., Desjardins Securities Inc. and Clarus Securities Inc. in connection with the Subscription Receipt Offering related to the financing of the Rational Group Acquisition. See “General Development of the Business – Financings and Capital Markets Activities”;

(j)

the deed and scheme of merger agreement, dated June 12, 2014, entered into among the Corporation, Amaya Holdings B.V., Titan IOM Mergerco Ltd., Oldford Group Limited and each of the selling securityholders of Oldford Group Limited, in connection with the Rational Group Acquisition. See “General Development of the Business – Key Completed Transactions – Acquisitions”;

(k)

the revenue guarantee agreement, dated as of February 11, 2014, entered into among the Corporation, Cryptologic Malta Holdings Limited, Gaming Portals Limited, Amaya (Malta) Limited, Ongame Network Ltd. and Cryptologic Operations Limited, in connection with the sale of WagerLogic. See “General Development of the Business – Key Completed Transactions - Divestitures”;

(l)

the stock purchase agreement, dated as of June 10, 2013, and as amended as of February 13, 2014, entered into among Amaya Americas Corporation, Diamond Game Enterprises, James Breslo and Roy Johnson, in connection with the acquisition of Diamond Game. See “General Development of the Business – Key Completed Transactions – Acquisitions”;

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(m)

the first amendment to agreement and plan of merger, dated as of November 5, 2012, entered into among Smart Games Hungary Kft, Luxembourg Branch and Odyssey Acquisition Corporation, in connection with the acquisition of Cadillac Jack. See “General Development of the Business – Key Completed Transactions – Acquisitions”; and

(n)

the agreement and plan of merger, dated as of September 25, 2012, entered into among Smart Games Hungary Kft, Luxembourg Branch, Cadillac Jack Holding LLC, Cadillac Jack, the Corporation, Amaya Holdings Corporation and Odyssey Acquisition Corporation, in connection with the acquisition of Cadillac Jack. See “General Development of the Business – Key Completed Transactions – Acquisitions”.

Copies of these agreements may be inspected at the Corporation’s headquarters located at 7600 TransCanada Highway, Pointe-Claire, Québec, H9R 1C8, Canada during normal business hours and on SEDAR at www.sedar.com.

INTEREST OF EXPERTS

The Corporation’s independent external auditor for the year ended December 31, 2013 was Richter LLP. Effective September 17, 2014, and for the year ended December 31, 2014, Deloitte LLP was the independent external auditor of the Corporation. Both Richter LLP and Deloitte LLP report that they are independent of the Corporation within the meaning of the rules of professional conduct of the Ordre des comptables professionnels agréés du Québec.

ADDITIONAL INFORMATION

Additional information relating to Amaya may be found on SEDAR at www.sedar.com. Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of Amaya securities and securities authorized for issuance under equity compensation plans, is contained in the 2014 Management Information Circular. Additional financial information is provided in Amaya’s financial statements and management’s discussion and analysis for the year ended December 31, 2014, which is available on SEDAR at www.sedar.com.

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SCHEDULE A

CHARTER OF THE AUDIT COMMITTEE

1.	PURPOSE AND RESPONSIBILITIES OF THE COMMITTEE

1.1

Purpose

The Audit Committee (the “Committee”) is a standing committee appointed by the Board of Directors (the “Board”) of the Corporation. The primary purpose of the Committee is to assist Board oversight of:

(a)

the integrity of Amaya’s financial statements;

(b)

Amaya’s compliance with legal and regulatory requirements;

(c)

the External Auditor’s qualifications and independence;

(d)

the performance of Amaya’s External Auditor; and

(e)

the effectiveness of Amaya’s internal controls environment.

2.	DEFINITIONS AND INTERPRETATION

2.1	Definitions:

In this Charter:

(a)

“Board” means the board of directors of Amaya;

(b)

“Chairman” means the Chairman of the Committee;

(c)

“Committee” means the audit committee of the Board;

(d)

“Director” means a member of the Board;

(e)

“External Auditor” means Amaya’s independent auditor; and

(f)

“Amaya” or the “Corporation” means Amaya Inc.

(g)

“Independent Director” means a director who has no direct or indirect relationship with Amaya, which could be reasonably expected to interfere with the exercise of independent judgment regarding the best interests of Amaya. An Independent Director must meet all of the requirements for independence as an audit committee member that are prescribed by applicable securities laws and stock exchange rules. Save exceptions, a Director is not an Independent Director if he or she:

(i)

is or has been within the last three years, an employee or executive officer of Amaya;

(ii)

is a member of the immediate family of an individual who is, or has been within the last three years, an executive officer of Amaya;

(iii)

is or has been (or whose immediate family member is or has been), within the last three years, an executive officer, a partner or an employee of a material service provider of Amaya (including the external auditors unless their engagement has ended);

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(iv)

is or has been (or whose immediate family member is or has been), within the last three years, an executive officer of an entity if any of the current senior management of Amaya serves or served at the same time on the entity’s compensation committee;

(v)

has a relationship with Amaya under which he or she may directly or indirectly accept any consulting, advisory or other fees from Amaya or a related entity, except for any compensation as a member of the Board;

(vi)

received (or whose immediate family member received) more than $75,000.00 in direct compensation from Amaya (excluding fees as directors) during any 12 month period within the last three years; or,

(vii)

is an affiliated person of Amaya.

(h)

“Management” means Management of the Corporation, specifically including the CEO and the CFO.

2.2	Interpretation

The provisions of this Charter are subject to the provisions of Amaya’s articles and by-laws and to applicable legislation.

CONSTITUTION AND FUNCTIONING OF THE COMMITTEE

3.	ESTABLISHMENT AND COMPOSITION OF THE COMMITTEE

3.1	Establishment of the Committee

The Committee is hereby created with the constitution, function and responsibilities herein set forth.

3.2	Appointment and Removal of Members of the Committee

(a)

Board Appoints Members. The members of the Committee shall be appointed by the Board.

(b)

Annual Appointments. The appointment of members of the Committee shall take place annually at the first meeting of the Board after a meeting of the shareholders at which Directors are elected, provided that if the appointment of members of the Committee is not so made, the Directors who are then serving as members of the Committee shall continue as members of the Committee until their successors are appointed.

(c)

Vacancies. The Board may appoint a member to fill a vacancy which occurs in the Committee between annual elections of Directors. Whenever there is a vacancy on the Committee, the remaining members may exercise all its power as long as a quorum remains in office.

(d)

Removal of Member. Any member of the Committee may be removed from the Committee by a resolution of the Board.

3.3	Number of Members

The Committee shall consist of three (3) or more Directors. Should at any time the Committee have a vacancy because of the death, resignation, bankruptcy, adjudicated incompetence, removal or change in circumstance of one or more Directors who were on the Committee, the Board may appoint Directors who do not meet the requirements of Section 3.4 or Section 3.5 of this Policy to the extent and for such periods as are permitted under all applicable securities law and stock exchange requirements.

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3.4	Independence of Members

Each member of the Committee shall be independent for the purposes of all applicable regulatory and stock exchange requirements including, without limitation, those of the Toronto Stock Exchange (TSX) and National Instrument 52-110 of the Canadian Securities Administrators (unless such member is exempt from such requirement).

3.5	Financial Literacy

(a)

Financial Literacy Requirement. Each member of the Committee shall be financially literate or must become financially literate within a reasonable period of time after his or her appointment to the Committee.

(b)

Definition of Financial Literacy. “Financially literate” means the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by Amaya’s financial statements.

3.6	Committee Financial Expert

(a)

Attributes of a Committee Financial Expert. To the extent possible, the Board will appoint to the Committee at least one Director who has the following attributes:

(i)

an understanding of generally accepted accounting principles (“GAAP”), international financial reporting standards (“IFRS”) and financial statements;

(ii)

an ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;

(iii)

experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by Amaya’s financial statements, or experience actively supervising one or more persons engaged in such activities;

(iv)

an understanding of internal controls and procedures for financial reporting; and

(v)

an understanding of audit committee functions.

(b)

Experience of the Committee Financial Expert. To the extent possible, the Board will appoint to the Committee at least one Director who acquired the attributes in (a) above through:

(i)

education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions (or such other qualification as the Board interprets such qualification in its business judgment);

(ii)

experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;

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(iii)

experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or

(iv)

other relevant experience.

3.7	Board Approval Required

No member of the Committee shall serve on more than three (3) public company audit committees without the approval of the Board.

4.	COMMITTEE CHAIRMAN

4.1	Board to Appoint Chairman

The Board shall appoint the Chairman from the members of the Committee (or, if it fails to do so, the members of the Committee shall appoint the Chairman from among its members). The Chairman shall be responsible for leadership of the Committee, including preparing the agenda, presiding over the meetings, making committee assignments and reporting to the Board.

4.2	Chairman to be Appointed Annually

The designation of the Chairman shall take place annually at the first meeting of the Board after a meeting of the shareholders at which Directors are elected, provided that if the designation of Chairman is not so made, the Director who is then serving as Chairman shall continue as Chairman until his or her successor is appointed.

5.	COMMITTEE MEETINGS

5.1

Quorum

A quorum of the Committee shall be two (2) members.

5.2

Secretary

The Chairman shall designate a person who need not be a member of the Committee to act as secretary or, if the Chairman fails to designate such a person, the secretary of the Corporation shall be secretary of the Committee. The agenda of the Committee meeting will be prepared by the Chairman, working with the secretary of the Committee and, whenever reasonably practicable, circulated to each member prior to each meeting. The secretary shall attend the meetings, during which he or she shall take minutes.

5.3	Time and Place of Meetings

(a)

Frequency. Meetings shall be called by the Chairman at times necessary to perform the duties described herein in a timely manner, provided that the Committee shall meet at least quarterly.

(b)

Request. The Chairman of the Board and the President and Chief Executive Officer of Amaya may request that the Chairman hold a meeting of the Committee.

(c)

Notice. Notice of each meeting shall be given to each Committee member in accordance with the by-laws of the Corporation, as amended and restated from time to time, and to the other Directors and to Amaya’s senior management. Unless they are expressly called to the meeting, the latter only receive the notice for information purposes. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Whenever practicable, the agenda for the meeting and the meeting materials shall be provided to members before each Committee meeting in sufficient time to provide adequate opportunity for their review.

(d)

Attendance. The Committee members, whenever possible, shall take all necessary steps to attend Committee meetings in person, except for meetings being held by telephone or videoconference, and to prepare themselves with respect to the matters and documents to be discussed thereat.

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5.4	In Camera Meetings

At each meeting of the Committee, there shall be a portion of the meeting at which no members of Management, the External Auditor, or the internal auditor (if any) are present.

5.5	Right to Vote

Each member of the Committee shall have the right to vote on matters that come before the Committee. If a Committee member faces a potential or actual conflict of interest relating to a matter before the Committee, other than matters relating to the compensation of Directors, that member shall alert the Chairman. If the Chairman of the Committee faces a potential or actual conflict of interest, he or she shall advise the Chairman of the Board. The Committee member faced with such conflict shall disclose to the Committee his or her interest and shall not participate in consideration of the matter and shall not vote on the matter.

5.6

Invitees

Subject to Section 5.4, the Committee may invite Directors, officers and employees of Amaya or any other person to attend meetings of the Committee to assist the discussion and examination of the matters under consideration by the Committee. The External Auditor shall receive notice of each meeting of the Committee and shall be entitled to attend any such meeting at Amaya’s expense.

5.7

Minutes

Minutes of the proceedings of the Committee shall be kept. The minutes of the Committee meetings shall accurately record the discussions of and decisions made by the Committee, including all recommendations to be made by the Committee to the Board and shall be distributed to all Committee members and will be made available to the other Directors of the Board. The minutes shall be made available to the Directors for consultation and shall be approved by the Board before being included in Amaya’s registers or records.

5.8	Regular Reporting

The Committee will report through the Chairman to the Board following meetings of the Committee on matters considered by the Committee, its activities and compliance with this Charter.

6.	AUTHORITY OF COMMITTEE

6.1	Register and Record

The Committee, in the performance of its duties, may consult any relevant register or record of Amaya.

6.2	Retaining and Compensating Advisors

The Committee shall have the authority to engage independent counsel and other advisors as the Committee may deem appropriate in its sole discretion and to set and pay the compensation for any advisors employed by the Committee at the expense of Amaya. The Committee shall not be required to obtain the approval of the Board in order to retain or compensate such consultants or advisors.

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6.3	Subcommittees

The Committee may form and delegate authority to subcommittees if deemed appropriate by the Committee.

6.4	Recommendations to the Board

The Committee shall have the authority to make recommendations to the Board, but shall have no decision-making authority other than as specifically contemplated in this Charter.

7.	REMUNERATION OF COMMITTEE MEMBERS

7.1	Remuneration of Committee Members

Members of the Committee and the Chairman shall receive such remuneration for their service on the Committee as the Board may determine from time to time.

7.2	Directors’ Fees

No member of the Committee may earn fees from Amaya or any of its subsidiaries other than Directors’ fees (which fees may include cash and/or shares or options or other in-kind consideration ordinarily available to Directors, as well as all of the regular benefits that other Directors receive). For greater certainty, no member of the Committee shall accept, directly or indirectly, any consulting, advisory or other compensatory fee from Amaya or any of its subsidiaries.

SPECIFIC DUTIES AND RESPONSIBILITIES

8.	INTEGRITY OF FINANCIAL STATEMENTS

8.1	Review and Approval of Financial Information

(a)

Annual Financial Statements. The Committee shall review and discuss with Management and the External Auditor, Amaya’s audited annual financial statements and related MD&A together with the report of the External Auditor thereon and, if appropriate, recommend to the Board that it approve the audited annual financial statements.

(b)

Interim Financial Statements. The Committee shall review and discuss with Management and the External Auditor and, if appropriate, approve, Amaya’s quarterly unaudited financial statements and related MD&A.

(c)

Material Public Financial Disclosure. The Committee shall discuss with Management and the External Auditor:

(i)

the types of information to be disclosed and the type of presentation to be made in connection with earnings press releases;

(ii)

financial information and earnings guidance (if any) provided to the investment community, including analysts and rating agencies; and

(iii)

press releases containing financial information (paying particular attention to any use of “pro forma” or “adjusted” non-GAAP or non-IFRS information, as applicable).

(d)

Procedures for Review. The Committee shall be satisfied that adequate procedures are in place for the review of Amaya’s disclosure of financial information extracted or derived from Amaya’s financial statements (other than financial statements, MD&A and earnings press releases, which are dealt with elsewhere in this Charter) and shall periodically assess the adequacy of those procedures.

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(e)

General. The Committee shall review and discuss with Management and the External Auditor:

(i)

major issues regarding accounting principles and financial statement presentations, including any significant changes in Amaya’s selection or application of accounting principles;

(ii)

major issues as to the adequacy of Amaya’s internal controls over financial reporting and any special audit steps adopted in light of material control deficiencies;

(iii)

analyses prepared by Management and/or the External Auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP or IFRS methods, as applicable, on the financial statements;

(iv)

the effect on Amaya’s financial statements of regulatory initiatives, as well as off-balance sheet transactions structures, obligations (including contingent obligations) and other relationships of Amaya with unconsolidated entities or other persons that have a material current or future effect on the financial condition, changes in financial condition, results of operations, liquidity, capital resources, capital reserves or significant components of revenues or expenses of Amaya;

(v)

the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented;

(vi)

any financial information or financial statements in prospectuses and other offering documents;

(vii)

the Management certifications of the financial statements as required by applicable securities laws in Canada or otherwise;

(viii)

any other relevant reports or financial information submitted by Amaya to any governmental body, or the public; and

(ix)

funding and financial statements of Amaya’s pension or 401k plans, if any.

9.	EXTERNAL AUDITOR

9.1	External Auditor

(a)

Authority with Respect to External Auditor. The Committee shall be responsible for making recommendations to the Board and to Amaya’s shareholders regarding the appointment and compensation of the External Auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for Amaya. In the discharge of this responsibility, the Committee shall:

(i)

have sole responsibility for recommending to the Board the audit firm to be proposed to Amaya’s shareholders for appointment as External Auditor for the above-described purposes as well as the responsibility for recommending such External Auditor’s compensation and determining at any time whether the Board should recommend to Amaya’s shareholders whether the incumbent External Auditor should be removed from office;

(ii)

review the terms of the External Auditor’s engagement, discuss the audit fees with the External Auditor and be solely responsible for approving such audit fees; and

(iii)

require the External Auditor to confirm in its engagement letter each year that the External Auditor is accountable to the Board and the Committee as representatives of shareholders.

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(b)

Independence. The Committee shall satisfy itself as to the independence of the External Auditor. As part of this process, the Committee shall:

(i)

assure the regular rotation of the lead audit partner if required by law and consider whether, in order to ensure continuing independence of the External Auditor, Amaya should rotate periodically, the audit firm that serves as External Auditor;

(ii)

require the External Auditor to submit on a periodic basis to the Committee, a formal written statement delineating all relationships between the External Auditor and Amaya and that the Committee is responsible for actively engaging in a dialogue with the External Auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the External Auditor and for recommending that the Board take appropriate action in response to the External Auditor’s report to satisfy itself of the External Auditor’s independence;

(iii)

unless the Committee adopts pre-approval policies and procedures, approve any non-audit services provided by the External Auditor and may delegate such approval authority to one or more of its independent members who shall report promptly to the Committee concerning their exercise of such delegated authority; and

(iv)

review and approve the policy setting out the restrictions on Amaya hiring partners, employees and former partners and employees of Amaya’s current or former External Auditor.

(c)

Issues between External Auditor and Management. The Committee shall:

(i)

review any problems experienced by the External Auditor in conducting the audit, including any restrictions on the scope of the External Auditor’s activities or access to requested information;

(ii)

review any significant disagreements with Management and, to the extent possible, resolve any disagreements between Management and the External Auditor; and

(iii)

review with the External Auditor:

(A)

any accounting adjustments that were proposed by the External Auditor, but were not made by Management;

(B)

any communications between the audit team and audit firm’s national office respecting auditing or accounting issues presented by the engagement;

(C)

any Management or internal control letter issued, or proposed to be issued by the External Auditor to Amaya; and

(D)

the performance of Amaya’s internal audit function and internal auditors (if any).

(d)

Non-Audit Services.

(i)

The Committee shall either:

(A)

pre-approve any non-audit services provided by the External Auditor or the external auditor of any subsidiary of Amaya to Amaya (including its subsidiaries) before they are performed; or

(B)

adopt specific policies and procedures for the pre-approval of non-audit services, provided that such pre-approval policies and procedures are detailed as to the particular service and do not include any prohibited non-audit services, the Committee is informed of each non-audit service actually performed and the procedures do not include delegation of the Committee’s responsibilities to Management.

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(ii)

The Committee may delegate to one or more members of the Committee the authority to pre-approve non-audit services in satisfaction of the requirement in the previous section, provided that such member or members must present any non-audit services so approved to the full audit committee at its first scheduled meeting following such pre-approval.

(iii)

The Committee shall instruct Management to promptly bring to its attention any services performed by the External Auditor which were not recognized by Amaya at the time of the engagement as being non-audit services.

(e)

Evaluation of External Auditor. The Committee shall evaluate the External Auditor each year, and present its conclusions to the Board. In connection with this evaluation, the Committee shall:

(i)

review and evaluate the performance of the lead partner of the External Auditor;

(ii)

obtain the opinions of Management and of the persons responsible for Amaya’s internal audit function with respect to the performance of the External Auditor; and

(iii)

obtain and review a report by the External Auditor describing:

(A)

the External Auditor’s internal quality-control procedures;

(B)

any material issues raised by the most recent internal quality-control review, or peer review, of the External Auditor’s firm or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the External Auditor’s firm, and any steps taken to deal with any such issues; and

(C)

all relationships between the External Auditor and Amaya (for the purposes of assessing the External Auditor’s independence).

(f)

Review of Management’s Evaluation and Response. The Committee shall:

(i)

review Management’s evaluation of the External Auditor’s audit performance;

(ii)

review the External Auditor’s recommendations, and review Management’s response to and subsequent follow-up on any identified weaknesses;

(iii)

receive regular reports from Management and receive comments from the External Auditor, if any, on:

(A)

Amaya’s principal financial risks;

(B)

the systems implemented to monitor those risks; and

(C)

the strategies (including hedging strategies) in place to manage those risks; and

(iv)

recommend to the Board whether any new material strategies presented by Management should be considered appropriate and approved.

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10.

INTERNAL CONTROL AND AUDIT FUNCTION

10.1	Internal Control and Audit

In connection with Amaya’s internal audit function, the Committee shall:

(a)

review the terms of reference of the internal auditor (if any) and meet with the internal auditor (if any) as the Committee may consider appropriate to discuss any concerns or issues;

(b)

in consultation with the External Auditor and the internal audit group, review the adequacy of Amaya’s internal control structure and procedures designed to ensure compliance with applicable laws and regulations and any special audit steps adopted in light of material deficiencies and controls;

(c)

review Management’s response to significant internal control recommendations of the internal audit group and the External Auditor;

(d)

review (i) the internal control report prepared by Management, including Management’s assessment of the effectiveness of Amaya’s internal control structure and procedures for financial reporting and (ii) the External Auditor’s attestation, and report, on the assessment made by Management;

(e)

instruct the External Auditor to prepare an annual evaluation of Amaya’s internal audit group and reviewing the results of that evaluation; and

(f)

periodically review with the internal audit group and/or internal auditor (if any) any significant difficulties, disagreements with Management or scope restrictions encountered in the course of the work of the internal auditor (if any).

11.

OTHER

11.1	Risk Assessment and Risk Management

The Committee shall discuss Amaya’s major financial risk exposure and the steps Management has taken to monitor and control such exposures.

11.2	Related Party Transactions

The Committee shall review and approve all related party transactions in which Amaya is involved or which Amaya proposes to enter into.

11.3	Expense Accounts

The Committee shall review and make recommendations with respect to expense accounts, on an annual basis, submitted by the President and Chief Executive Officer, and expense account policy, and rules relating to the standardization of the reporting on expense accounts.

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11.4	Whistle Blowing

The Committee shall put in place procedures for:

(a)

the receipt, retention and treatment of complaints received by Amaya regarding accounting, internal accounting controls or auditing matters; and

(b)

the confidential, anonymous submission by employees of Amaya of concerns regarding questionable accounting or auditing matters.

12.

ANNUAL PERFORMANCE EVALUATION

On an annual basis, the Committee shall follow the process established by the Board for assessing the performance of the Committee.

13.

CHARTER REVIEW AND DISCLOSURE

The Committee shall review and assess the adequacy of this Charter annually and recommend to the Board any changes it deems appropriate. The Committee shall ensure that this Charter is disclosed in accordance with all applicable securities laws or other regulatory requirements.

June 30, 2014.

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LOGO

EX-99.6

Exhibit 99.6

LOGO

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED

DECEMBER 31, 2014

March 30, 2015

TABLE OF CONTENTS


MANAGEMENT’S DISCUSSION AND ANALYSIS		1

CAUTION REGARDING FORWARD-LOOKING STATEMENTS		1

OVERVIEW		2

OUTLOOK		5

BASIS OF PRESENTATION		6

SELECTED FINANCIAL INFORMATION		6

FINANCIAL CONDITION		6

SUMMARY OF QUARTERLY RESULTS		8

DISCUSSION OF OPERATIONS		9

LIQUIDITY AND CAPITAL RESOURCES		10

CASH FLOWS BY ACTIVITY		17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES		18

RECENT ACCOUNTING PRONOUNCEMENTS		29

OFF BALANCE SHEET ARRANGEMENTS		31

OUTSTANDING SHARE DATA		31

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING		31

BUSINESS RISKS AND UNCERTAINTIES		32

FURTHER INFORMATION		36

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following Management’s Discussion and Analysis (“MD&A”) provides a review of the results of operations, financial condition and cash flows for Amaya Inc. (“Amaya”, the “Corporation”, “we”, “us” or “our”), on a consolidated basis, for the year ended December 31, 2014. This document should be read in conjunction with the information contained in the Corporation’s audited consolidated financial statements and related notes for the year ended December 31, 2014, and with the audited consolidated financial statements and related notes for the year ended December 31, 2013 and the MD&A thereon. All financial information presented in this MD&A was prepared in accordance with International Financial Reporting Standards (“IFRS”), in each case, unless otherwise stated. The consolidated financial statements and additional information regarding the business of the Corporation are available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and on the Corporation’s website at www.amaya.com.

For reporting purposes, the Corporation prepares consolidated financial statements in Canadian dollars and in conformity with IFRS. Unless otherwise indicated, all dollar (“$”) amounts in this MD&A are expressed in Canadian dollars. References to ‘‘EUR’’ or “€” are to European Euros, references to “GBP” are to Great Britain Pounds Sterling, and references to ‘‘USD’’ are to U.S. dollars. All references to a specific “note” refers to the notes to the audited consolidated financial statements of the Corporation for the year ended December 31, 2014. As used in this MD&A, EBITDA is defined by the Corporation as earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, and stock-based compensation. EBITDA is a non-IFRS measure.

In preparing this MD&A, we have taken into account information available to us up to March 30, 2015, the date of this MD&A, unless otherwise stated.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains certain information that may constitute forward-looking information within the meaning of applicable securities laws, which Amaya refers to in this MD&A as forward-looking statements. These statements reflect Amaya’s current expectations related to future events or its future results, performance, achievements, business prospects or opportunities and products and services development, and future trends affecting the Corporation. All such statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “would”, “should”, “believe”, “objective”, “ongoing” or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the “Risk Factors and Uncertainties” section of Corporation’s Annual Information Form for the year ended December 31, 2014 (the “Annual Information Form”), which is available on SEDAR at www.sedar.com: the heavily regulated industry in which the Corporation carries on business; online gaming generally; current and future legislation with respect to online gaming or generally in jurisdictions where the Corporation is currently doing business or intends to do business; potential changes to the gaming regulatory scheme; legal and regulatory requirements; significant barriers to entry; competition; ability to develop commercially viable solutions, products or services; impact of inability to complete future acquisitions, integrate businesses successfully or ability to generate synergies; ability to develop and enhance existing solutions; risks of foreign operations generally; protection of proprietary technology and intellectual property rights; lengthy and variable sales cycle; ability to recruit and retain management and other qualified personnel; defects in the Corporation’s solutions, products or services; losses due to fraudulent activities; impact of currency fluctuations; management of growth; contract awards; service interruptions of Internet service providers; ability of Internet infrastructure to meet applicable demand; systems, networks or telecommunications failures or cyber-attacks; regulations that may be adopted with respect to the Internet and electronic commerce; refinancing risks; customer and operator preferences and changes in the economy; changes in ownership of customers or consolidation within the

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gaming industry; litigation costs and outcomes; expansion into new gaming markets; relationships with distributors; access to financing on reasonable terms; and natural events. These factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those expressly or impliedly expected or estimated in such statements. Shareholders and investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Although the Corporation cautions that the foregoing list of significant risk factors, as well as those risk factors presented under the heading “Risk Factors and Uncertainties” in the Annual Information Form and elsewhere in this MD&A and the Annual Information Form, are not exhaustive, shareholders and investors should carefully consider them and the uncertainties they represent and the risks they entail. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. Unless otherwise indicated by the Corporation, forward-looking statements in this MD&A and the Annual Information Form describe Amaya’s expectations as of March 30, 2015 and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements, except in accordance with applicable securities laws.

OVERVIEW

Amaya is a leading provider of technology-based solutions, products and services in the global gaming and interactive entertainment industries. Through its two reportable segments, Business-to-Consumer (“B2C”) and Business-to-Business (“B2B”), Amaya is focused on developing, operating and acquiring interactive technology-based assets with high-growth potential in existing and new markets and industries or verticals. Amaya’s B2C business currently consists of the operations of Amaya Group Holdings (IOM) Limited (formerly known as Oldford Group Limited) and its subsidiaries (collectively, “Rational Group”), which, among other things, currently offer online and mobile real- and play-money poker and other gaming products, including casino and sports betting (also known as sportsbook), as well as certain live poker tours and events, branded poker rooms in popular casinos in major cities around the world and poker programming for television and online audiences. Amaya’s B2B business currently consists of the operations of certain of its subsidiaries, which offer interactive, land-based and lottery gaming solutions. Amaya strives to not only improve and expand upon its current offerings, including its portfolio of what it believes to be high-growth interactive technology-based assets, but to pursue and capitalize on new global growth opportunities. Amaya seeks to take advantage of technology to provide gaming and interactive entertainment to large networks of customers.

B2C

Since the acquisition of the Rational Group on August 1, 2014 (the “Rational Group Acquisition”), Amaya’s primary business has been its B2C segment, which currently generates the vast majority of Amaya’s revenues and profits. Based in the Isle of Man and operating globally, Rational Group owns and operates gaming and related interactive entertainment businesses, which it offers under several owned brands, including, among others, PokerStars, Full Tilt, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in popular casinos around the world and poker programming created for television and online audiences. In addition to expanding its existing real- and play-money poker businesses into new markets, Rational Group has recently targeted growth into other online gaming verticals, notably casino and sportsbook.

Rational Group’s primary brands are PokerStars and Full Tilt, each of which provides a distinct online gaming platform. Currently, according to online poker tracking site Pokerscout.com, the PokerStars and Full Tilt sites collectively hold a majority of the global market share of real-money poker player liquidity, or the volume of people playing as measured by average daily seated ring game real money poker players, and are among the leaders in play-money poker player liquidity. Since its 2001 launch, PokerStars has become the world’s largest real money online poker site based on, among other things, player liquidity, according to Pokerscout.com, and the Corporation believes that it has distinguished itself as one of the world’s premier poker brands.

B2B

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gaming operators and governmental agencies and bodies, and ultimately indirectly to end-users and consumers. Amaya’s B2B solutions are designed to provide end-users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, all of which is intended to improve the profitability, productivity, security and brands of the operators. Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions, including Amaya (Alberta) Inc. (formerly Chartwell Technology Inc.), acquired in July 2011, and CryptoLogic Ltd. (“CryptoLogic”), acquired in April 2012, Cadillac Jack Inc. (“Cadillac Jack”), acquired in November 2012, and Diamond Game Enterprises (“Diamond Game”), acquired in February 2014, all of which provide technology, content and services to a diversified base of customers in the regulated gaming industry. As of the date of this MD&A, and as previously announced with respect to certain subsidiaries, Amaya and its management (“Management”) have initiated a strategic review process to explore the divestiture of these B2B assets. The fundamental objective of this review is to expedite the Corporation’s overall business strategy and maximize shareholder value. There can be no assurance that the Corporation’s strategic review process will result in the consummation of any specific action. See “Overview—Recent Highlights—B2B Assets Review” below.

Recent Highlights

Set forth below is a general summary of certain recent corporate highlights, developments and announcements. For additional corporate developments and announcements for the reporting period and up to the date hereof, see the disclosure under the heading “General Development of the Business” in the Annual Information Form.

B2B Assets Review

As previously announced, Amaya is exploring strategic opportunities to divest its B2B business and to use the proceeds to repay outstanding indebtedness or repurchase the Corporation’s common shares (“Common Shares”) pursuant to the 2015 NCIB (as defined below). The fundamental objective of the B2B assets review is to expedite the Corporation’s overall business strategy and maximize shareholder value. In furtherance of its B2B assets review and overall business strategy, the Corporation completed its sale of Ongame Network Ltd (“Ongame”) to NYX Gaming Group Limited (TSXV: NYX) (“NYX Gaming Group”) in the fourth quarter of 2014, as detailed below, and announced the Innova Offering (as defined below) on March 26, 2015 and the CJ Sale (as defined below) on March 30, 2015.

On March 30, 2015, Amaya announced that it entered into a definitive agreement to sell Cadillac Jack (the “CJ Sale”) for approximately $476 million comprising cash consideration of $461 million, subject to adjustment, and a $15 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, Amaya anticipates closing the CJ Sale in 2015. Amaya anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Credit Facilities, Senior Facility and Mezzanine Facility (each as defined below).

UK Licenses

On March 20, 2015, Amaya announced that it received licenses from the UK Gambling Commission for PokerStars and Full Tilt to operate online poker and other gaming offerings within the United Kingdom. Since late 2014, the brands had been operating under temporary continuation licenses, and prior to that, they were white-listed under applicable Isle of Man gaming licenses.

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Cross Currency Swap Agreements

On March 16, 2015, Amaya announced that it entered into cross currency swap agreements (the “Swap Agreements”) that it anticipates will result in lower interest payments on existing debt and mitigate the impact of fluctuations in the Euro to USD exchange rate. The Swap Agreements allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% (a simple average of the different interest rates for the various Swap Agreements) to replace the USD interest payments bearing a minimum floating interest rate of 5.0% (USD 3 month LIBOR plus a 4.0% margin, with a LIBOR floor of 1.0%) related to the USD$1.75 billion seven-year first lien term loan secured by Amaya on August 1, 2014 to finance a portion of the Rational Group Acquisition. The interest and principal payments for the Swap Agreements, which mature in five years, will be made at a Euro to USD forex rate of 1.1102 on USD notional amounts of $1.74125 billion.

Italian Tax Matter

On March 11, 2015, Amaya commented on a tax dispute between a subsidiary of Rational Group and Italian tax authorities related to operations of such subsidiary, particularly under the PokerStars brand, in Italy prior to the Rational Group Acquisition. Amaya was aware of the dispute prior to Rational Group Acquisition, but believes Rational Group has operated in compliance with the applicable local tax regulations and has paid €120 million in local taxes during the period subject to the dispute. The merger agreement related to the transaction provides remedies to address certain income tax and other liabilities that might occur post-closing but stemming from operations prior to the date of acquisition, including monies held in escrow as initial sources for indemnification. Amaya does not anticipate that these tax issues would apply to future fiscal periods.

2015 NCIB

On February 13, 2015, Amaya announced that the Toronto Stock Exchange (the “TSX”) approved its notice of intention to make a normal course issuer bid (“2015 NCIB”) to purchase for cancellation up to 6,644,737 Common Shares, representing approximately 5% of Amaya’s issued and outstanding as of January 26, 2015. The Corporation may purchase the Common Shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or by such other means as may be permitted by the TSX rules and policies. The Corporation will determine in its sole discretion from time to time the actual number of Common Shares that it will purchase and the timing of any such purchases. In accordance with the applicable TSX rules, daily purchases under the 2015 NCIB may not exceed 161,724 Common Shares, representing 25% of the average daily trading volume of the Common Shares for the six-month period ended on January 31, 2015, and the Corporation may make, once per calendar week, a block purchase of Common Shares not owned, directly or indirectly, by insiders of Amaya that exceeds the daily repurchase restriction. The 2015 NCIB commenced on February 18, 2015 and will remain in effect until the earlier of February 17, 2016 or the date on which the Corporation has purchased the maximum number of Common Shares permitted under the 2015 NCIB. Amaya is making the 2015 NCIB because it believes that, from time to time, the prevailing market price of its Common Shares may not reflect the underlying value of the Corporation, and that purchasing Common Shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders. As of March 30, 2015, the Corporation has not purchased any Common Shares pursuant to the 2015 NCIB, and has been under its routine quarterly blackout period since the 2015 NCIB period began.

Ongame Sale

In furtherance of its overall business strategy, pursuant to a sale and transfer agreement (the “Ongame Sale and Transfer Agreement”), Amaya sold Ongame to NYX Gaming (Gibraltar) Limited, a wholly-owned subsidiary of NYX Gaming Group, for a purchase price equal to the sum of (i) US$1.00 (paid at the closing), plus (ii) an amount equal to eight times Ongame’s EBITDA for the year ending December 31, 2015, less any required working capital adjustments. The purchase price is only payable in 2016 upon determination of such amount based on Ongame’s 2015 year-end EBITDA, as calculated in accordance with the Ongame Sale and Transfer Agreement. In connection with this divestiture, Amaya and NYX Gaming Group entered into a strategic investment transaction pursuant to which NYX Gaming Group issued, and Amaya purchased, a $10.0 million unsecured convertible debenture on November 17, 2014 which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. At Amaya’s option, both interest and principal are payable in ordinary shares of NYX Gaming Group at any time prior to the maturity date of November 17, 2016. Amaya subsequently assigned an aggregate of $1.0 million of the unsecured convertible debenture to four individuals.

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Concurrently with the completion of the sale of Ongame, Amaya entered into a right of first offer agreement with NYX Gaming Group (the “Right of First Offer”) pursuant to which Amaya granted NYX Gaming Group a right of first offer to purchase the B2B online casino business operated by each of Cryptologic and Amaya (Alberta) Inc. The Right of First Offer expires on December 30, 2015.

Ongame is classified as discontinued operations for all periods in the MD&A and financial statements for the year ended December 31, 2014.

OUTLOOK

Since the Rational Group Acquisition in August 2014 and as a result thereof, Amaya has become the world’s largest publicly traded online gaming company, with its B2C segment, including the PokerStars and Full Tilt brands, being its primary business and source of revenue. With what it believes to be a premier, scalable platform that diversifies its products and services both geographically and across verticals, Amaya currently expects that the Rational Group Acquisition will help facilitate an increase in shareholder value and the delivery of sustainable, profitable long-term growth.

Currently, according to online poker tracking site Pokerscout.com, the PokerStars and Full Tilt sites collectively hold a majority of the global market share of real-money poker player liquidity, or the volume of people playing multiplied by the dollars wagered as measured by average daily seated ring game real money poker players, and are among the leaders in play-money poker player liquidity. Since its 2001 launch, PokerStars has become the world’s largest real money online poker site based on, among other things, the number of players and player liquidity, according to Pokerscout.com, and the Corporation believes that it has distinguished itself as one of the world’s premier poker brands. In addition, Amaya is continuously developing its proprietary platforms and has invested significantly in its technology infrastructure since inception to ensure a positive experience for its customers, not only from a gameplay perspective with respect to its B2C business, but most importantly with respect to security and integrity across business segments and verticals. To support Amaya’s strong reputation for security and integrity, Amaya employs what it believes to be industry-leading practices and systems with respect to various aspects of its technology infrastructure, including payment security, game integrity, customer fund protection, marketing and promotion, customer support, responsible gaming and VIP rewards and loyalty programs. Further, Amaya dedicates a major portion of its research and development investments to its B2C business, which seeks to provide broad market applications for products derived from its technology base.

Amaya, through certain of its subsidiaries, is licensed or legally operates under third party licenses, as applicable, in various jurisdictions throughout the world, including the Isle of Man, Malta, Estonia, Spain, Greece, Denmark, Belgium, France, Italy, the United Kingdom and Bulgaria. Amaya seeks to ensure that it obtains all permits, authorizations, registrations and/or licenses necessary to manufacture, distribute and offer its solutions, products and services, as applicable in the jurisdictions in which it carries on business globally and where it is otherwise required to do so. In addition to expected organic growth in online and mobile poker in existing and new markets, however, Amaya believes that there are potentially significant opportunities for growth in new verticals. Specifically, Amaya believes that these new verticals initially include online and mobile casino and sportsbook, and such potential opportunities include the ability to leverage its brand recognition and capitalize on cross-selling these new verticals to its existing customer base, as well as to new customers. In addition to online and mobile casino and sportsbook, Amaya currently intends to explore other growth opportunities, including, without limitation, expanding upon its current social gaming offering and pursuing opportunities in fantasy sports. With respect to online gaming, Amaya intends to seek licensure in all jurisdictions in which licensure is available and strives to be among the first of the licensed operators in newly regulated jurisdictions. For example, see “Regulatory Environment—Regulation of the B2C Business—United States” in the Annual Information Form.

Amaya also continues to focus on the creation of long-term shareholder value by building upon its existing strengths and expanding and strengthening its portfolio of products and services that the Corporation expects will deliver sustainable, profitable long-term growth. To do this, Amaya is undertaking a number of ongoing strategic initiatives, including: (i) strengthening and expanding its products and services and developing its intellectual property; (ii) expanding its geographical reach; and (iii) pursuing strategic acquisitions and divestitures. See “Business Strategy of the Corporation” in the Annual Information Form. With respect to its B2B business, Amaya is exploring strategic opportunities to divest its B2B business and to use the proceeds to repay outstanding indebtedness or repurchase the Corporation’s Common Shares pursuant to the 2015 NCIB. There can be no assurance as to if and when this divestiture will occur. Pending its strategic review of its B2B business, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth by, among other

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things, increasing its market share through facilitating the delivery of gaming content across physical and interactive media through its B2B business, strengthening and expanding its existing portfolio of developed and acquired technologies and expanding its geographical reach.

BASIS OF PRESENTATION

The following information and comments are intended to provide a review and analysis of the Corporation’s operational results and financial position for the year ended December 31, 2014, as compared to the prior year ended on December 31, 2013. This MD&A should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2014 and 2013. Such consolidated financial statements, and the respective notes thereto, have been prepared in accordance with IFRS, and the information contained here is stated as of December 31, 2014, in each case, unless otherwise stated.

SELECTED FINANCIAL INFORMATION


	For the year ended
(in $000’s, except per share data)	December 31, 2014			December 31, 2013			December 31, 2012
Total Revenue		688,222			145,892			76,435

Net Earnings (Loss)		(7,529	)		(29,173	)		(7,112	)

Net Earnings (Loss) from Continuing Operations		57,188			(4,765	)		(7,112	)

Basic Net Earnings (Loss) Per Common Share		(0.07	)		(0.33	)		(0.11	)

Diluted Net Earnings (Loss) Per Common Share		(0.07	)		(0.33	)		(0.11	)

Basic Net Earnings (Loss) from Continuing Operations Per Common Share		0.52			(0.05	)		(0.11	)

Diluted Net Earnings (Loss) from Continuing Operations per Common Share		0.41			(0.05	)		(0.11	)

Total Assets		7,167,028			440,831			349,074

Total Long-Term Financial Liabilities		3,962			200,948			140,949

Cash Dividends Declared Per Share		—			—			—

The Corporation’s growth in revenues during the year ended December 31, 2014, as compared to during the year ended December 31, 2013, was primarily a result of the revenues generated from the B2C operations, primarily through the PokerStars brand, which was acquired in August 2014 as a result of the Rational Group Acquisition. The Corporation’s net loss decreased in 2014 primarily as a result of the revenues generated from the B2C operations, primarily through the PokerStars brand, which was acquired in August 2014 as a result of the Rational Group Acquisition, offset by a loss from discontinued operations in connection with the sale of Ongame.

The Corporation’s growth in revenues during the year ended December 31, 2013, as compared to during the year ended December 31, 2012, was primarily a result of the incorporation of a full period of revenues generated from Cadillac Jack, Cryptologic and Ongame, which were all acquired in 2012. The Corporation’s net loss increased in 2013 primarily as a result of losses from its B2B interactive gaming solutions and partially as a result of substantial investments made to develop its B2B interactive gaming solutions in preparation for the launch of real money online gaming in the State of New Jersey in late November 2013.

FINANCIAL CONDITION

The Corporation’s asset base increase of approximately $6.70 billion was primarily the result of the Rational Group Acquisition, the sale of WagerLogic Malta Holdings Ltd. (“WagerLogic”) for aggregate gross proceeds of $62.50 million, the Credit Facilities, Senior Facility and the Mezzanine Facility. See also “Liquidity and Capital Resources” below.

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The Corporation evaluates revenue performance by both geographic area and revenue type. The following table sets out the proportion of revenue attributable to each of the legal gaming jurisdictions in which it sells its products, solutions and services for the years ended December 31, 2014 and 2013.


	For the year ended December 31,
	2014 $000’s		2013 $000’s
Americas		203,572		105,839
Europe		423,618		40,044
Rest of world		61,032		9

Total		688,222		145,892

The revenue increase in all geographic areas for the year ended December 31, 2014 as compared to the year ended December 31, 2013 was primarily attributable to the revenue generated by the B2C business, particularly the products and services offered under the PokerStars brand.

Although prior to the Rational Group Acquisition in August 2014 the vast majority of Amaya’s revenues in 2014 were generated by its B2B land-based and interactive gaming solutions, following the Rational Group Acquisition, the vast majority of its revenues were, and the Corporation expects its revenues to continue to be, generated by its client interface, online and mobile gaming platforms under the B2C business segment. Following the Rational Group Acquisition, the B2C revenues were generated almost entirely through the provision of real-money poker offerings, followed by casino play-money and casino offerings. For a description of the Corporation’s B2B assets strategic review, see “Overview—Recent Highlights—B2B Assets Review”.

For a summary of the risks that could affect the Corporation’s financial condition in the future, see “Business Risks and Uncertainties” below.

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SUMMARY OF QUARTERLY RESULTS


For the three months ended	31-Mar-13			30-Jun-13			30-Sep-13			31-Dec-13			31-Mar-14		30-Jun-14			30-Sep-14			31-Dec-14
(in $000’s, except per share data)
Revenue		34,995			35,230			38,585			37,083			39,542		41,083			238,959			368,638
Net Earnings (loss)		(7,441	)		(11,442	)		(3,466	)		(6,824	)		39,644		(2,895	)		(17,613	)		(26,666	)
Net Earnings (loss) from Continuing Operations		(578	)		(5,303	)		1,640			(524	)		45,356		5,744			26,416			(20,328	)
Basic Net Earnings (loss) per Common Share		(0.09	)		(0.13	)		(0.04	)		(0.08	)		0.42		(0.03	)		(0.15	)		(0.20	)
Diluted Net Earnings (loss) per Common Share		(0.09	)		(0.13	)		(0.04	)		(0.08	)		0.41		(0.03	)		(0.15	)		(0.20	)
Basic Net Earnings (loss) from Continuing Operations per Common Share		(0.01	)		(0.06	)		0.02			(0.01	)		0.48		0.06			0.22			(0.15	)
Diluted Net Earnings (loss) from Continuing Operations per Common Share		(0.01	)		(0.06	)		0.02			(0.01	)		0.47		0.06			0.16			(0.15	)

The increase in revenues during the quarters ended September 30, 2014 and December 31, 2014, as compared to the previous six quarters, was primarily attributable to the revenue generated by the B2C operations following the Rational Group Acquisition on August 1, 2014, and to the consolidation of results from the Corporation’s overall business as of that date.

The increase in revenues from the quarter ended September 30, 2014 to the quarter ended December 31, 2014 was primarily attributable to the consolidation of a full quarter of revenue generated by the B2C operations, as opposed to only two months of revenue generated by the B2C operations consolidated in the third quarter of 2014 following the Rational Group Acquisition on August 1, 2014. The sale of Ongame to NYX Gaming in the fourth quarter of December 31, 2014 also had an impact on the Corporation’s financial condition. See “Overview—Recent Highlights—Ongame Sale”.

Our results of operations can fluctuate due to seasonal trends and other factors. Historically, given the geographies where we operate and the majority of our customers are located, and the related climate and weather in such geographies, among other things, revenues from our B2C operations have been generally higher in the first and fourth fiscal quarters than in the second and third fiscal quarters. As such, results for any quarter are not necessarily indicative of the results that may be achieved in another quarter or for the full fiscal year. There can be no assurance that the seasonal trends and other factors that have impacted our historical results will repeat in future periods as we cannot influence or forecast many of these factors. For other factors that may cause our results to fluctuate, see “Business Risks and Uncertainties” below.

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DISCUSSION OF OPERATIONS

Revenue


	For the three-month period ended				For the year ended
	December 31, 2014 $000’s		December 31, 2013 $000’s		December 31, 2014 $000’s		December 31, 2013 $000’s
B2C*		338,897		—		547,221		—
Software licensing		3,695		11,201		21,055		46,996
Product sales		1,750		5,284		19,204		7,663
Participation leases and arrangements		23,895		19,520		97,543		77,026
Other		401		1,078		3,199		14,207

Total		368,638		37,083		688,222		145,892

*	The Corporation acquired the B2C business on August 1, 2014 pursuant to the Rational Group Acquisition. The B2C revenue is currently primarily generated through hosted poker.

Revenue for the three-month period ended December 31, 2014 was $368.64 million as compared to $37.08 million for the comparable prior year period, representing an increase of 894%. This increase was primarily attributable to (i) consolidating B2C revenue, primarily generated by PokerStars, with B2B revenue and (ii) consolidating Diamond Game revenue, partially offset by significant finance lease revenue earned during 2013.

Revenue for the year ended December 31, 2014 was $688.22 million as compared to $145.89 million for the year ended December 31, 2013, representing an increase of 372%. This increase was primarily attributable to (i) consolidating B2C revenue, primarily generated by PokerStars, with B2B revenue, and (ii) consolidating Diamond Game revenue, partially offset by (a) significant finance lease revenue earned during 2013, (b) WagerLogic hosted casino revenue earned during 2013 and (c) significant upfront software licensing fees earned during 2013.

Expenses

Selling

Sales and marketing expenses increased from $2.84 million for the three-month period ended December 31, 2013 to $62.96 million for the three-month period ended December 31, 2014, representing an increase of 2,118%. The increase was primarily the result of advertising expenses incurred by the B2C business during the three month period ended December 31, 2014.

Sales and marketing expenses increased from $13.73 million for the year ended December 31, 2013 to $101.49 million for the year ended December 31, 2014, representing an increase of 639%. The increase was primarily the result of advertising expenses incurred by the B2C business during the year ended December 31, 2014.

General and Administrative

General and administrative expenses increased from $29.69 million for the three-month period ended December 31, 2013 to $207.69 million for the three-month period ended December 31, 2014, representing an increase of 600%. The increase was primarily the result of (i) a growing employee base due to the acquisition of Diamond Game and the Rational Group Acquisition, (ii) gaming duty and processing costs incurred by the B2C business in connection with generating B2C revenues, (iii) impairments and losses on B2B redundant assets and (iv) increased amortization of purchase price allocated intangibles. The Corporation determined that a number of B2B-related intangible and tangible assets are redundant to its core operations, notably its B2C business. Impairment losses of approximately $6.13 million and a loss on disposal of assets of approximately $1.40 million were recognized in the fourth quarter of 2014.

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General and administrative expenses increased from $109.55 million for the year ended December 31, 2013, to $430.10 million for the year ended December 31, 2014, representing an increase of 293%. The increase was primarily the result of (i) a growing employee base due to the acquisition of Diamond Game and the Rational Group Acquisition, (ii) gaming duty and processing costs incurred by the B2C business in connection with generating B2C revenues, (iii) impairments and losses on B2B redundant assets and (iv) increased amortization of purchase price allocated intangibles. Impairment losses of approximately $15.17 million and a loss on disposal of assets of approximately $5.76 million were recognized in the year ended December 31, 2014.

Financial

Financial expenses increased from $6.16 million for the three month period ended December 31, 2013 to $72.92 million for the three month period ended December 31, 2014, representing an increase of 1,084%. This increase was primarily the result of interest incurred on the USD First Lien Term Loans, USD Second Lien Term Loans, Credit Facilities, Senior Facility and Mezzanine Facility (each as defined below) during the three month period ended December 31, 2014, as offset by unrealized gain on the re-valuation of the EUR First Lien Term Loan during the same period.

Financial expenses increased from $20.53 million for the year ended December 31, 2013 to $98.57 million for the year ended December 31, 2014, representing an increase of 380%. This increase was primarily the result of interest incurred on the USD First Lien Term Loans, USD Second Lien Term Loans, Credit Facilities, Senior Facility and Mezzanine Facility during the year ended December 31, 2014, as offset by unrealized gain on the re-valuation of the EUR First Lien Term Loan during the same period.

Acquisition Related Expenses

Acquisition related expenses increased from $1.33 million for the year ended December 31, 2013 to $22.39 million for the year ended December 31, 2014, representing an increase of 1,583%. This increase was primarily the result of an increase in underwriter fees and professional fees incurred in connection with the acquisition of Diamond Game and the Rational Group Acquisition during the year ended December 31, 2014.

Current and Deferred Income Tax

Current income taxes decreased from $10.0 million for the year ended December 31, 2013 to $8.64 million for the year ended December 31, 2014.

For the three month period ended December 31, 2014, the Corporation recognized deferred income tax expense of $26.33 million as compared to recognized deferred income tax expense of $2.86 million for the comparable prior year period. This increase was primarily attributable to movements in the valuation allowance in respect of deferred tax assets during the year.

LIQUIDITY AND CAPITAL RESOURCES

Based on the Corporation’s current revenue and continued growth expectations, primarily from its B2C business, the funds available from the Corporation’s private placement of debt and shares and the funds available from its existing its USD$100 million five-year first lien revolving credit facility, Management believes that the Corporation will have the cash resources to satisfy current working capital needs, fund development activities and other capital expenditures for at least the next 12 months.

Moreover, Management is of the opinion that investing is a key element necessary for the continued growth of the Corporation’s customer base and the future development of new and innovative products and solutions. The state of capital markets may influence the Corporation’s ability to secure the capital resources required to fund future projects and support growth.

The Corporation is exposed to liquidity risk with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities. The Corporation’s objective is to maintain a balance between continuity of funding and flexibility through borrowing facilities available through the Corporation’s banks and other lenders. The Corporation’s policy is to seek to ensure adequate funding is available from operations, established lending facilities and other sources as required.

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December 31, 2014	On Demand $000’s		Less Than 1 year $000’s		2-5 years $000’s		More Than 5 years $000’s

Accounts payable and accrued liabilities		178,990		—		—		—
Other payables		210,620		2,127		5,042		522
Provisions		46,479		—		410,830		241
Customer deposits		699,966		—		—		—
Income tax payable		32,966		—		—		—
Long-term debt*		—		254,237		1,954,151		2,863,667

Total		1,070,021		256,364		2,370,023		2,866,330

*	Includes principal and interest.

Credit Facility

The Corporation’s credit facilities include an unsecured revolving demand credit facility of USD $100 million and a first lien revolving demand credit facility of $3 million, each of which can be used for general working capital purposes and other corporate purposes. The Corporation obtained these credit facilities on August 1, 2014 and they are priced at LIBOR plus 3.75% or ABR plus 2.75%, and mature on August 1, 2019. The applicable commitment fee on these revolving credit facilities is based on a leverage ratio of 3.75 to 1.00 and could range from 0.375% to 0.50%.

These credit facilities contain customary covenants, including, without limitation, maintenance covenants based on certain agreed-upon leverage ratios each of which the Corporation was in compliance with as of December 31, 2014.

The $3 million facility bears interest at the lender’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances, which as of December 31, 2014 equaled $ nil, the Corporation has provided the lender with a first lien security interest over all of the Corporation’s personal or otherwise movable property.

As at each of December 31, 2013 and December 31, 2014, the outstanding amount of the USD $100 million revolving unsecured demand credit facility equaled USD$ nil and as at December 31, 2014, the outstanding amount of the $3 million first lien revolving demand credit facility equaled $ nil.

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Long-Term Debt

The following is a summary of long-term debt outstanding at December 31, 2014 and December 31, 2013:


	In local denominated currency 000’s		December 31, 2014 $000’s		December 31, 2013 $000’s
USD First Lien Term Loan		1,745,625		1,956,220		—
USD Second Lien Term Loan		800,000		873,519		—
EUR First Lien Term Loan		199,500		271,388		—
Senior Facility (USD)		238,000		273,910		168,178
Mezzanine Facility (USD)		104,537		102,941		—
2013 Debentures (CAD)		30,000		28,020		26,323
Other long-debt term		—		—		686

Total long-term debt				3,505,998		195,187

Current portion				11,451		2,388

Non-current portion				3,494,547		192,799

2013 Debentures

On February 7, 2013, the Corporation closed a private placement of units, issuing and selling 30,000 units at a price of $1,000 per unit for aggregate gross proceeds of $30 million. Each unit consisted of (i) $1,000 principal amount of unsecured non-convertible subordinated debentures (the “2013 Debentures”) and (ii) 48 non-transferable Common Share purchase warrants (the warrant indenture was subsequently amended to provide for the warrants to be transferable and traded on the TSX). The 2013 Debentures bear interest at a rate of 7.50% per annum payable semi-annually in arrears on January 31 and July 31 in each year and commenced on July 31, 2013. The 2013 Debentures mature and are repayable on January 31, 2016. Each warrant entitles the holder thereof to acquire one Common Share at a price per Common Share equal to $6.25 at any time until January 31, 2016.

The Corporation has determined the fair value of the debt component of the units. At the time of issuance, the proceeds were allocated between the debt and the equity components using the residual method.


	December 31, 2014 $000’s
Fair value of liability component		26,844
Fair value of warrants		3,156
Face value		30,000

Transaction costs		1,831

During the year ended December 31, 2014, the Corporation incurred $3.95 million in interest, of which $1.70 million relates to interest accretion, as compared $3.13 million in interest during the year ended December 31, 2013, of which $1.12 million relates to interest accretion.

The following table sets forth the movements in the debt and equity components of the private placement of units recognized during the year ended December 31, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		30,000		25,206		2,963
Exercise of warrants		—		—		(1,634	)
Accretion of liability component (effective interest of 14.10%)		—		2,814		—

Balance at December 31, 2014		30,000		28,020		1,329

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The following table sets for the repayment obligations under the debt component of the private placement of units during the next two fiscal years:


	$000’s
2015		—
2016		30,000

Credit Facilities and Senior Facility

On December 20, 2013, Cadillac Jack entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack has access to term loans in an aggregate principal amount of up to USD $160 million (the “Credit Facilities”). The Credit Facilities replaced the existing USD $110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and the remaining amounts are being used to fund the ongoing working capital and other general corporate purposes. On May 15, 2014, Cadillac Jack obtained an incremental USD $80 million term loan to the Credit Facilities through an amendment thereto for the purpose of financing working capital expenses and general corporate purposes of the Corporation. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.5% with a 1% LIBOR floor (as amended, the “Senior Facility”). The Senior Facility will mature over a five-year term from the closing date and is secured by the stock of Cadillac Jack and the assets of Cadillac Jack and its subsidiaries. The Senior Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios, each of which the Corporation was in compliance with as of December 31, 2014. Amaya has provided an unsecured guarantee of the obligations under the Senior Facility in favor of the lenders.

During the year ended December 31, 2014, the Corporation incurred interest of $23.64 million, of which $2.32 million relates to interest accretion, as compared to $16.32 million during the year ended December 31, 2013, of which $5.97 million relates to interest accretion.


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		278,424			174,563
Repayment		(2,320	)		(4,387	)
Transaction costs		(4,417	)		(7,899	)
Accretion (effective interest rate of 9.90%)		2,328			5,965
Translation		(105	)		(64	)
Current portion (net of unamortized transaction costs of $740,000)		273,910			—

		(2,355	)		(1,702	)

		271,555			166,476

The principal repayments of the Senior Facility over the next five years amount to the following:


	$000’s
2015		2,784
2016		2,784
2017		2,784
2018		2,784
2019		264,968

Mezzanine Facility

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rate of 7% may instead be paid in-kind in lieu of cash. The Mezzanine Facility will mature over a 6-year term from the closing date and is unsecured. Amaya has provided an unsecured guarantee of the obligations under the Mezzanine Facility in favor of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios, each of which the Corporation was in compliance with as of December 31, 2014. In connection with the Mezzanine Facility, the Corporation granted the lenders 4,000,000 Common Share purchase warrants, entitling the holders thereof to acquire one Common Share per warrant at a price per Common Share equal to $19.17 at any time up to a period ending ten years after the closing date (see note 21).

During the year ended December 31, 2014, the Corporation incurred $10 million in interest of which $0.7 million relates to interest accretion and $5.01 million relates to paid in kind interest.


	December 31, 2014 $000’s
Fair value of liability component		99,597
Fair value of equity component		16,413
Face value		116,010

Transaction costs		3,082

The following table reflects movements recognized during the year ended December 31, 2014:


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		116,010		96,951		15,977
Paid in kind interest		—		5,011		—
Accretion of liability component (effective interest of 16.16%)		—		727		—
Translation		—		252		—

Balance at December 31, 2014		116,010		102,941		15,977

The principal repayments under the Mezzanine Facility over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		116,010

The Corporation currently anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Credit Facilities, Senior Facility and Mezzanine Facility. There can be no assurance as to if and when the CJ Sale will occur.

First and Second Lien Term Loans

On August 1, 2014, Amaya completed the Rational Group Acquisition, which was partly financed through the issuance of long term debt, allocated as follows:

First Lien Term Loans

The first lien term loans consist of a USD$1.75 billion seven-year first lien term loan priced at LIBOR plus 4.00% (the “USD First Lien Term Loan”) and a €200 million seven-year first lien term loan priced at Euribor plus 4.25% (the “EUR First Lien Term Loan” and, together with the USD First Lien Term Loan, the “First Lien Term Loans”), in each case with a 1.00% LIBOR and Euribor floor.

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The Corporation is required to allocate 50% of the excess cash flow of the Corporation to the principal repayment of the First Lien Term Loans. Excess cash flow is referred to as EBITDA of the Rational Group on a consolidated basis for such excess cash flow period (i.e., each fiscal year commencing with the fiscal year ending on December 31, 2015), minus, without duplication, debt service, capital expenditures, permitted business acquisitions and investments, taxes paid in cash, increases in working capital, cash expenditures in respect of swap agreements, any extraordinary, unusual or nonrecurring loss, income or gain on asset dispositions, and plus, without any duplication, decreases in working capital, capital expenditures funded with the proceeds of the issuance of debt or the issuance of equity, cash payments received in respect of swap agreements, any extraordinary, unusual or nonrecurring gain realized in cash and cash interest income to the extent deducted in the computation of EBITDA.

The percentage allocated to the principal repayment can fluctuate based on the following:

•

If the total secured leverage ratio at the end of the applicable excess cash flow period is less than or equal to 4.75 to 1.00 but is greater than 4.00 to 1.00, the repayments will be 25% of the excess cash flow.

•

If the total secured leverage ratio at the end of the applicable excess cash flow period is less than or equal to 4.00 to 1.00, the repayment will be 0% of the excess cash flow.

The agreement for the First Lien Term Loans restricts the Corporation from, among other things, incurring additional debt or granting additional liens on its assets and equity, distributing equity interests and distributing any assets to third parties.

During the year ended December 31, 2014, the Corporation incurred $46.24 million in interest of which $4.84 million relates to interest accretion in relation to the USD First Lien Term Loan.


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		2,030,175			—
Repayment		(5,075	)		—
Transaction costs		(71,365	)		—
Accretion (effective interest rate of 5.79%)		4,842			—
Translation		(2,357	)		—

		1,956,220			—
Current portion (net of unamortized transaction costs of $12,450,000)		(7,852	)		—

		1,948,368			—

The USD First Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		20,302
2016		160,043
2017		181,185
2018		193,165
2019+		1,470,405

During the year ended December 31, 2014, the Corporation incurred $7.04 million in interest, of which $0.65 million relates to interest accretion in relation to the EUR First Lien Term Loan.

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	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		280,767			—
Repayment		(702	)		—
Transaction costs		(9,562	)		—
Accretion (effective interest rate of 5.97%)		646			—
Translation		238			—

		271,388			—
Current portion (net of unamortized transaction costs of $1,564,000)		(1,244	)		—

		270,143			—

The EUR First Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,808
2016		22,133
2017		25,057
2018		26,714
2019+		203,353

USD Second Lien Term Loan

The second lien term loan consists of a USD$800 million eight-year loan priced at LIBOR plus 7.00%, with a 1.00% LIBOR floor repayable on August 1, 2022 (the “USD Second Lien Term Loan”). During the year ended December 31, 2014, the Corporation incurred $32.24 million in interest of which $1.97 million relates to interest accretion.


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		928,080			—
Transaction costs		(54,659	)		—
Accretion (effective interest rate of 9.07%)		1,965			—
Translation		(1,867	)		—

		873,519			—
Current portion (net of unamortized transaction costs of $nil)		—			—

		873,519			—

The USD Second Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		928,080

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CASH FLOWS BY ACTIVITY

The table below outlines a summary of cash inflows (outflows) by activity.


	For the three month period ended						For the year ended
	December 31, 2014 $000’s			December 31, 2013 $000’s			December 31, 2014 $000’s			December 31, 2013 $000’s
Operating activities		55,763			3,043			190,658			(60	)
Financing activities		(1,763	)		55,133			4,892,912			114,844
Investing activities		(1,001	)		(25,063	)		(4,780,594	)		(57,422	)

Cash Provided by (Used In) Operations

The Corporation generated positive cash flows from operating activities for the three-month period ended December 31, 2014. This was primarily the result of B2C revenue generated by the B2C business. Cash generated by operating activities for the three-month period ended December 31, 2014 was $55.76 million as compared to $3.04 million for the comparable prior year period.

The Corporation generated positive cash flows from operating activities for the year ended December 31, 2014. This is also primarily the result of B2C revenue generated by the B2C business. Cash generated by operating activities for the year ended December 31, 2014 was $190.66 million as compared to $(0.06) million for the nine-month period ending September 30, 2013.

Cash Provided by (Used In) Financing Activities

The cash used for financing activities for the three-month period ended December 31, 2014 and provided from financing activities for the three-month period ended December 31, 2013 was $1.76 million and $55.13 million, respectively. During the three-month period ended December 31, 2014, the primary expenditure affecting the cash used for financing activities was the repayment of debt. During the three-month period ended December 31, 2013, the Corporation primarily derived cash from financing activities through the Credit Facilities, Senior Facility and Mezzanine Facility that provided additional gross proceeds of $55 million during such period.

The cash provided from financing activities for the year ended December 31, 2014 and December 30, 2013 was $4,892.91 million and $114.84 million, respectively. During the year ended December 31, 2014, the Corporation derived cash from financing activities primarily through the proceeds from the (i) USD First Lien Term Loan and USD Second Lien Term Loan, (ii) issuance of Common Shares and the Corporation’s preferred shares (“Preferred Shares”) and (iii) Credit Facilities, Senior Facility and Mezzanine Facility. During the year ended December 31, 2013, the Corporation derived cash from financing activities primarily through the (i) private placement of debt for aggregate gross proceeds of $30 million, (ii) private placement of shares for aggregate gross proceeds of $40 million and (iii) the Credit Facilities, Senior Facility and Mezzanine Facility that provided additional gross proceeds of $55 million, partially offset by a share buyback of 660,800 Common Shares, each during the period.

Cash Provided by (Used In) Investing Activities

The use of cash in investing activities for the three-month period ended December 31, 2014 was $0.32 million as compared to $25.06 million for the comparable prior year period. During the three-month period ended December 31, 2014, the Corporation’s use of cash in investing activities primarily resulted from restricting cash for the Rational Group deferred payment and further investments in Diamond Game and Cadillac Jack revenue producing assets, offset by proceeds from the sale of investments. During the three-month period ended December 31, 2013, the Corporation’s use of cash in investing activities primarily resulted from (i) the continued investment in development of proprietary technology and gaming content, (ii) the deployment of Cadillac Jack revenue producing assets and (iii) an additional investment in The Intertain Group Ltd. (TSX: IT) (“Intertain”).

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The use of cash in investing activities for the year ended December 31, 2014 was $4,600.44 million as compared to $57.42 million for the year ended December 31, 2013. During the year ended December 31, 2014, the primary expenditure affecting the use of cash in investing activities was the Rational Group Acquisition. During the year ended December 31, 2013, the Corporation’s use of cash in investing activities primarily resulted from (i) the continued investment in development of proprietary technology and gaming content, (ii) the deployment of Cadillac Jack revenue producing assets and (iii) an additional investment in Intertain.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Corporation’s consolidated financial statements and all financial information presented in the MD&A, have been prepared in accordance with IFRS.

Principles of Consolidation

A subsidiary is an entity controlled by the Corporation. As such, the Corporation is exposed, or has rights, to variable returns from its involvement with such entity and has the ability to affect those returns through its current ability to direct such entity’s relevant activities (i.e., power over the investee).

The existence and effect of substantive potential voting rights that the Corporation has the practical ability to exercise (i.e., substantive rights) are considered when assessing whether the Corporation controls another entity.

The Corporation’s consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. With consolidation, all inter-entity transactions and balances have been eliminated.

Upon the loss of control of a subsidiary, the Corporation’s profit or loss on disposal is calculated as the difference between (i) the fair value of the consideration received and of any investment retained in the former subsidiary and (ii) the previous carrying amount of the assets (including any goodwill) and liabilities of the subsidiary and any non-controlling interests.

Discontinued Operations and Assets Held for Sale

Discontinued operations

These are either separate major lines of business or geographical operations that have been sold or classified as held for sale. When held for use, discontinued operations were a cash-generating unit or a group of cash-generating units. They comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Their results are presented separately in the statements of earnings on a comparative basis.

Non-current assets held for sale

A non-current asset (or disposal group) held for sale represents an asset whose carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the sale must be highly probable and the non-current asset (or disposal group) must be available for immediate sale in its present condition. The appropriate level of management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from its classification. Disposal groups and non-current assets held for sale are included in the consolidated statements of financial position at fair value less costs to sell, if such amount is lower than the previous carrying amount. Once an asset is classified as held for sale or included in a group of assets held for sale, no further depreciation or amortization is recorded.

Revenue Recognition

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

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•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

B2C Revenue

Revenue from the B2C operations consists primarily of online poker gaming revenue and is recognized when it is probable that the economic benefits will flow to the Corporation and the amount of revenue can be measured reliably. Revenue is recognized in the accounting periods in which the transactions occurred after deduction of certain offsets, such as promotional bonuses and frequent player points granted to customers, and is measured at the fair value of the consideration received or receivable.

Online poker gaming revenue represents the commission charged from each poker hand in ring games and entry fees for participation in poker tournaments. In poker tournaments, entry fee revenue is recognized when the tournament has concluded.

The B2C operations operate loyalty programs for its customers that award customer loyalty points based on amounts wagered. Management estimates the value of this liability using relevant historical information about the likelihood and magnitude of an outflow of resources.

B2B Revenue

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on the current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

Product sales

Revenue from product sales is recognized when the product is shipped to the customer and when there are no unfulfilled obligations of the Corporation that affect the customer’s final acceptance of the product pursuant to the arrangement. Any cost of warranties and remaining obligations that are inconsequential or perfunctory are accrued when the corresponding revenue is recognized.

Participation leases and arrangements

In contracts that stipulate profit sharing arrangements, revenues are earned based on revenue splits established in the contracts and can vary depending on the contracts. Revenues are recognized when performance has been achieved and collectability is reasonably assured.

Software licensing

Typically, license fees, including fees from master license agreements, most of which are contingent upon the licensee’s customer usage, are calculated as a percentage of each licensee’s level of activity. The percentage is as established in the contract and can vary depending on the particular contract and the terms thereof. The license fees are recognized on an accrual basis as earned.

Lease revenues

In the course of its normal business, the Corporation enters into lease agreements for its gaming equipment.

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Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Leases revenues are recognized on the same basis as revenues from product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statements of comprehensive income (loss).

Assets under operating leases are included in property and equipment. Lease income from operating leases is recognized on a straight-line basis over the term of the lease and is included in revenues in the statements of comprehensive income (loss).

Translation of Foreign Operations and Foreign Currency Transactions

Functional and presentation currency

IFRS requires entities to consider primary and secondary indicators when determining the functional currency. Primary indicators are closely linked to the primary economic environment in which the entity operates and are given more weight. Secondary indicators provide supporting evidence to determine an entity’s functional currency. Once the functional currency of an entity is determined, it should be used consistently, unless significant changes in economic factors, events and conditions indicate that the functional currency has changed.

A change in functional currency is accounted for prospectively from the date of the change by translating all items into the new functional currency using the exchange rate at the date of the change.

Based on an analysis of the primary and secondary indicators, the functional currency of each of the Corporation and its entities have been determined. The Corporation’s consolidated financial statements are presented in Canadian dollars.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of net earnings (loss).

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of the Corporation’s entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)

assets and liabilities for each statement of financial position presented are translated at the closing exchange rate on the date of that statement of financial position;

(ii)

income and expenses for each statement of net earnings (loss) and statement of other comprehensive income are translated at average exchange rates (unless such average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates at issue, in which case income and expenses are translated at the exchange rate on the dates of such transactions); and

(iii)

all resulting exchange rate differences are recognized in other comprehensive income (loss) and are transferred to net earnings as part of gain (loss) on the disposal of subsidiaries.

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The following functional currencies are referred to herein:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Great Britain Pound Sterling

Business Combination

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired entity are included in the consolidated statements of financial position at their respective fair values. Goodwill is recorded based on the excess of the fair value of the consideration transferred over the fair value of the Corporation’s interest in the acquiree’s net identifiable assets on the date of the acquisition. Any excess of the identifiable net assets over the consideration transferred is immediately recognized in net earnings.

The consideration transferred by the Corporation to acquire control of an entity is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred and equity interests issued by the Corporation, including the fair value of all the assets and liabilities resulting from a deferred payment arrangement. Acquisition related costs are expensed as incurred.

Operating Segments

Amaya has two reportable segments, its B2C segment and B2B segment. In the year ended December 31, 2014, the B2C segment consisted of Rational Group, while the B2B segment consisted of Amaya’s B2B interactive, land-based and lottery gaming solutions.

Amaya’s primary business is currently its B2C operations which were acquired on August 1, 2014 through the Rational Group Acquisition. The Corporation’s operating segments are organized around the markets they serve (i.e., B2C and B2B) and are reported in a manner consistent with the internal reporting provided to the Corporation’s Chairman and Chief Executive Officer, who serves as the Corporation’s chief operating decision-maker. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Corporation.

Financial Instruments

Financial assets

Financial assets are initially recognized at fair value and are classified either as “fair value through profit or loss”; “available-for-sale”; “held-to-maturity”; or “loans and receivables”. The classification depends on the purpose for which the financial instruments were acquired and their respective characteristics. Except in very limited circumstances, the classification may not be changed subsequent to initial recognition.

Fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or otherwise as determined by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period in profit or loss.

Available-for-sale

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rate method and is recognized in profit or loss. When a decline in fair value is determined to be “other-than-temporary”, the cumulative loss included in accumulated other comprehensive income (loss) is removed as such and then recognized in the profit or loss. Gains and losses realized on the disposal of available-for-sale assets are recognized in profit or loss. The Corporation has current and non-current investments classified as available-for-sale (see note 8).

Held-to-maturity and loans and receivables

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity dates for which an entity has the intention and ability to hold until maturity. Loans and receivables are non-derivative financial assets with fixed or determinable payments but which are not quoted in an active market. All such assets with maturities equal to or less than 12 months from the date of the consolidated statements of financial position are classified as current assets, while those with maturities greater than twelve months from such date are classified as non-current assets. Financial instruments classified as held-to-maturity and loans and receivables are initially recorded at fair value and subsequently measured at amortized cost using the effective interest method. None of the Corporation’s financial assets are held-to-maturity. Cash, restricted cash, receivables under finance leases, accounts receivable and promissory notes are classified as loans and receivables.

Impairment

At the end of each reporting period, the Corporation assesses whether a financial asset or a group of financial assets, other than those classified as fair value through profit or loss, is impaired. If there is objective evidence that impairment exists, the loss is recognized in profit or loss. The impairment loss is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss.

Financial liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method. The Corporation’s financial liabilities are classified as other liabilities.

Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “through profit or loss”) are added to or deducted, as applicable, from the fair value of the financial instrument on initial recognition. These costs are expensed to financial expenses on the consolidated statements of earnings (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to financial expenses on the consolidated statements of earnings (loss) in the period that the debt facility is retired. Transaction costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound financial instruments

Debt and equity instruments issued by the Corporation and its subsidiaries are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. The Corporation has issued, and in the future may issue, compound financial instruments comprising both financial liability and equity components. The financial liability component is initially recognized at the fair value of a similar liability. The proceeds are then allocated between the financial liability and the equity components using the residual method. Any directly attributable transaction costs are allocated to the financial liability and equity components in proportion to their initial carrying amounts. The financial liability component of a compound financial instrument is subsequently re-measured at amortized cost using the effective interest method. The equity components are not re-measured subsequent to their initial recognition.

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Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative and the combined instrument (i.e., the embedded derivative plus the host instrument) is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statements of earnings (loss).

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g., by the use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset or liability that market participants would take into account.

For the Corporation’s financial instruments which are recognized in the statements of financial position at fair value, the fair value measurements are categorized based on the lowest level input that is significant to the fair value measurement in its entirety and the degree to which the inputs are observable. The significance levels are classified as follows in the fair value hierarchy:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognized by the Corporation at the end of the reporting period during which the transfer occurred.

Inventory Valuation

Inventories are priced at the lower of cost and net realizable value. Cost is determined on a weighted average basis. The cost of inventories comprises all costs of purchase and other costs incurred in delivering the inventory to its present location and condition. Raw materials and purchased finished goods are valued at purchase cost. Net realizable value represents the estimated selling price for inventory less all estimated costs necessary to make the sale.

Prepaid Expenses and Deposits

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services.

- 23 -

Property and Equipment

Property and equipment which have finite lives are recorded at cost less accumulated depreciation and impairment losses. Depreciation is expensed from the month the particular asset is available for use over the estimated useful life of such asset at the following rates, which in each case are intended to reduce the carrying value of the asset to the estimated residual value:


Revenue-producing assets	Declining balance	20%

Furniture and fixtures	Declining balance	20%

Computer equipment	Declining balance	20%

Building	Straight-line	25 years

Intangible Assets

Software technology	Straight-line	5 years

Customer relationships	Straight-line	15 years

Brands	N/A	Indefinite useful life

The depreciation method, useful life and residual values are assessed annually and the assets are tested for impairment, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Upon retirement or disposal, the cost of the asset disposed of and the related accumulated amortization and depreciation are removed from the accounts and any gain or loss is reflected in net earnings. Expenditures for repairs and maintenance are expensed as incurred.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business acquisition. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is tested for impairment at least annually, or more frequently if circumstances such as significant declines in expected sales, net earnings or cash flows indicate that that the cash-generating unit(s) to which goodwill is allocated might be impaired.

Impairment of Non-Current Assets

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the cash-generating unit to which the asset or intangible asset with a definite useful life is allocated is estimated.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs of disposal.

Assets are grouped into the smallest group of assets that generate cash inflows through continued use that are largely independent of the cash inflows from other assets or groups of assets (“cash-generating unit” or “CGU”). For the impairment test of goodwill, goodwill has been allocated to two groups of CGUs. The level at which the impairment is tested represents the lowest level at which Management monitors goodwill for internal Management purposes in accordance with its operating segments. Goodwill acquired in a business combination is allocated to the group of CGUs that is expected to benefit from synergies of the related business combination.

The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset is allocated. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in net earnings.

- 24 -

Impairment losses recognized for a CGU (or group of CGUs) first reduce the carrying amount of any goodwill allocated to that CGU and then reduce the carrying amounts of the other assets of the CGU (or group of CGUs) pro rata on the basis of the carrying amount of each asset in the CGU (or group of CGUs).

An impairment loss recognized for goodwill may not be reversed. On each reporting date, the Corporation assesses if there is an indication that impairment losses recognized in previous periods for other assets have decreased or no longer exist. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized.

Research and Development

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefits, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production of such products or technologies.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment whenever there’s an indication that an asset might be impaired.

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method whereby the amounts of tax credits are applied as a reduction of the expense or deferred development costs.

Taxation

Income tax expense represents the sum of current and deferred taxes. Current and deferred taxes are recognized in net earnings, except to the extent it relates to items recognized in other comprehensive income (loss) or directly in equity.

Current tax

The tax currently payable is based on taxable income for the year. Taxable income differs from earnings as reported in the consolidated statements of earnings (loss) because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Corporation’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the particular reporting period.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Corporation’s consolidated financial statements and the corresponding tax bases used in the computation of taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting earnings.

- 25 -

difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of any such asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, in each case based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Corporation expects, at the end of the particular reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Corporation intends to settle its current tax assets and liabilities on a net basis.

Stock-Based Compensation

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the recognized expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in profit or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted as measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently re-measures non-employee equity-settled share-based payments at each vesting period and settlement date with any changes in fair value recognized in profit or loss. Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of such arrangement and requires an assessment of whether there is a conveyance of a right to use the asset subject to the arrangement. When substantially all risks and rewards of ownership are transferred from the lessor to the lessee, lease transactions are accounted for as finance leases. All other leases are accounted for as operating leases.

Corporation is the lessee

Leases of assets classified as finance leases are presented in the consolidated statements of financial position according to their nature. The interest element of the lease payment is recognized over the term of the lease based on the effective interest rate method and is included in financial expense in the consolidated statements of earnings (loss).

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease.

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Provisions

Provisions represent liabilities of the Corporation for which the amount or timing of payment is uncertain. Provisions are recognized when the Corporation has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at the present value of the expected expenditures required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in provisions due to the passage of time is recognized in financial expenses on the consolidated statements of earnings (loss).

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 15). The Corporation believes that its provisions are sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition-date fair value of any contingent consideration is recognized as part of the consideration transferred by the Corporation in exchange for the acquiree. Changes in the fair value of contingent consideration that result from additional information obtained during the measurement period (i.e., a maximum of one year from the acquisition date) about facts and circumstances that existed at the acquisition date are adjusted retrospectively against goodwill. The adjustment is recognized in the consolidated statements of earnings (loss) in accordance with the requirements for changes in assets or liabilities of the same nature.

Provision for minimum revenue guarantee

A provision for minimum revenue guarantee is recognized pursuant to an agreement with the vendor in the sale of Wagerlogic Ltd and Ongame Networks Ltd. The Corporation recognizes the best estimate of the amount that would be required to settle this obligation and the estimate is based on information that produces a range of amounts.

Royalties

The Corporation licenses various royalty rights from several owners of intellectual property rights. Generally, these arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight-line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense within selling expenses on the consolidated statements of earnings (loss).

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

Critical Accounting Estimates and Judgments

The preparation of the Corporation’s consolidated financial statements in accordance with IFRS requires Management to make estimates and assumptions that can have a significant effect on the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

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The consolidated financial statements include estimates based on currently available information and Management’s judgment as to the outcome of future conditions and circumstances. Management uses historical experience, general economic conditions and trends, as well as assumptions regarding probable future outcomes as the basis for determining estimates.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the consolidated financial statements and actual results could differ from the estimates and assumptions.

Set forth below are descriptions of items that require Management’s most critical estimates and judgments.

Estimates

Fair value assessments on business combinations

The recognition of business combinations requires the excess of the purchase price of acquisitions over the net book value of net assets acquired to be allocated to the assets acquired and liabilities assumed of the acquiree. The Corporation makes judgements and estimates in relation to the determination of the fair value of the identifiable net assets acquired, namely the intangible assets. The excess is assigned to goodwill.

Contingent consideration

The Corporation re-evaluates the fair value of the contingent consideration, including an “earn out”, on its business acquisitions at the end of each reporting period. Significant estimates are required to determine the fair value of the contingent consideration. The Corporation considers the key inputs of the particular arrangement and market participant assumptions when developing the projected cash flows that are used to determine the fair value of the contingent consideration. This includes the need to estimate the likelihood and timing of achieving the relevant milestones of the “earn out”. The Corporation exercises judgment when applying a probability assessment for each of the potential outcomes. In addition, the Corporation must consider the time value of money. In determining the discount rate applied to the estimated cash outflows, the Corporation considers the risks inherent to the contingent agreement such as projection risks, credit risks and liquidity risks.

Compound financial instruments

The Corporation has issued, and in the future may issue, compound financial instruments comprising both financial liability and equity components. The financial liability component is initially recognized at the fair value of a similar liability. The proceeds are then allocated between the financial liability and the equity components using the residual method. Significant estimates are made in determining the fair value of the financial liability component. To do so, Management determines the expected cash outflows that market participants would expect to incur in fulfilling the respective obligations. Then, Management estimates a market interest rate based on interest rates for a similar financial liability that does not have an equity conversion option. This market interest rate is used to discount the financial liability component. Actual cash outflows and interest rates may be different from estimates and may have an impact on the allocation of the proceeds to the financial liability and equity components.

Stock-based compensation and warrants

The Corporation estimates the expense related to stock-based compensation and the value of warrants using the Black-Scholes valuation model. This model takes into account Management’s best estimate of the exercise price of the stock option or warrant, an estimate of the expected life of the option or warrant, the current price of the underlying stock, an estimate of the stock’s or warrant’s volatility, an estimate of future dividends on the underlying stock, the risk-free rate of return expected for an instrument with a term equal to the expected life of the option or warrant, and the expected forfeiture rate of stock options granted (see note 20).

Income taxes

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required for the timing of the reversal of these temporary differences and the applicable tax rate. The carrying amounts of assets and liabilities are based on amounts recorded in the consolidated financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

The Corporation recognizes an income tax expense in each of the jurisdictions in which it operates. However, actual amounts of income tax expense only become final upon filing and acceptance of the tax return by the relevant authorities, which occur subsequent to the issuance of the financial statements. Additionally, estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income.

Such assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period.

Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Corporation’s interpretations of the same, will result in adjustments to the expectations of future timing difference reversals and may require material deferred tax adjustments. To the extent that forecasts differ from actual results, adjustments are recognized in subsequent reporting periods.

Judgments

Useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and, in the case of an intangible asset, contractual provisions that enable the renewal or extension of the asset’s legal or contractual life without substantial cost, as well as renewal history. Incorrect estimates of useful lives could result in an increase or decrease in the annual amortization expense and future impairment charges.

Functional currency

The Corporation’s worldwide operations expose the Corporation to transactions denominated in a number of different currencies, which are required to be translated into one currency for consolidated financial statement reporting purposes. The Corporation’s foreign currency translation policy is designed to reflect the economic exposure of the Corporation’s operations to various currencies.

The Corporation’s foreign operations (including subsidiaries, joint ventures, associates and branches) based mainly outside Canada may have different functional currencies. The functional currency of an operation is the currency of the primary economic environment to which it is exposed. In other to determine the functional currency, Management will first consider the currency that influences sales prices of the goods and services provided by the operations and the currency that influences the costs incurred by the operations. Then, if based on these two primary factors, the functional currency is not obvious, Management will examine secondary factors such as the currency in which funds from financing are obtained, the currency in which cash receipts are retained and the levels of interactions with the parent company. In determining the functional currency of an operation, Management uses its judgement to determine the functional currency that most faithfully represents the economic effects of the underlying transactions, events and conditions.

RECENT ACCOUNTING PRONOUNCEMENTS

Changes in Accounting Policies Adopted

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. The adoption of this standard did not have a material impact on the financial position and results of the Corporation.

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Recoverable Amount Disclosures for Non-Financial Assets: Amendments to IAS 36

The International Accounting Standards Board (“IASB”) has published Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36). These narrow-scope amendments to IAS 36, Impairment of Assets, address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. The adoption of this standard did not have an impact on the disclosures presented in these consolidated financial statements.

Novation of Derivatives and Continuation of Hedge Accounting: Amendments to IAS 39

The amendments to IAS 39 provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedge instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness. The amendments required retrospective application. The adoption of this standard did not have a material impact on the financial position and results of the Corporation.

Levies: Amendments to IFRIC 21

International Financial Reporting Standards Interpretations Committee (“IFRIC”) 21 addresses the issue of when to recognize a liability to pay a levy. The interpretation defines a “levy” and specifies that the obligation event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period. IFRIC 21 requires retrospective application. The adoption of this standard did not have a material impact on the financial position and results of the Corporation.

New Accounting Pronouncements Not Yet Effective

IFRS 9, Financial Instruments

The IASB issued IFRS 9 relating to the classification and measurement of financial assets. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the many different rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments (i.e., its business model) and the contractual cash flow characteristics of such financial assets.

IFRS 9 also includes a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting.

An entity shall apply IFRS 9 retrospectively for annual periods beginning on or after January 1, 2018 with early adoption permitted. The Corporation is currently evaluating the impact of applying this standard.

IFRS 15, Revenues from Contracts with Customers

The Financial Accounting Standards Board and IASB have issued converged standards on revenue recognition. This new IFRS 15 affects any entity using IFRS that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, in each case, unless those contracts are within the scope of other standards. This IFRS will supersede the revenue recognition requirements in IAS 18 and most industry-specific guidance.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

•

Step 1: Identify the contract with a customer.

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•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

An entity shall apply IFRS 15 for annual reporting periods beginning on or after January 1, 2017. Earlier application is permitted. The Corporation is currently evaluating the impact of applying this standard.

OFF BALANCE SHEET ARRANGEMENTS

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations, but exclusive of occupancy and escalation charges, aggregate to approximately $87.31 million. The minimum annual payments are as follows:


	$000’s
Within one year		17,393
Later than one year but not later than 5 years		34,224
More than 5 years		35,696

OUTSTANDING SHARE DATA

As at March 30, 2015, the Corporation had a total of 133,165,366 Common Shares issued and outstanding, 1,139,249 Preferred Shares issued and outstanding, 9,630,305 options issued under the Corporation’s share option plan, of which 2,656,583 were exercisable, and 957,699 share purchase warrants issued and outstanding.

DISCLOSURE CONTROLS AND PROCEDURES AND

INTERNAL CONTROL OVER FINANCIAL REPORTING

National Instrument 52-109 (“NI 52-109”), entitled Certification of Disclosure in Issuers’ Annual and Interim Filings, requires Amaya’s certifying officers, namely, the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), to establish and maintain disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in NI 52-109. In compliance with NI 52-109, the Corporation has filed certificates signed by the CEO and the CFO that, among other things, report on the design and effectiveness of each of DC&P and ICFR.

Disclosure Controls and Procedures

The CEO and CFO have designed DC&P, or have caused them to be designed under their supervision, in order to provide reasonable assurance that:

•

material information relating to the issuer is made known to them by others, particularly during the period in which the annual filings are being prepared;

•

information required to be disclosed in the annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation.

The CEO and CFO have evaluated, or caused to be evaluated under their supervision, the effectiveness of Amaya’s DC&P at the financial year end December 31, 2014. Based on that evaluation, the CEO and CFO concluded that DC&P are effective.

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Internal Control over Financial Reporting

The CEO and CFO have designed ICFR, or have caused it to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Amaya’s accounting and reporting standards.

The CEO and CFO have evaluated, or caused to be evaluated under their supervision, the effectiveness of Amaya’s ICFR at the financial year end December 31, 2014, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (1992) (COSO Framework). Based on that evaluation, the CEO and CFO concluded that ICFR is effective.

There has been no change in Amaya’s ICFR that occurred during the period beginning on January 1, 2014 and ended on December 31, 2014 that has materially affected, or is reasonably likely to materially affect, Amaya’s ICFR.

Limitation on Scope of Design

NI 52-109 allows an issuer to limit its design of DC&P and/or ICFR to exclude a business acquired not more than 365 days before the end of the period to which the certificate relates. During the year ended December 31, 2014, Amaya acquired two businesses, namely Diamond Game, effective February 13, 2014, and Rational Group, effective August 1, 2014. As allowed by NI 52-109, the CEO and CFO have limited the scope of their design of DC&P and ICFR to exclude controls, policies and procedures of these two businesses. Summary financial information about these two businesses is disclosed in this MD&A.

BUSINESS RISKS AND UNCERTAINTIES

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. Current and prospective investors should consider carefully the risks and uncertainties described below, in addition to other information contained in this MD&A, the Annual Information Form and our consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that could adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose part or all of your investment.

The Corporation’s current principal risks and uncertainties as identified by Management are summarized below, each of which could, among other things, have a material adverse effect on the Corporation’s business, liquidity and results of operations:

•

The Corporation’s substantial indebtedness requires that it use a significant portion of its cash flow to make interest payments, which could adversely affect its ability to raise additional capital to fund its operations, limit its ability to react to changes in the economy or in the Corporation’s industry and prevent it from making debt service payments. Amaya’s secured credit facilities and provisions governing the Preferred Shares contain restrictions that limit its flexibility in operating its business. Amaya may not be able to generate sufficient cash flows to meet its debt service obligations.

•

Amaya’s outstanding credit facilities subject it to financial covenants which may limit its flexibility. Amaya is also exposed to the risk of increased interest rates.

•

Amaya’s online offerings are part of new and evolving industries, which presents significant uncertainty and business risks.

•

Amaya’s success in the competitive gaming and interactive entertainment industries depends in large part on its ability to develop and manage frequent introductions of innovative products.

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•

The Corporation’s products are becoming more sophisticated, resulting in additional expenses and the increased potential for loss in the case of an unsuccessful product.

•

Acquisitions involve risks that could negatively affect the Corporation’s operating results, cash flows and liquidity.

•

The Corporation could face considerable business and financial risks in investigating, completing and implementing acquisitions.

•

Lengthy and variable sales cycle for the Corporation’s land-based products makes it difficult to forecast the timing of revenue from its B2B activities.

•

Contract awards granted by lottery authorities are not necessarily extended and there is no assurance that the Corporation will be granted such contracts in the future.

•

New products may be subject to complex and dynamic revenue recognition standards, which could materially affect the Corporation’s financial results.

•

The Corporation’s business is vulnerable to changing economic conditions and to other factors that adversely affect the industries in which it operates.

•

Changes in ownership of customers or consolidations within the gaming industry may negatively impact pricing and lead to downward pricing pressures which could reduce revenue.

•

Litigation costs and the outcome of litigation could have a material adverse effect on the Corporation’s business.

•

The risks related to international operations, in particular in countries outside of the United States and Canada, could negatively affect the Corporation’s results.

•

Privacy concerns could result in regulatory changes and impose additional costs and liabilities on the Corporation, limit its use of information, and adversely affect its business.

•

The Corporation’s results of operations could be affected by natural events in the locations in which it operates or where its customers or suppliers operate.

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•

The gaming industry is heavily regulated and failure by the Corporation to comply with applicable requirements could be disruptive to its business and could adversely affect its operations.

•

Potential changes to the Class II regulatory scheme may cause the Corporation to modify its Class II games which may result in the Corporation’s products becoming less competitive.

•

Current environmental laws and regulations, or those enacted in the future, could result in additional liabilities and costs.

•

Amaya’s intellectual property may be insufficient to properly safeguard its technology and brands.

•

The Corporation may be subject to claims of intellectual property infringement or invalidity and adverse outcomes of litigation could unfavorably affect its operating results.

•

Compromises of the Corporation’s systems or unauthorized access to confidential information or Amaya’s customers’ personal information could materially harm Amaya’s reputation and business.

•

Service interruptions of Internet service providers could impair the Corporation’s ability to carry on its business.

•

There is a risk that the Corporation’s network systems will be unable to meet the growing demand for its online products.

•

Systems, network or telecommunications failures or cyber-attacks may disrupt the Corporation’s business and have an adverse effect on Amaya’s results of operations.

•

Amaya’s land-based products and online operations may experience losses due to technical problems or fraudulent activities.

•

The Corporation’s Common Shares rank junior to the Preferred Shares with respect to amounts payable in the event of a liquidation.

•

The Corporation’s advance notice bylaws may prevent attempts by its shareholders to replace or remove its current management.

•

Future sales or the possibility of future sales of a substantial amount of the Corporation’s Common Shares may depress the price of the Corporation’s Common Shares.

•

The price and trading volume of the Common Shares may fluctuate significantly.

•

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All historical information relating to Rational Group prior to the Rational Group Acquisition presented in, or due to lack of information omitted from, Corporation’s documents filed on SEDAR, including the Corporation’s Management Information Circular, dated June 30, 2014, for the annual and special meeting of shareholders of the Corporation held on July 30, 2014 (the “2014 Management Information Circular”) and the Corporation’s Business Acquisition Report filed on October 15, 2014, including all financial information of Rational Group, has been provided in exclusive reliance on the information made available by Rational Group and their respective representatives. Although the Corporation has no reason to doubt the accuracy or completeness of Rational Group’s information provided therein, any inaccuracy or omission in such information contained could result in unanticipated liabilities or expenses, increase the cost of integrating Amaya and Rational Group or adversely affect the operational plans of the combined entities and its results of operations and financial condition.

A detailed description of the risks and uncertainties affecting Amaya and its business as set forth above, as well as additional risks and uncertainties, can be found in the Annual Information Form. Shareholders and prospective investors are urged to consult such risk factors.

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FURTHER INFORMATION

Additional information relating to Amaya and its business, including the Annual Information Form, may be found on SEDAR at www.sedar.com. Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of Amaya securities and securities authorized for issuance under equity compensation plans, is also contained in the 2014 Management Information Circular.

Montreal, Québec

March 30, 2015

(Signed) “Daniel Sebag”

Daniel Sebag, CPA, CA

Chief Financial Officer

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LOGO

EX-99.7

Exhibit 99.7

EXPLANATORY NOTE

In contemplation of potential future filings with the United States Securities and Exchange Commission, Amaya Inc. (the “Corporation”) is refiling its 2014 Audited Consolidated Annual Financial Statements, dated March 30, 2015, as initially filed on March 31, 2015 (the “2014 Financial Statements”), solely to (i) revise the report of the Corporation’s independent auditor, Deloitte LLP (“Deloitte’s Report”), and “Note 2—Summary of Significant Accounting Policies—Basis of Presentation” to include “as issued by the International Accounting Standards Board” following each statement that the 2014 Financial Statements have been prepared in accordance with International Financial Reporting Standards and (ii) include, immediately following Deloitte’s Report, the report of the Corporation’s predecessor independent auditor, Richter LLP. Except as specifically provided in the immediately preceding sentence, the 2014 Financial Statements remain entirely unmodified, regardless of events that may have occurred subsequent to the initial filing date. This explanatory note does not form a part of, and is not incorporated by reference in, the 2014 Financial Statements.

LOGO

ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED

DECEMBER 31, 2014

March 30, 2015

TABLE OF CONTENTS


INDEPENDENT AUDITORS’ REPORTS			1

CONSOLIDATED FINANCIAL STATEMENTS			3

	Consolidated Statements of Financial Position		3

	Consolidated Statements of Changes in Equity		4

	Consolidated Statements of Earnings (Loss)		5

	Consolidated Statements of Comprehensive Income		6

	Consolidated Statements of Cash Flows		7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			8

	1.	Nature of business	8

	2.	Summary of significant accounting policies	8

	3.	Recent accounting pronouncements	19

	4.	Investment tax credits receivable	21

	5.	Receivable under finance lease	21

	6.	Restricted cash	22

	7.	Prepaid expenses and deposits	22

	8.	Investments	23

	9.	Assets and liabilities classified as held for sale	25

	10.	Goodwill and intangible assets	25

	11.	Property and equipment	27

	12.	Income taxes	28

	13.	Credit facility	29

	14.	Other payables	30

	15.	Provisions	30

	16.	Customer deposits	31

	17.	Long-term debt	31

	18.	Commitments	36

	19.	Contingent liabilities	36

	20.	Share capital	36

	21.	Reserves	39

	22.	Financial instruments	43

	23.	Fair value	45

	24.	Capital management	46

	25.	Geographic information	47

	26.	Statement of cash-flows	47

	27.	Related party transactions	47

	28.	Revenues	48

	29.	Segmented information	48

	30.	Discontinued operations	49

	31.	Business combinations	50

	32.	Expenses classified by nature	54

	33.	Net earnings per share	55

	34.	Sale of WagerLogic Malta Holdings Ltd.	55

	35.	Subsequent events	56

	36.	Comparative information	56

INDEPENDENT AUDITOR’S REPORT

To the Shareholders and Board of Directors of Amaya Inc., formerly Amaya Gaming Group Inc.:

We have audited the accompanying consolidated financial statements of Amaya Inc. which comprise the consolidated statement of financial position as at December 31, 2014, and the consolidated statement of changes in equity, consolidated statement of earnings (loss), consolidated statement of comprehensive income and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Amaya Inc. as at December 31, 2014, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Other Matters

The consolidated financial statements of Amaya Inc. for the year ended December 31, 2013 (prior to adjustments described in Note 30) were audited by another auditor who expressed an unmodified opinion on those consolidated financial statements on March 31, 2014.

As part of our audit of the consolidated financial statements of Amaya Inc. for the year ended December 31, 2014 we also audited the adjustments described in Note 30, that were applied to retrospectively adjust the consolidated financial statements for the year ended December 31, 2013. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the consolidated financial statements of Amaya Inc. for the year ended December 31, 2013 other than with respect to the adjustments related to discontinued operations and, accordingly, we do not express an opinion or any other form of assurance on the consolidated financial statements for the year ended December 31, 2013 taken as a whole.

/s/ Deloitte LLP¹

March 30, 2015

Montréal, Québec

¹	CPA auditor, CA, public accountancy permit No. A118581

Independent Auditor’s Report

TO THE SHAREHOLDERS OF AMAYA INC. (FORMERLY AMAYA GAMING GROUP INC.)

We have audited the accompanying consolidated financial statements of Amaya Inc. and its subsidiaries, which comprise the consolidated statement of financial position as at December 31, 2013 and the consolidated statements of earnings (loss), comprehensive income, changes in equity and cash flows for the year ended December 31, 2013, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Auditor’s Responsibility

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Amaya Inc. and its subsidiaries as at December 31, 2013 and their financial performance and their cash flows for the year ended December 31, 2013 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Other Matters

As part of our audit of the consolidated financial statements of Amaya Inc. for the year ended December 31, 2013 we have not audited the adjustments described in Note 30, that were applied to retrospectively adjust the consolidated financial statements for the year ended December 31, 2013. We were not engaged to audit, review, or apply any procedures to the adjustments related to discontinued operations and, accordingly, we do not express an opinion or any other form of assurance on the adjustments related to discontinued operations reflected on the consolidated financial statements for the year ended December 31, 2013.

/s/ Richter LLP¹

Chartered Professional Accountants

Montréal, Québec

March 31, 2014

¹	CPA auditor, CA, public accountancy permit No. A112505

- 2 -

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


	December 31,			December 31,
	2014			2013
(Canadian dollars)	$000’s			$000’s
ASSETS
Current
Cash		425,453			93,640
Restricted cash (note 6)		112,530			—
Accounts receivable		159,076			47,460
Income tax receivable (note 12)		20,717			520
Inventories		10,217			7,595
Current maturity of receivable under finance lease (note 5)		699			4,865
Prepaid expenses and deposits (note 7)		36,947			4,174
Investments (note 8)		400,035			—
Assets classified as held for sale (note 9)		—			38,369
Promissory note (note 34)		3,783			—

		1,169,457			196,623

Restricted cash (note 6)		67,747			131
Prepaid expenses and deposits (note 7)		27,002			—
Investments (note 8)		12,519			10,582
Goodwill and intangible assets (note10)		5,718,051			163,037
Property and equipment (note 11)		94,811			40,521
Deferred development costs (net of accumulated amortization of $6,018,000; 2013 - $3,039,000)		14,054			3,818
Receivable under finance lease (note 5)		868			10,004
Investment tax credits receivable (note 4)		7,731			2,785
Deferred income taxes (note 12)		54,788			13,330

		7,167,028			440,831

LIABILITIES
Current
Accounts payable and accrued liabilities		178,990			27,477
Other payables (note 14)		212,691			1,132
Provisions (note 15)		46,479			3,685
Customer deposits (note 16)		600,966			4,453
Income tax payable		32,966			1,763
Current maturity of long-term debt (note 17)		11,451			2,388
Liabilities classified as held for sale (note 9)		—			4,638

		1,083,543			45,536

Other payables (note 14)		5,527			552
Deferred revenue		2,459			248
Long-term debt (note 17)		3,494,547			192,799
Provisions (note 15)		412,971			1,547
Deferred income taxes (note 12)		46,788			5,802

		5,045,835			246,484

Commitments and contingencies (note 18 and 19)
EQUITY
Share capital (note 20)		1,683,572			220,683
Reserves (note 21)		484,538			13,052
Retained Earnings (Deficit)		(46,917	)		(39,388	)

		2,121,193			194,347

		7,167,028			440,831

See accompanying notes

Approved and authorized for issue on behalf of the Board on March 30, 2015


(Signed) “Daniel Sebag”, Director		(Signed) “David Baazov”, Director
Daniel Sebag, CFO		David Baazov, CEO

- 3 -

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2014 and 2013


	Share Capital
									Convertible
				Common			Convertible		preferred						Retained
	Common			shares			preferred		shares						earnings			Total
	shares			Amount			shares		Amount			Reserves			(deficit)			Equity
(Canadian dollars)	Number			$000’s			Number		$000’s			$000’s			$000’s			$000’s
Balance – January 1, 2013		79,359,759			154,772			—		—			1,515			(10,708	)		145,579

Net loss		—			—			—		—			—			(29,173	)		(29,173	)
Other comprehensive income		—			—			—		—			9,673			—			9,673

Total comprehensive income (loss)		—			—			—		—			9,673			(29,173	)		(19,500	)

Issue of warrants related to non-convertible subordinated debt, net of transaction costs		—			—			—		—			2,963			—			2,963
Issue of common shares in relation to exercised warrants		473,730			2,308			—		—			(397	)		—			1,911
Issue of common shares in relation to exercised employee stock options		932,696			2,599			—		—			(798	)		—			1,801
Share-based compensation		—			—			—		—			2,030			—			2,030
Issue of common shares in relation to conversion of convertible debentures		7,572,912			24,612			—		—			(493	)		493			24,612
Issue of common shares in relations to private placement of equity, net of transaction costs		6,400,000			37,485			—		—			—			—			37,485
Share repurchase		(660,800	)		(1,364	)		—		—			(1,880	)		—			(3,244	)
Deferred income taxes in relation to transaction costs		—			271			—		—			439			—			710

Balance – December 31, 2013		94,078,297			220,683			—		—			13,052			(39,388	)		194,347

Balance – January 1, 2014		94,078,297			220,683			—		—			13,052			(39,388	)		194,347

Net earnings		—			—			—		—			—			(7,529	)		(7,529	)
Other comprehensive income		—			—			—		—			134,582			—			134,582

Total comprehensive income (loss)		—			—			—		—			134,582			(7,529	)		127,053

Issue of common shares in relation to exercised warrants		3,132,860			57,770			—		—			(51,491	)		—			6,279
Issue of common shares in relation to exercised employee stock options		649,159			3,204			—		—			(708	)		—			2,496
Issue of equity component of mezzanine subordinated unsecured term loan, net of transaction costs		—			—			—		—			15,977			—			15,977
Issue of convertible preferred shares in relation to Rational Group Acquisition		—			—			1,139,356		795,875			—			—			795,875
Issue of common shares in relation to Rational Group Acquisition		34,984,025			677,987			—		—			—			—			677,987
Issue of common share purchase warrants		—			—			—		—			365,174			—			365,174
Transaction costs in relation to Rational Group Acquisition		—			(28,369	)		—		(70,055	)		—			—			(98,424	)
Share-based compensation		—			—			—		—			6,237			—			6,237
Deferred income taxes in relation to transaction costs		—			8,258			—		18,219			1,715			—			28,192

Balance – December 31, 2014		132,844,341			939,533			1,139,356		744,039			484,538			(46,917	)		2,121,193

See accompanying notes

- 4 -

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)


	For the years ended
	December 31,
	2014			2013
(Canadian dollars)	$000’s			$000’s
Revenues (note 28)		688,222			145,892

Expenses
Selling (note 32)		101,493			13,728
General and administrative (note 32)		430,096			108,915
Financial (note 32)		98,568			20,530
Acquisition-related costs (note 32)		22,387			1,332

		652,544			144,505

Gain on sale of subsidiary (note 34)		19,562			—
Income from investments (note 8)		9,976			2,414

Net earnings from continuing operations before income taxes		65,216			3,801
Current income taxes (note 12)		8,642			9,995
Deferred income taxes (note 12)		(614	)		(1,429	)

Net earnings (loss) from continuing operations		57,188			(4,765	)
Net loss from discontinued operations (net of tax) (note 30)		(64,717	)		(24,408	)

Net earnings (loss)		(7,529	)		(29,173	)

Basic earnings (loss) from continuing operations per common share (note 33)	$	0.52		$	(0.05	)
Diluted earnings (loss) from continuing operations per common share (note 33)	$	0.41		$	(0.05	)

Basic earnings (loss) per common share (note 33)	$	(0.07	)	$	(0.33	)
Diluted earnings (loss) per common share (note 33)	$	(0.07	)	$	(0.33	)

See accompanying notes

- 5 -

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the years ended
	December 31,
	2014			2013
(Canadian dollars)	$000’s			$000’s
Net earnings (loss)		(7,529	)		(29,173	)

*Items that may be reclassified subsequently to net earnings*
Unrealized gains (losses) on available-for-sale investments		23,164			—
Income tax benefit (expense)		(3,618	)		—
Realized gains on available-for-sale investments reclassified to net earnings		(3,814	)		—

		15,732			—

Unrealized gains (losses) on translation arising during the year		123,380			9,673
Realized gains on disposal of foreign subsidiaries reclassified to net earnings		(4,530	)		—

		118,850			9,673

Other comprehensive income		134,582			9,673

Total comprehensive income (loss)		127,053			(19,500	)

See accompanying notes

- 6 -

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the years ended
	December 31,
	2014			2013
(Canadian dollars)	$000’s			$000’s
Operating activities
Net earnings (loss)		(7,529	)		(29,173	)
Interest accretion		27,133			8,287
Unrealised loss (gain) on foreign exchange		1,896			(2,474	)
Depreciation of property and equipment		18,998			12,734
Amortization of intangible assets		76,340			19,361
Amortization of deferred development costs		2,978			1,725
Stock-based compensation		6,237			2,030
Finance lease		7,370			(9,303	)
Loss on discontinued operation, net of tax		36,419			—
Gain on sale of subsidiary (note 34)		(19,562	)		—
Impairment of property and equipment, intangible assets, and finance leases		15,167			2,493
Unrealized gain on marketable securities		(10,322	)		—
Income tax expense recognised in net earnings		8,627			9,646
Interest expense		106,273			13,175
Other		(1,961	)		1,170

		268,064			29,671
Changes in non-cash operating elements of working capital (note 26)		277			(13,111	)
Interest paid		(76,609	)		(13,372	)
Income taxes paid		(1,074	)		(3,248	)

		190,658			(60	)

Financing activities
Proceeds from long term debt		3,152,060			193,337
Proceeds from convertible preferred share issuance		1,139,356			—
Proceeds from common share issuance		699,680			37,485
Issuance of capital stock in relation with exercised warrants		6,278			1,911
Issuance of capital stock in relation with exercised employee stock options		2,496			1,801
Repurchase of shares		—			(3,244	)
Transaction costs relating to the issuance of long term debt		—			(2,331	)
Transaction costs relating to convertible preferred share issuance		(70,056	)		—
Transaction costs relating to common share issuance		(28,369	)		—
Repayment of long-term debt		(8,534	)		(114,114	)

		4,892,911			114,845

Investing activities
Deferred development costs		(15,069	)		(11,025	)
Additions to property and equipment		(18,811	)		(17,430	)
Acquired intangible assets		(8,691	)		(18,736	)
Purchase of investments		(13,180	)		(10,582	)
Proceeds from sale of investments		8,326			—
Proceeds from sale of subsidiary (note 34)		52,500			—
Cash disposed of in discontinued operations		(3,277	)		(1,367	)
Minimum revenue guarantee (note 34)		(6,935	)		—
Restricted cash		(180,151	)		—
Acquisition of subsidiaries		(4,597,085	)		—
Other		1,780			352

		(4,780,593	)		(58,788	)

Increase (Decrease) in cash		302,976			55,997
Cash – beginning of period		93,640			31,327
Unrealized foreign exchange difference on cash		28,837			6,316

Cash and restricted cash – end of period		425,453			93,640

See accompanying notes

- 7 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS

Amaya Inc. (“Amaya” or the “Corporation”), formerly Amaya Gaming Group Inc., is a leading provider of technology-based products and services in the gaming industry. Amaya has two reportable segments, Business-to-Consumer (“B2C”) and Business-to-Business (“B2B”). For the year ended December 31, 2014, B2C consisted of Rational Group, while B2B consisted of Amaya’s B2B interactive gaming solutions, land-based gaming solutions, and lottery solutions.

Amaya’s primary business is its B2C operations, which it acquired through the Rational Group Acquisition (now known as Amaya Group Holdings (IOM) Limited), parent company of Rational Group Ltd. on August 1, 2014 (the “Rational Group Acquisition”). Rational Group operates globally and conducts its principal activities from its headquarters in the Isle of Man. Rational Group owns and operates gaming and related businesses and brands including, among others, PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. Amaya’s B2B operation is engaged in the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide, primarily to land-based and online gaming operators and government bodies.

Amaya’s registered head office is located at 7600 Trans-Canada Highway, Montréal, Québec, Canada, H9R 1C8 and is listed on the Toronto Stock Exchange (“TSX”) under the symbol “AYA”.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Corporation’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB” and, the International Financial Reporting Standards as issued by the IASB, “IFRS”).

Principles of Consolidation

Discontinued Operations and Assets Held for Sale

Non-current assets held for sale

- 8 -

Discontinued operations

Revenue Recognition

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

B2C Revenue

Revenue from the B2C operations consists primarily of online poker gaming revenue and is recognized when it is probable that the economic benefits will flow to the Corporation and the amount of revenue can be measured reliably. Revenue is recognized in the accounting periods in which the transactions occurred after deduction of certain offsets, such as promotional bonuses and Frequent player points granted to customers, and is measured at the fair value of the consideration received or receivable.

B2B Revenue

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Product sales

- 9 -

Participation leases and arrangements

Software licensing

Lease revenues

In the course of its normal business, the Corporation enters into lease agreements for its gaming equipment.

Translation of Foreign Operations and Foreign Currency Transactions

Functional and presentation currency

A change in functional currency is accounted for prospectively from the date of the change by translating all items into the new functional currency using the exchange rate at the date of the change.

Transactions and balances

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

- 10 -

The results and financial position of the Corporation’s entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)

assets and liabilities for each statement of financial position presented are translated at the closing exchange rate on the date of that statement of financial position;

(ii)

(iii)

all resulting exchange rate differences are recognized in other comprehensive income (loss) and are transferred to net earnings as part of gain (loss) on the disposal of subsidiaries.

The following functional currencies are referred to herein:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Great Britain Pound Sterling

Business Combination

Operating Segments

Financial Instruments

Financial assets

- 11 -

Fair value through profit or loss

Available-for-sale

Available-for-sale assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. Such assets are included in other non-current financial assets unless Management intends to dispose of them within twelve months of the date of the consolidated statements of financial position. Financial assets classified as available-for-sale are carried at fair value with changes in fair value recorded in other comprehensive income (loss). Interest on available-for-sale assets is calculated using the effective interest rate method and is recognized in profit or loss. When a decline in fair value is determined to be “other-than-temporary”, the cumulative loss included in accumulated other comprehensive income (loss) is removed as such and then recognized in the profit or loss. Gains and losses realized on the disposal of available-for-sale assets are recognized in profit or loss. The Corporation has current and non-current investments classified as available-for-sale (see note 8).

Held-to-maturity and loans and receivables

Impairment

Financial liabilities

Transaction costs

- 12 -

Compound financial instruments

Embedded derivatives

Determination of fair value

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognized by the Corporation at the end of the reporting period during which the transfer occurred.

Inventory Valuation

Prepaid Expenses and Deposits

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services.

- 13 -

Property and Equipment


Revenue-producing assets	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%
Building	Straight-line	25 years

Intangible Assets


Software technology	Straight-line	5 years
Customer relationships	Straight-line	15 years
Brands	N/A	Indefinite useful life

Goodwill

Impairment of Non-Current Assets

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs of disposal.

- 14 -

Research and Development

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment whenever there’s an indication that an asset might be impaired.

Taxation

Current tax

Deferred tax

Deferred tax liabilities are recognized for taxable temporary differences associated with investments and interests in subsidiaries and associates, except where the Corporation is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

- 15 -

Stock-based Compensation

Leases

Corporation is the lessee

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease.

Provisions

- 16 -

Provision for jackpot

Contingent consideration

Provision for minimum revenue guarantee

Royalties

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

Critical Accounting Estimates and Judgments

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Set forth below are descriptions of items that require Management’s most critical estimates and judgments.

- 17 -

Estimates

Fair value assessments on business combinations

Contingent consideration

Compound financial instruments

Stock-based compensation and warrants

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the applicable tax rate. The carrying amounts of assets and liabilities are based on amounts recorded in the consolidated financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

- 18 -

Judgments

Useful lives of long-lived assets

Functional currency

3. RECENT ACCOUNTING PRONOUNCEMENTS

Changes in Accounting Policies Adopted

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)

Recoverable Amount Disclosures for Non-Financial Assets: Amendments to IAS 36

The IASB has published Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36). These narrow-scope amendments to IAS 36, Impairment of Assets, address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.

- 19 -

Novation of Derivatives and Continuation of Hedge Accounting: Amendments to IAS 39

Levies: Amendments to IFRIC 21

IFRIC 21 addresses the issue of when to recognize a liability to pay a levy. The interpretation defines a “levy” and specifies that the obligation event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period. IFRIC 21 requires retrospective application. The adoption of this standard did not have a material impact on the financial position and results of the Corporation.

New Accounting Pronouncements – Not Yet Effective

IFRS 9, Financial Instruments

IFRS 9 also includes a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting.

IFRS 15, Revenues from Contracts with Customers

•

Step 1: Identify the contract with a customer.

•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

- 20 -

4. INVESTMENT TAX CREDITS RECEIVABLE


	December 31, 2014 $000’s		December 31, 2013 $000’s
Research and development investment tax credits
2009		1,363		1,363
2010		128		128
2011		340		217
2012		607		160
2013		928		917
2014		4,365		—

		7,731		2,785

5. RECEIVABLE UNDER FINANCE LEASE

The Corporation’s receivable under finance lease includes the following:


	December 31, 2014 $000’s			December 31, 2013 $000’s
Total minimum lease payments receivable		1,717			18,604
Unearned finance income		(150	)		(3,735	)

		1,567			14,869
Current maturity of receivable under finance lease		699			4,865

		868			10,004

Finance income from finance leases recognized in revenue for the year ended December 31, 2014 amounted to $739,000 (2013 – $642,000).

The present value of minimum lease payments receivable, unearned finance income and future minimum lease payments receivable under the finance leases are as follows:


	Present
	Value of				Future
	Minimum				Minimum
	Lease		Unearned		Lease
	Payments		Finance		Payments
	Receivable		Income		Receivable
	$000’s		$000’s		$000’s
2015		699		105		804
2016		745		42		787
2017		123		3		126

		1,567		150		1,717

- 21 -

6. RESTRICTED CASH

Restricted cash held by the Corporation is comprised of the following components:


	December 31, 2014 $000’s			December 31, 2013 $000’s
Amount owing to the DOJ* payable August 2015		112,530			—
Guarantees in connection with licenses held		11,572			—
Funds in excess of working capital requirements set aside for deferred payment **		56,049			—
Other		126			131

Restricted cash – total		180,277			131
Restricted cash – current portion		(112,530	)		—

Restricted cash – long term portion		67,747			131

This is the last payment related to a settlement PokerStars reached with the U.S. Department of Justice (DOJ) Southern District of New York, announced in July 2012. As part of the settlement agreement, PokerStars also acquired the assets of its primary competitor at the time, Full Tilt Poker, and committed to the full reimbursement of Full Tilt Poker customers inside and outside the United States.

The Purchase Price for the Rational Group Acquisition was comprised of a USD$4.5 billion payment made on closing of the transaction, as well as a deferred payment in the aggregate amount of US$400 million (see note 31), which, depending upon the occurrence or non-occurrence of certain conditions, may be subject to adjustment. Under the buyer credit agreement, the Corporation is required to deposit into a separate bank account an amount equal to 35% of the monthly excess cash flow, as defined under the agreement. The funds deposited into this account may be used solely for payment of the deferred payment and was invested in U.S. Dollar-denominated government bonds or bank deposits.

7. PREPAID EXPENSES AND DEPOSITS


	December 31,		December 31,
	2014		2013
	$000’s		$000’s
Prepaid royalties		12,827		315
Prepaid expenses		20,177		2,078
Vendor deposits		3,943		1,781

Total current portion of prepaid expenses and deposits		36,947		4,174
Prepaid royalties		25,591		—
Vendor deposits		1,411		—

Total non-current portion of prepaid expenses and deposits		27,002		—

Prepaid royalties includes prepaid revenue share paid to business partners. Prepaid expenses include prepayments for tradeshow expenses, marketing expenses, office rental expenses, general and administrative expenses, etc.

- 22 -

8. INVESTMENTS

The Corporation holds the following investments:


	December 31, 2014		December 31, 2013
	$000’s		$000’s
	Carrying value &		Carrying value &
	fair value		fair value
Funds- Available for sale		173,799		—
Bonds- Available for sale		122,528		—
Convertible debentures- Fair value through profit/loss¹		19,358		3,850
Equity in quoted companies – Available for sale		84,350		5,400
Equity in private companies- Available for sale		10,391		—
Investments in associates		2,128		1,332

Total investments		412,554		10,582

Current portion		400,035		—

Non-current portion		12,519		10,582

¹	A financial asset is designated as fair value through profit or loss on initial recognition if it is part of a contract containing one or more embedded derivatives and the entire contract is designated as such.

Investments relate primarily to player deposits held in accounts segregated from investments held for operational purposes.

There were no impairments taken on any investments of the Corporation.

The following table provides information about the carrying value of Bonds and Convertible debentures due over the current and non-current term:

1 year or less

1 to 5 years

Greater than 5 years

$000’s

Bonds

—

74,087

48,441

Convertible debentures

19,358

—

Total

19,358

74,087

48,441

The Corporation has recognized income from investments as follows:


							Equity in		Equity in
					Convertible		quoted		private
	Funds		Bonds		debentures		companies		companies		Associates			Total
December 31, 2014	$ooo’s		$ooo’s		$ooo’s		$ooo’s		$ooo’s		$ooo’s			$000’s
Investment income earned		—		—		—		—		—		(346	)		(346	)
Net realized gains		—		—		—		3,814		—		—			3,814
Unrealized gains		1,329		937		—		17,001		79		4			19,350
Changes in fair value through profit/loss		—		—		6,508		—		—		—			6,508

The Corporation recognized investment income of $2,414,000 during the year ended December 31 2013.

Investment income from Bonds and Convertible debentures includes interest income and premium and discount amortization. Income from Funds and Equity includes dividends and distributions.

- 23 -

(a) Convertible debentures – Fair value through profit or loss

During the year ended December 31, 2013 the Corporation acquired subscription receipts exchangeable into 1.35 million common shares and 353,000 common share purchase warrants of The Intertain Group Limited (TSX: IT) for a total cost of $5.4 million and 38,500 convertible debentures (TSX: IT.DB) which have a maturity date of December 31, 2018 and bear interest at 5.00% per annum for a total cost of $3.85 million. The debentures are convertible at the Corporation’s option into fully paid common shares of The Intertain Group Limited at any time prior to the maturity date at a conversion price of CAD$6.00 per common share. Each warrant is exchangeable into one common share at a price of CAD $5.00. The Corporation exercised all the warrants during the year.

During the year ended December 31, 2014, the Corporation also acquired a convertible debenture for a total cost of $10 million in NYX Gaming Group LTD which has a maturity date of November 17, 2017 and bears interest at 6.00% per annum. The Corporation assigned $1 million of the debenture to a third party. The debenture is convertible at the Corporation’s option into fully paid common shares of NYX Gaming Group LTD at any time prior to the maturity date at a conversion price of CAD$3.20 per common share.


	Convertible
	debentures
	$000’s
At December 31, 2013		3,850
Acquisition		9,000
Unrealized gain on investment		6,508

Balance at December 31, 2014		19,358

(b) Subsidiaries

The composition of the Corporation at the end of the reporting period was as follows.


	Country of	Principal	Percentage of
Name of principal subsidiary	incorporation	business	ownership
Amaya Incorporated	Canada	Intermediate holding company		100	%
Amaya Alberta Incorporated	Canada	B2B services		100	%
Amaya International Limited	Malta	B2B services		100	%
Cadillac Jack Incorporated	USA	B2B services		100	%
Diamond Game Enterprises	USA	B2B services		100	%
Cryptologic Incorporated	Guernsey	B2B services		100	%
Cryptologic Holdings Limited	Malta	Intermediate holding company		100	%
Amaya B.V.	Netherlands	Intermediate holding company		100	%
Halfords Media (IOM) Limited	Isle of Man	Marketing services		100	%
Halfords Media (UK) Limited	England	Various		100	%
Naris Limited	Isle of Man	Treasury		100	%
Amaya Group Holdings Limited	Isle of Man	Intermediate holding company		100	%
Rational Entertainment Enterprises Limited	Isle of Man	B2C services		100	%
Rational FT Enterprises Limited	Isle of Man	B2C services		100	%
Rational FT Services Limited	Isle of Man	Various		100	%
Amaya Group Limited	Isle of Man	Intermediate holding company		100	%
Rational PS Holdings Limited	Isle of Man	Intermediate holding company		100	%
Amaya Services Limited	Isle of Man	Various		100	%
Worldwide Independent Trust Limited	Isle of Man	Treasury		100	%
Mainsail Holdings Limited	Isle of Man	Property holding and management company		100	%

- 24 -

9. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

The following table is a summary of assets and liabilities classified as held for sale at December 31, 2013. The assets and liabilities below are related to the discontinued operations of Ongame Network Ltd (see Note 30) and the sale of WagerLogic Ltd (see Note 34), which were sold by the Corporation on November 24, 2014 and February 11 2014, respectively.


	December 31,
	2013
	$000’s
Cash		1,367
Prepaid expenses and deposits		24
Goodwill and intangible assets		30,417
Deferred development costs		6,561

Assets classified as held for sale		38,369


	Total
Accounts payable and accrued liabilities		154
Customer deposits		1,341
Deferred tax liability		3,143

Liabilities classified as held for sale		4,638

10. GOODWILL AND INTANGIBLE ASSETS

Cost


	Software			Customer
	Technology			Relationships			Brands		Goodwill			Other			Total
	$000’s			$000’s			$000’s		$000’s			$000’s			$000’s
Balance – January 1, 2013		65,815			18,364			—		93,964			9,561			187,704
Additions		—			—			—		—			18,736			18,736
Disposals		—			—			—		—			(134	)		(134	)
Reclassification to held for sale		(8,686	)		(2,141	)		—		(21,246	)		(1,009	)		(33,082	)
Translation		4,630			1,597			—		7,257			873			14,357

Balance – December 31, 2013		61,759			17,820			—		79,975			28,027			187,581

Additions		—			—			—		—			8,691			8,691
Additions through business combinations		125,569			1,560,542			530,187		3,081,720			4,572			5,302,590
Disposals and impairment		—			—			—		—			(11,846	)		(11,846	)
Discontinued operations		—			(9,161	)		—		—			(2,048	)		(11,209	)
Translation		12,934			97,171			32,755		196,912			1,612			341,384

Balance – December 31, 2014		200,262			1,666,372			562,942		3,358,607			29,008			5,817,191

- 25 -

Accumulated Amortization and Impairments


	Software			Customer
	Technology			Relationships			Brands		Goodwill		Other			Total
	$000’s			$000’s			$000’s		$000’s		$000’s			$000’s
Balance – January 1, 2013		3,928			364			—		—		2,679			6,971
Amortization		13,667			1,290			—		—		4,404			19,361
Disposals		—			—			—		—		(9	)		(9	)
Reclassification to held for sale		(1,988	)		(218	)		—		—		(459	)		(2,665	)
Translation		409			54			—		—		423			886

Balance – December 31, 2013		16,016			1,490			—		—		7,038			24,544

Amortization		23,737			45,737			—		—		6,866			76,340
Disposals		—			—			—		—		(3,955	)		(3,955	)
Discontinued operations		—			(1,254	)		—		—		(1,001	)		(2,255	)
Translation		2,478			1,680			—		—		308			4,466

Balance – December 31, 2014		42,231			47,653			—		—		9,256			99,140

Carrying Amount

Software

Customer

Technology

Relationships

Brands

Goodwill

Other

Total

$000’s

At December 31, 2013

45,743

16,330

—

79,975

20,989

163,037

At December 31, 2014

158,031

1,618,719

562,942

3,358,607

19,752

5,718,051

A number of B2B-related intangible assets have been determined to be redundant to the Corporation’s core operations, its B2C operation. Impairment losses in the amount of $6,176,000 (2013 - $nil) were therefore recognized during the year ended December 31, 2014.

Goodwill and intangible assets are allocated to the following cash generating units (CGUs):


	December 31, 2014				December 31, 2013
	B2C		Other		B2C		Other
	000’s		000’s		000’s		000’s
Software Technology		119,932		38,099		—		45,743
Customer Relationships		1,605,845		12,874		—		16,330
Brands		562,942		—		—		—
Goodwill		3,252,315		106,292		—		79,975
Other		4,016		15,736		—		20,989

Impairment Testing

Annual impairment tests were carried out in connection with the preparation of the financial statements as at December 31, 2014 for the B2C operations and the Other CGUs. In each case, a recoverable amount has been determined based on fair value less costs of disposal methodologies.

The principal assumptions made in determining the fair value less costs of disposal of the B2C operations are as follows:

Management used the implied trading multiple of its net earnings from continuing operations before income taxes, income from investments, gain on sale of subsidiary, depreciation and amortization, financial expenses and acquisition-related costs (“Adjusted EBITDA”) estimated for the twelve months ending December 31, 2014 to determine the fair value less costs of disposal amount of the B2C operations. Key assumptions include the Corporation’s share price, a control premium, estimated costs of disposal and estimated Adjusted EBITDA for the twelve months ending December 31, 2014. The share price used in the valuation was determined using the volume weighted average price for the 20 days up to December 31, 2014. A control premium of 9.4% was used, based on

- 26 -

market research of premiums implied in similar transactions. Costs of disposal were estimated at 1% of the fair value amount. Estimated Adjusted EBITDA was based on the actual Adjusted EBITDA for the five months ended December 31, 2014. Based on the key assumptions, the implied multiple of enterprise value to estimated Adjusted EBITDA for the last twelve months was 16x. The recoverable amount of the B2C operations was determined by applying the Corporation’s implied multiple of 16x to the estimated Adjusted EBITDA of the B2C operations.

Any reasonable possible change to these principal assumptions is unlikely to cause the CGU’s carrying value to exceed its recoverable amount. This fair value measurement is a level 3 measurement in the fair value hierarchy.

Based on the impairment tests performed, the recoverable amount of each CGU was in excess of its carrying amount and accordingly, there is no impairment of the carrying value of the goodwill or intangible assets with indefinite useful lives.

11. PROPERTY AND EQUIPMENT

Cost


	Revenue-Producing			Furniture and			Computer
	Assets			Fixtures			Equipment			Building		Total
	$000’s			$000’s			$000’s			$000’s		$000’s
Balance – January 1, 2013		29,376			6,527			6,783			—		42,686
Additions		14,203			758			2,469			—		17,430
Transfers to inventory		(2,104	)		—			—			—		(2,104	)
Disposals		(1,177	)		(157	)		(235	)		—		(1,569	)
Reclassifications and other		2,459			(2,378	)		—			—		81
Translation		1,631			348			301			—		2,280

Balance – December 31, 2013		44,388			5,098			9,318			—		58,804

Additions through business combinations		5,426			8,861			11,619			31,905		57,811
Additions		12,498			2,959			3,354			—		18,811
Disposals		(2,307	)		(1,261	)		(2,240	)		—		(5,808	)
Reclassifications and other		(2,000	)		65			558			—		(1,377	)
Discontinued operations		—			(387	)		(2,303	)		—		(2,690	)
Impairment		(4,791	)		(829	)		—			—		(5,620	)
Translation		(302	)		(876	)		(588	)		1,130		(636	)

Balance – December 31, 2014		52,912			13,630			19,718			33,035		119,295

- 27 -

Accumulated Amortization and Impairments


	Revenue-Producing			Furniture and			Computer
	Assets			Fixtures			Equipment			Building		Total
	$000’s			$000’s			$000’s			$000’s		$000’s
Balance – January 1, 2013		3,606			1,188			1,218			—		6,012
Depreciation		9,794			1,085			1,855			—		12,734
Transfers to inventory		(663	)		—			—			—		(663	)
Disposals		(281	)		(86	)		—			—		(367	)
Reclassifications and other		199			(118	)		—			—		81
Impairment		361			—			—			—		361
Translation		52			89			(16	)		—		125

Balance – December 31, 2013		13,068			2,158			3,057			—		18,283

Depreciation		12,865			1,720			3,835			578		18,998
Disposals		(1,470	)		(862	)		(2,142	)		—		(4,474	)
Reclassifications and other		(163	)		(7	)		—			—		(170	)
Discontinued operations		—			(110	)		(642	)		—		(752	)
Impairment		(2,793	)		(488	)		—			—		(3,281	)
Translation		(1,943	)		(1,091	)		(1,106	)		20		(4,120	)

Balance – December 31, 2014		19,564			1,320			3,002			598		24,484

Carrying Amount

Furniture and

Computer

Revenue-Producing Assets

Fixtures

Equipment

Building

Total

$000’s

At December 31, 2013

31,320

2,940

6,261

—

40,521

At December 31, 2014

33,348

12,310

16,716

32,437

94,811

A number of B2B-related tangible assets have been determined to be redundant to the Corporation’s core operations, its B2C operation. Impairment losses in the amount of $2,339,000 (2013 - $361,000) were therefore recognized during the year ended December 31, 2014.

12. INCOME TAXES

Income taxes reported differ from the amount computed by applying the statutory rates to earnings before income taxes. The reasons are as follows:


	December 31,			December 31,
	2014			2013
	$000’s			$000’s
Statutory income taxes		17,543			5,623
Non-taxable income		(13,699	)		(2,474	)
Non-deductible expenses		9,223			7,392
Differences in effective income tax rates in foreign jurisdictions		(38,251	)		(4,452	)
Deferred tax assets not recognized		48,541			1,492
Other		(15,329	)		985

Current and deferred income taxes		8,028			8,566

- 28 -

Significant components of the Corporation’s deferred income tax balance at December 31, 2014 and December 31, 2013 were as follows:


													Foreign
	Property &			Transaction						Tax			Tax
	Equipment			Costs			Intangibles			Losses			credits			Other			Total
	$000’s			$000’s			$000’s			$000’s			$000’s			$000’s			$000’s
At January 1, 2013		4,442			1,247			(19,956	)		14,101			10,772			(3,321	)		7,285
Credited / (charged) to net earnings		(1,827	)		(708	)		3,235			(2,437	)		2,882			284			1,429
Credited / (charged) directly to asset/liability		—			—			—			(2,792	)		—			(1,336	)		(4,128	)
Credited / (charged) to other comprehensive income		55			2			(1,528	)		363			850			64			(194	)
Credited / (charged) directly to equity		—			710			—			160			—			—			870
Reclassification to asset held for sale		—			—			1,621			—			—			1,522			3,143
Discontinued operations		—			—			568			—			—			(1,445	)		(877	)
Reclassification		(1,327	)		16			(2,172	)		(1,258	)		(145	)		4,886			—

At December 31, 2013		1,343			1,267			(18,232	)		8,137			14,359			654			7,528

Credited / (charged) to net earnings		4,539			(3,598	)		1,424			2,895			(14,913	)		10,267			614
Credited / (charged) directly to asset/liability		—			(257	)		—			1,489			—			(1,034	)		198
Credited / (charged) to other comprehensive income		20			2			(2,001	)		45			554			(3,429	)		(4,809	)
Charged / (credited) directly to equity		—			28,192			—			—			—			—			28,192
Discontinued operations		—			—			2,111			—			—			—			2,111
Acquisition of subsidiary		141			—			(26,677	)		562			—			140			(25,834	)

At December 31, 2014		6,043			25,606			(43,375	)		13,128			—			6,598			8,000

As at December 31, 2014, the Corporation had Federal and Provincial non-capital losses of approximately $48,368,000 and $47,121,000, respectively (December 31, 2013 – $25,879,000; $19,549,000) that may be applied against earnings of future years, not later than 2034. The Corporation’s foreign subsidiaries have non-capital losses of approximately $120,171,000 (December 31, 2013 - $50,897,000) that may be applied against earnings in future years, no later than 2032. As at December 31, 2014, deferred tax assets have not been recognized for $32,300,000 of deductible temporary differences, $118,600,000 of foreign non-capital losses and $9,300,000 of tax credits.

As at December 31, 2014, the Corporation had undeducted research and development expenses of approximately $2,431,000 federally and $4,149,000 provincially (December 31, 2013 – $2,216,000; $3,925,000) with no expiration date. The deferred income tax benefits of these deductions are recognized in the deferred income tax assets on the statement of financial position.

13. CREDIT FACILITY

- 29 -

14. OTHER PAYABLES

The Corporation’s other payables mainly relate to the settlement with the U.S. Department of Justice (DOJ) Southern District of New York, announced in July 2012. As part of the settlement agreement, PokerStars also acquired the assets of its primary competitor at the time, Full Tilt Poker, and committed to the full reimbursement of Full Tilt Poker customers inside and outside the United States. The funds required to settle the payment are included in current restricted cash (see note 6). The Frequent player points relates to loyalty schemes operated by the B2C business for its customers, which involves awarding customer loyalty points based on amounts wagered. The points can be used to make a wide variety of purchases in lieu of cash or can be exchanged for cash. Management has estimated the value of the liability using relevant historical information about the likelihood and magnitude of an outflow of resources. The Corporation maintains sufficient overhead in cash and investments to cover the estimated future frequent player point liability.


	December 31,		December 31,
	2014		2013
	$000’s		$000’s
Settlement with DOJ		110,920		—
Frequent player points		89,935		—
Brokerage account payable		9,764		—
Equipment financing		2,072		1,132

Total current portion other payable		212,691		1,132

The Corporation’s other long term payables include the following:


	December 31,		December 31,
	2014		2013
	$000’s		$000’s
Bonuses payable to employees		2,317		—
Equipment financing		3,210		552

Total long term portion other payables		5,527		552

15. PROVISIONS

The provisions in the statements of financial position include, among other items, the provision for jackpots and player bonuses, the provision of deferred consideration primarily in connection with the Rational Group Acquisition (see note 31) and the minimum revenue guarantee in connection with the sale of WagerLogic Ltd (see note 34). The carrying amounts and the movements in the provisions are as follows:

- 30 -


	Jackpots and					Minimum
	player			Contingent		revenue
	bonuses			consideration		guarantee			Other			Total
	$000’s			$000’s		$000’s			$000’s			$ 000’s
Opening balance		4,245			987		—			—			5,232
Provisions acquired on business combinations		23,194			400,975		—			—			424,169
Additional provision recognized		42,800			7,604		45,815			1,866			98,085
Payments		(60,244	)		—		(18,166	)		(7	)		(78,417	)
Accretion of discount		—			9,384		469			—			9,853
Reclassification		(648	)		256		—			109			(283	)
Foreign exchange translation (gains) losses		377			434		—			—			811

Balance at end of year		9,724			419,640		28,118			1,968			459,450

Current portion		9,724			8,535		28,118			102			46,479

Non-current portion		—			411,105		—			1,866			412,971

16. CUSTOMER DEPOSITS

Customer deposit liabilities relate to player deposits which are held in segregated multiple bank accounts from those holding operational funds. These deposits are included in cash and investments in the statements of financial position. Both PokerStars and Full Tilt hold end user’s deposits, along with winnings plus any bonuses, in trust accounts from which money may not be removed if it would result in a shortfall of players’ funds.

17. LONG-TERM DEBT

The following is a summary of long-term debt outstanding at December 31, 2014 and December 31, 2013:


Principal outstanding balance	In local denominated currency 000’s		December 31, 2014 $000’s		December 31, 2013 $000’s
USD First Lien Term Loan		1,745,625		1,956,220		—
USD Second Lien Term Loan		800,000		873,519		—
EUR First Lien Term Loan		199,500		271,388		—
Senior Facility (USD)		238,000		273,910		168,178
Mezzanine Facility (USD)		104,537		102,941		—
2013 Debentures (CAD)		30,000		28,020		26,323
Other long-debt term		—		—		686

Total long-term debt				3,505,998		195,187

Current portion				11,451		2,388

Non-current portion				3,494,547		192,799

(a) 2013 Debentures

- 31 -


	December 31,
	2014
	$000’s
Fair value of liability component		26,844
Fair value of warrants		3,156
Face Value		30,000

Transaction costs		1,831

During the year ended December 31, 2014, the Corporation incurred $3,95 million (2013 – $3.13 million) in interest of which $1.70 million (2013 – $1.12 million) relates to interest accretion.

The following table sets forth the movements in the debt and equity components of the private placement of units recognized during the year ended December 31, 2014.

Face

Liability

Equity

value

component

$000’s

Opening balance (net of transaction costs)

30,000

25,206

2,963

Exercise of warrants

—

(1,634

)

Accretion of liability component (effective interest of 14.10%)

—

2,814

—

Balance at December 31, 2014

30,000

28,020

1,329

The following table sets for the repayment obligations under the debt component of the private placement of units during the next two fiscal years:


	$000’s
2015		—
2016		30,000

(b) Credit Facilities and Senior Facility

During the year ended December 31, 2014, the Corporation incurred $23.64 million (2013 - $16.32 million) in interest of which $2.32 million (2013 - $5.97 million) relates to interest accretion.

- 32 -


	December 31,			December 31,
	2014			2013
	$000’s			$000’s
Principal		278,424			174,563
Repayment		(2,320	)		(4,387	)
Transaction costs		(4,417	)		(7,899	)
Accretion (effective interest rate of 9.90%)		2,328			5,965
Translation		(105	)		(64	)

		273,910			168,178
Current portion (net of unamortized transaction costs of $429,000)		(2,355	)		(1,702	)

		271,555			166,476

The principal repayments of the Senior Facility over the next five years amount to the following:


	$000’s
2015		2,784
2016		2,784
2017		2,784
2018		2,784
2019		264,968

On May 15, 2014, Cadillac Jack obtained a mezzanine subordinated unsecured loan (the “Mezzanine Facility”) in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash. The Mezzanine Facility will mature over a 6-year term from the closing date and is unsecured. Amaya has provided an unsecured guarantee of the obligations under the Mezzanine Facility in favor of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios, each of which the Corporation was in compliance with as of December 31, 2014. In connection with the Mezzanine Facility, the Corporation granted the lenders 4,000,000 Common Share purchase warrants, entitling the holders thereof to acquire one Common Share per warrant at a price per Common Share equal to CAD$19.17 at any time up to a period ending ten years after the closing date (see note 21).

During the year ended December 31, 2014, the Corporation incurred $10 million in interest of which $0.7 million relates to interest accretion and $5.01 million relates to paid in kind interest.


	December 31,
	2014
	$000’s
Fair value of liability component		99,597
Fair value of equity component		16,413
Face Value		116,010

Transaction costs		3,082

- 33 -

The following table reflects movements recognized during the year ended December 31, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		116,010		96,951		15,977
Paid in kind interest		—		5,011		—
Accretion of liability component (effective interest of 16.16%)		—		727		—
Translation		—		252		—

Balance at December 31, 2014		116,010		102,941		15,977

The principal repayments under the Mezzanine Facility over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		116,010

		116,010

(d) First and Second Lien Term Loans

On August 1, 2014 Amaya completed the Rational Group Acquisition, which was partly financed through the issuance of long term debt, allocated as follows:

First Lien Term Loans

The first lien term loans consist of a USD$1.75 billion seven-year first lien term loan priced at Libor plus 4.00% (the “USD First Lien Term Loan”) and a €200 million seven-year first lien term loan priced at Euribor plus 4.25% (the “EUR First Lien Term Loan” and, together with the USD First Lien Term Loan, the “First Lien Term Loans”), in each case with a 1.00% Libor and Euribor floor.

The Corporation is required to allocate 50% of the excess cash flow of the Corporation to the principal repayment of the First Lien Term Loans. Excess cash flow is referred to as EBITDA of the Rational Group on a consolidated basis for such excess cash flow period (i.e., each fiscal year commencing with the fiscal year ending on December 31, 2015), minus, without duplication, debt service , capital expenditures, permitted business acquisitions and investments, taxes paid in cash , increases in working capital, cash expenditures in respect of swap agreements, any extraordinary, unusual or nonrecurring loss, income or gain on asset dispositions, and plus, without any duplication, decreases in working capital, capital expenditures funded with the proceeds of the issuance of debt or the issuance of equity, cash payments received in respect of swap agreements, any extraordinary, unusual or nonrecurring gain realized in cash and cash interest income to the extent deducted in the computation of EBITDA.

The percentage allocated to the principal repayment can fluctuate based on the following:

•

If the total secured leverage ratio at the end of the applicable excess cash flow period is less than or equal to 4.00 to 1.00, the repayment will be 0% of the excess cash flow.

During the year ended December 31, 2014, the Corporation incurred $46.24 million in interest of which $4.84 million relates to interest accretion in relation to the USD First Lien Term Loan.

- 34 -


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		2,030,175			—
Repayment		(5,075	)		—
Transaction costs		(71,365	)		—
Accretion (effective interest rate of 5.79%)		4,842			—
Translation		(2,357	)		—

		1,956,220			—
Current portion (net of unamortized transaction costs of $12,450,000)		(7,852	)		—

		1,948,368			—

The USD First Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		20,302
2016		160,043
2017		181,185
2018		193,165
2019+		1,470,405

During the year ended December 31, 2014, the Corporation incurred $7.04 million in interest of which $0.65 million relates to interest accretion in relation to the EUR First Lien Term Loan.


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		280,767			—
Repayment		(702	)		—
Transaction costs		(9,562	)		—
Accretion (effective interest rate of 5.97%)		646			—
Translation		239			—

		271,388			—
Current portion (net of unamortized transaction costs of $1,564,000)		(1,244	)		—

		270,144			—

The EUR First Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,808
2016		22,133
2017		25,057
2018		26,714
2019+		203,353

Second Lien Term Loan

The Second Lien Term Loan consists of a USD$800 million eight-year loan bearing interest at Libor plus 7.00%, with a 1.00% Libor floor repayable on August 1, 2022 (the “USD Second Lien Term Loan”). During the year ended December 31, 2014, the Corporation incurred $32.24 million in interest of which $1.97 million relates to interest accretion.

- 35 -


	December 31, 2014 $000’s			December 31, 2013 $000’s
Principal		928,080			—
Transaction costs		(54,659	)		—
Accretion (effective interest rate of 9.07%)		1,965			—
Translation		(1,867	)		—

		873,519			—
Current portion (net of unamortized transaction costs of $nil)		—			—

		873,519			—

The USD Second Lien Term Loan principal repayments over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		928,080

18. COMMITMENTS

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $87,313,000 and are payable as follows:


	Within one year $000’s		Later than one year but not later than 5 years $000’s		More than 5 years $000’s
Rent		11,786		32,397		35,696
Purchase obligations		4,101		1,786		—
Other		1,506		41		—

19. CONTINGENT LIABILITIES

As part of Management’s ongoing regulatory compliance and operational risk assessment process, Management monitors legal and regulatory developments, and their potential impact on the business.

Given the nature of the legal and regulatory landscape of the industry in which it operates, from time to time the Corporation has received notices, communications and legal actions from regulatory authorities in various jurisdictions and other parties in respect of its activities. The Corporation has taken legal advice as to the manner in which it should respond and the likelihood of success of such actions. Based on this advice and the nature of the actions, no provisions have been recorded.

The Corporation operates in numerous jurisdictions. Accordingly, the Group files tax returns, providing for and paying all taxes and duties it believes are due based on local tax laws, transfer pricing agreements and tax advice obtained. The Corporation is periodically subject to audits and assessments by local taxing authorities. Accordingly, no additional provisions have been recorded.

20. SHARE CAPITAL

The authorized share capital of the Corporation consists of an unlimited number of common shares, with no par value, and an unlimited number of convertible preferred shares, with no par value, issuable in series.

- 36 -


	Common shares						Preferred shares
	Number of shares			$000’s			Number of shares		$000’s
Opening balance, as at January 1, 2013		79,359,759			154,772			—		—
Issuance		13,972,912			62,097			—		—
Exercise of options		932,696			2,599			—		—
Exercise of warrants		473,730			2,308			—		—
Deferred income taxes in relation to transaction costs		—			271			—		—
Share repurchase		(660,800	)		(1,364	)		—		—

Ending balance, as at December 31, 2013		94,078,297			220,683			—		—

Issuance, net of transaction costs and warrants		34,984,025			649,618			1,139,356		725,820
Exercise of options		649,159			3,204			—		—
Exercise of warrants		3,132,860			57,770			—		—
Deferred income taxes in relation to transaction costs		—			8,258			—		18,219

Ending balance, as at December 31, 2014		132,844,341			939,533			1,139,356		744,039

During year ended December 31, 2014:

•

the Corporation issued 3,132,860 common shares for cash consideration of $6,279,000 as a result of the exercise of warrants. Initially the 3,132,860 warrants were valued at $51,491,000 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to reserves was reallocated to the common shares.

•

the Corporation issued 649,159 common shares for cash consideration of $2,496,000 as a result of the exercise of stock options. Initially the 649,159 stock options were valued at $708,000 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to reserves was reallocated to the common shares.

•

the Corporation issued 1,139,356 convertible preferred shares primarily to certain lenders for cash consideration of USD$1,050,000,000 (CAD$ 1,139,356,000) which was used to finance a portion of the Rational Group Acquisition. Each convertible preferred share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to dilution adjustments and including a 6% annual accretion over a 3 year period up to August 1, 2017, to the conversion ratio, compounded semi-annually. The Corporation can require a mandatory exercise of preferred shares on or after August 1, 2017.Certain lenders of the Corporation acquired USD$871,000,000 of these convertible preferred shares.

•

the Corporation issued 34,984,025 common shares for cash consideration of $699,681,000 which was used to finance a portion of the Rational Group Acquisition. The cash consideration is separated as follows :

•

CAD$640 million of subscription receipts at CAD$20 per subscription receipt which were automatically converted on a one-to-one basis into common shares upon closing of the Acquisition.

•

Certain lenders of the Corporation acquired USD$55 million (CAD $59,681,000) of common shares at CAD$20 per share.

•

12,750,000 warrants representing an allocated fair value of $365,174,000 between common shares and convertible preferred shares were issued in connection with the Rational Group Acquisition equity financing (note 21).

- 37 -

During the year ended December 31, 2013:

•

the Corporation issued 473,730 common shares for cash consideration of $1,911,000 as a result of the exercise of warrants. Initially the 473,730 warrants were valued at $397,000 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to reserves was reallocated to the common shares.

•

the Corporation issued 932,696 common shares for cash consideration of $1,801,000 as a result of the exercise of stock options. Initially the 932,696 stock options were valued at $799,000 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to reserves was reallocated to the common shares.

•

the Corporation issued 7,572,912 common shares in relation to conversion of convertible debentures at the conversion price of $3.25.

•

the Corporation purchased 660,800 common shares for cancellation for $3,244,000. On the cancellation of common shares, $1,880,000 was allocated to reserves.

•

the Corporation completed a private placement offering of 6,400,000 common shares at a price of $6.25 per common share for aggregate gross proceeds of $40,000,000 (see note 2). Transaction costs related to this issuance was CAD$ 2,515,000.

- 38 -

21. RESERVES

The following table highlights the class of reserves included in the Corporation’s equity:


	Warrants $000’s			Stock Options $000’s			Cumulative translation adjustments $000’s			Available-for-sale investments $000’s			Other $000’s			Total $000’s
Balance – January 1, 2013		265			1,977			(835	)		—			109			1,516
Issuance of warrants		2,963			—			—			—			—			2,963
Cumulative translation adjustments		—			—			9,673			—			—			9,673
Stock-based compensation		—			2,030			—			—			—			2,030
Exercise of warrants		(397	)		—			—			—			—			(397	)
Exercise of stock options		—			(798	)		—			—			—			(798	)
Repurchase of shares		—			—			—			—			(1,880	)		(1,880	)
Unrealized gains		—			—			—			—			—			—
Other		—			—			—			—			(55	)		(55	)

Balance – December 31, 2013		2,831			3,209			8,838			—			(1,826	)		13,052

Issuance of warrants		381,151			—			—			—			—			381,151
Cumulative translation adjustments		—			—			123,380			—			—			123,380
Stock-based compensation		—			6,237			—			—			—			6,237
Exercise of warrants		(51,491	)		—			—			—			—			(51,491	)
Exercise of stock options		—			(708	)		—			—			—			(708	)
Realized gains		—			—			(4,530	)		(3,101	)		—			(7,631	)
Unrealized gains		—			—			—			18,833			—			18,833
Other		—			—			—			—			1,715			1,715

Balance – December 31, 2014		332,491			8,738			127,688			15,732			(111	)		484,538

Stock Options

Under the Corporation’s stock option plan, 9,801,289 additional common shares are reserved for issuance. This reserve cannot exceed 10% of the issued and outstanding common shares of the Corporation at any such time. Except in exceptional circumstances, the exercise price of the share options shall not be less than the market price of the common shares of the Corporation on the TSX at the time of grant. The options have a maximum term of five years. Options issued from 2012 onwards vest in equal increments over four years. Options issued in prior years vested in equal increments over two years.

- 39 -

The following table provides information about outstanding stock options at December 31, 2014:


	For the year ended December 31, 2014					For the year ended December 31, 2013
	Number of options			Weighted average exercise price $		Number of options			Weighted average exercise price $
Beginning balance		5,124,379			3.75		5,447,800			3.00
Transactions during the period:
Issued		5,963,300			24.78		997,500			6.39
Exercised		(649,159	)		3.84		(932,696	)		1.93
Forfeited		(637,231	)		8.89		(388,225	)		4.32

Ending balance		9,801,289			16.21		5,124,379			3.75

During the year ended December 31, 2014, the Corporation granted 5,963,300 stock options to employees to purchase common shares.

The stock options are exercisable at prices ranging from $1.00 to $35.05 per share and have a weighted average contractual term of 3.61 years.

- 40 -

Summary of exercisable options per stock option grant:


	Outstanding options				Exercisable options
Exercise prices $	Number of options		Weighted average outstanding maturity period (years)		Number of options		Exercise price $
1.00		1,035,800		0.55		1,035,800		1.00
1.30		50,000		0.70		50,000		1.30
2.16		12,750		1.73		12,750		2.16
2.50		72,500		1.04		72,500		2.50
2.60		15,000		1.00		15,000		2.60
2.71		65,000		1.50		65,000		2.71
2.85		160,000		1.53		160,000		2.85
3.38		40,000		1.41		40,000		3.38
4.20		1,023,050		2.53		483,800		4.20
4.24		1,016,839		2.92		282,014		4.24
4.35		45,000		2.92		—		4.35
4.90		15,625		3.03		2,500		4.90
6.00		9,375		3.41		—		6.00
6.05		117,875		3.54		26,750		6.05
6.33		29,000		3.70		6,500		6.33
7.55		217,375		3.97		53,969		7.55
7.95		600,000		3.99		300,000		7.95
8.43		142,500		4.16		—		8.43
28.65		2,711,600		4.63		—		28.65
31.30		315,000		4.66		50,000		31.30
35.05		65,000		4.70		—		35.05
27.50		1,000,500		4.78		—		27.50
27.91		6,500		4.79		—		27.91
20.00		950,000		4.80		—		20.00
32.83		50,000		4.82		—		32.83
32.91		35,000		4.86		—		32.91

		9,801,289		3.61		2,656,583		3.73

The weighted-average share price of options exercised during the year ended December 31, 2014 was $3.84 (2013

- $1.93).

The Corporation recorded a compensation expense of $6,237,000 for the year ended December 31, 2014 (2013 - $2,030,000). The Corporation has $21,991,000 of stock option expense to be recorded in future periods.

The expected life of the options is estimated using the average of the vesting period and the contractual life of the options. The volatility is estimated based on the Corporation’s public trading history. Forfeiture rate is estimated based on a combination of historical forfeiture rates and expected turnover rates.

- 41 -

The stock options issued during the year ended December 31, 2014 were accounted for at their grant date fair value of $37,151,000, as determined by the Black-Scholes valuation model using the following weighted-average assumptions:


	2014			2013
Expected volatility		62	%		60	%
Expected life		3.75 years			3.75 years
Expected forfeiture rate		0%-17	%		17	%
Risk-free interest rate		1.07	%		1.07	%
Dividend yield		Nil			Nil
Weighted average share price	$	24.78		$	6.04
Weighted average fair value of options at grant date	$	6.23		$	1.80

Warrants

The following table provides information about outstanding warrants at December 31, 2014 and December 31, 2013:


	For the year ended December 31, 2014					For the year ended December 31, 2013
	Number of warrants			Weighted average exercise price $		Number of warrants			Weighted average exercise price $
Beginning balance		2,594,270			4.62		1,628,000			3.01
Issued		16,750,000			4.59		1,440,000			6.25
Exercised		(3,132,860	)		2.00		(473,730	)		4.03
Expired		—			—		—			—

Ending balance		16,211,410			5.09		2,594,270			4.62

The following table provides information about number of warrants outstanding per warrant grant:


Grant date	Expiry date		Number of warrants		Exercise price
27-Mar-12		30-Apr-15		564,955		3.00
07-Feb-13		31-Jan-16		645,919		6.25
15-May-14		15-May-24		4,000,000		19.17
1-Aug-14		1-Aug-24		11,000,536		0.01

				16,211,410		5.09

During the year ended December 31, 2014, 4,000,000 warrants were issued in connection with the Mezzanine subordinated unsecured term loan representing an allocated fair value of $15,977,000. The warrants had an exercise price of $19.17 per common share effective as of June 20, 2014, representing the 5-day VWAP of the common shares on the TSX following the announcement of the agreement to acquire the Oldford Group. The warrants may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX. 12,750,000 warrants representing an allocated fair value of $365,174,000 between common shares and preferred shares were issued in connection with the Rational Group Acquisition equity financing. Each warrant has an exercise price of $0.01 and may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX.

During the year ended December 31, 2014, the Corporation received $6,279,000 for the exercise of 3,132,860 warrants. On the exercise of 3,132,860 warrants, the value of $51,491,000 originally allocated to reserves was reallocated to the share capital. Of the 3,132,860 warrants exercised, 1,750,000 warrants were exercised by certain lenders of the Corporation.

- 42 -

During the year ended December 31, 2013, the Corporation received $1,910,550 for the exercise of 473,730 warrants. On the exercise of 473,730 warrants, the value of $397,317 originally allocated to reserves was reallocated to the share capital.

During the year ended December 31, 2013, 1,440,000 warrants with an exercise price of $6.25 per common share were issued in connection with the 2013 debentures issued by the Corporation, representing an allocated fair value of $3,155,648 (see note 17).


	2014			2013
Expected volatility		60	%		52	%
Expected life		10 years			3 years
Expected forfeiture rate		0	%		0	%
Risk-free interest rate		1.17	%		1.07	%
Dividend yield		Nil			Nil
Weighted average fair value of options at grant date	$	28.64		$	2.19

22. FINANCIAL INSTRUMENTS

Foreign Exchange Risk

As at December 31, 2014, the Corporation’s significant foreign exchange currency exposure on these financial instruments by currency was as follows:

Canadian dollar equivalent


	USD $000’s			EUR $000’s			GBP $000’s
Cash		285,242			102,405			14,340
Restricted cash		180,165			112			—
Available for sale investments		326,189			24,726			—
Accounts receivable		65,469			49,736			15,088
Income tax receivable		—			20,717			—
Accounts payable and accrued liabilities		(109,746	)		(34,749	)		(20,741	)
Other payables		(194,740	)		—			—
Income tax payable		(2,600	)		(24,266	)		(1,341	)
Provisions		(450,083	)		(118,313	)		(3,709	)
Customer deposits		(461,493	)		(127,172	)		(12,301	)

The table below details the effect on earnings before tax of a 10% strengthening or weakening of the Canadian Dollar exchange rate at the balance sheet date for balance sheet items denominated in USD, EUR and GBP:


Currency	10% Strengthening (weakening) $000’s
USD		35,723
EUR		11,796
GBP		866

- 43 -

Interest Rate Risk

The Corporation is exposed to fair value interest rate risk with respect to its senior facility, mezzanine facility and 2013 debentures and other long-term debt which bear a fixed rate of interest. The Corporation is exposed to cash flow interest rate risk on its refinanced senior secured term loan and first and second lien term loans which bears interest at variable rates. A one percentage point increase (decrease) in interest rates would have decreased (increased) net earnings before income taxes by approximately $17,089,000 for the year, with all other variables held constant. Management monitors movements in the interest rates by reviewing the Bank of Canada prime rate, Euribor and Libor on a quarterly basis.

Credit Risk

The Corporation, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer. The Corporation establishes an allowance for doubtful accounts that corresponds to the credit risk of its specific customers, historical trends and economic circumstances. The Corporation is exposed to credit risk in the event of non-payment by certain customers for their accounts receivable.

Trade receivables include amounts that are past due at the end of the reporting period for which the Corporation has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable.

Age of receivables that are past due but not impaired:


	December 31, 2014 $000’s		December 31, 2013 $000’s
Past due less than 181 days		3,847		6,826
Past due more than 181 days		3,203		16,150

The allowance for doubtful accounts is $822,000 (2013 – 1,464,000) as at December 31, 2014.

Age of impaired trade receivables:


	December 31, 2014 $000’s		December 31, 2013 $000’s
Past due less than 181 days		563		250
Past due more than 181 days		4,431		781

Total past due		4,994		1,031

Liquidity Risk

Liquidity risk is the Corporation’s ability to meet its financial obligations when they come due. The Corporation is exposed to liquidity risk with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities. The Corporation’s objective is to maintain a balance between continuity of funding and flexibility through borrowing facilities available through the Corporation’s bank and other lenders. The Corporation’s policy is to ensure adequate funding is available from operations, established lending facilities and other sources as required.

The Corporation believes that future cash flows generated by operations and availability under its borrowing facility will be adequate to meet its financial obligations.

- 44 -

The following table provides information about the terms of the financial obligations and liabilities:


	On demand $000’s		Less than 1 year $000’s		2 to 5 years $000’s		Greater than 5 years $000’s
Accounts payable and accrued liabilities		178,990		—		—		—
Other payables		210,620		2,127		5,042		522
Provisions		46,479		—		410,830		2,141
Customer deposits		600,966		—		—		—
Income tax payable		32,966		—		—		—
Long-term debt*		—		254,237		1,954,151		2,863,667

Total		1,070,021		256,364		2,370,023		2,866,330

*	includes capital and interest

23. FAIR VALUE

The Corporation has determined that the carrying values of its short-term financial assets and liabilities approximate their fair value because of the relatively short periods to maturity of these instruments and low risk of credit.

The carrying amount of receivable under finance leases approximates their fair value since the interest rate approximates current market rates. On initial recognition the fair value of amounts receivable under finance leases and long-term debt was established using a discounted cash-flow model.

Certain of the Corporation’s financial assets are measured at fair value at the end of each reporting period. The following table provides information about how the fair values of these financial assets are determined:


	As at December 31, 2014
	Fair value & Carrying value $000’s		Level 1		Level 2		Level 3
Funds- Available for sale		173,799		173,799		—		—
Bonds- Available for sale		122,528		122,528		—		—
Convertible debentures- Fair value through profit/loss		19,358		8,278		11,080		—
Equity in quoted companies—Available for sale		84,350		84,350		—		—
Equity in private companies—Available for sale		10,391		—		—		10,391

Total financial assets		410,426		388,955		11,080		10,391

The fair values of other financial assets and liabilities measured at carrying value on the statements of financial position are as follows:


	As at December 31, 2014
	Fair value $000’s		Level 1		Level 2		Level 3
Promissory note		3,783		—		3,783		—
First lien term loans		2,291,497		2,291,497		—		—
Second lien term loan		917,639		917,639		—		—
Credit Facilities and Senior Facility		284,041		—		284,041		—
Mezzanine Facility		127,488		—		127,488		—
2013 Debentures		30,006		30,006		—		—

Total financial assets and liabilities		3,654,454		3,239,142		415,312		—

- 45 -


	As at December 31, 2013
	Fair value & Carrying value $000’s		Level 1		Level 2		Level 3
Convertible debentures- Fair value through profit/loss		3,850		—		—		3,850
Equity in private companies—Available for sale		5,400		—		—		5,400

Total financial assets		9,250		—		—		9,250

The fair values of other financial assets and liabilities measured at carrying value on the statements of financial position are as follows:


	As at December 31, 2013
	Fair value $000’s		Level 1		Level 2		Level 3
Credit Facilities and Senior Facility		168,474		—		168,474		—
2013 Debentures		30,030		30,030		—		—

Total financial assets and liabilities		198,504		30,030		168,474		—

Level 1 assets include those assets where fair value can easily be derived from observable, quoted prices in active markets. Level 2 assets include those assets where fair value is not available from normal market pricing sources. Level 3 assets include those assets for which there is little to no activity for the asset or liability. The values of the majority of Level 3 assets and liabilities were obtained from internal pricing models, multiples of earnings, external transactions or by discounting projected cash flows. Financial assets and liabilities utilizing Level 3 inputs include private equities and private debt. There were no transfers in or out of level 3 during the year.

24. CAPITAL MANAGEMENT

The Corporation’s objective in managing capital is to ensure a sufficient liquidity position to market its products, to finance its sales and marketing activities, research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with property and equipment. The ability to fund these requirements in the future depends on the Corporation’s ability to continue generating additional cash flow from its operations.

Since inception, the Corporation has financed its liquidity needs, primarily through bank indebtedness, borrowings, hybrid instruments and issuance of capital stock. The Corporation meets all of its current liquidity requirements from the cash flow generated from its current operations.

The Corporation defines capital as its total equity attributable to shareholders.

The Corporation’s capital management objectives are to optimize capital structure with a view to both deleverage existing operations and minimize dilution by focusing improving profitability, repaying debt and launching opportunistic stock buy-back programs.

The Corporation believes that funds from operations, as well as existing and future financial resources should be sufficient to meet the Corporation’s requirements beyond December 31, 2015.

On August 1 2014, an additional credit facility of USD $100 million five-year first lien revolving credit facility priced at Libor plus 4.00% was secured. The credit facility can be used for working capital and general corporate purposes.

As at December 31, 2014, the outstanding amount of the first lien revolving credit facility is $nil (December 31, 2013- $nil).

- 46 -

25. GEOGRAPHIC INFORMATION

The Corporation operates within two segments: its B2C operation, which starting in the third quarter of 2014 now comprises the vast majority of revenues, and its B2B operation. Revenues from external customers, attributed to countries based on location of the customer, are as follows:


	For the year ended
	December 31, 2014 $000’s		December 31, 2013 $000’s
Geographic Area
Americas		203,572		105,839
Europe		423,618		40,044
Rest of world		61,032		9

		688,222		145,892

The distribution of some of the Corporation’s non-current assets (goodwill, intangible assets and property and equipment) by geographical location is as follows:


	December 31, 2014 $000’s		December 31, 2013 $000’s
Geographic Area
Americas		200,122		167,366
Europe (principally Isle of Man)		5,612,002		36,192
Rest of world		738		—

		5,812,862		203,558

26. STATEMENT OF CASH-FLOWS

Changes in non-cash operating elements of working capital is as follows:


	For the year ended
	December 31, 2014 $000’s			December 31, 2013 $000’s
Accounts receivable		(3,381	)		6,129
Prepaid expenses		5,194			5,033
Accounts payable and accrued liabilities		16,996			(6,839	)
Provisions		(17,130	)		(8,365	)
Customer deposits		(9,452	)		(8,995	)
Other		8,050			(74	)

		277			(13,111	)

27. RELATED PARTY TRANSACTIONS

Key Management of the Corporation includes, the members of the Board of Directors, as well as the Chairman and Chief Executive Officer, Chief Financial Officer, Executive Vice-President of Corporate Development and General Counsel, and Key Officers of the B2C and B2B operations. Their compensation includes the following:

- 47 -


	December 31, 2014 $000’s		December 31, 2013 $000’s
Salaries, bonuses and short term employee benefits		3,841		1,107
Director retainers		206		147
Share based payments		2,143		296

		6,190		1,550

The remuneration of the Chairman, Chief Executive Officer, Chief Financial Officer and Executive Vice-President of Corporate Development and General Counsel consists primarily of a salary and share based payments.

28. REVENUES

The Corporation revenues consist of the following categories:


	For the year ended
	December 31, 2014 $000’s		December 31, 2013 $000’s
B2C		547,221		—
Participation leases and arrangements		97,543		77,026
Product sales		19,204		7,663
Software licensing		21,055		46,996
Other		3,199		14,207

		688,222		145,892

29. SEGMENTED INFORMATION

Segmented earnings (loss) from continuing operations before income taxes


	December 31, 2014									December 31, 2013
	B2B $000’s			B2C $000’s			Total $000’s			B2B $000’s			B2C $000’s		Total $000’s
Revenue		141,001			547,221			688,222			145,892			—		145,892
Gain on sale of subsidiary		19,562			—			19,562			—			—		—
Income from investments		9,976			—			9,976			2,414			—		2,414
Selling expense		(13,403	)		(88,090	)		(101,493	)		(13,728	)		—		(13,728	)
General and administrative expense		(160,365	)		(269,731	)		(430,096	)		(108,915	)		—		(108,915	)
Financial expense		(21,419	)		(77,149	)		(98,568	)		(20,530	)		—		(20,530	)
Acquisition related expense								(22,387	)							(1,332	)

Earnings (loss) from continuing operations before income taxes		(24,648	)		112,251			65,216			5,133			—		3,801

Current income tax								8,642								9,995
Deferred income tax								(614	)							(1,429	)

Net earnings (loss) from continuing operations		(24,648	)		112,251			57,188			5,133			—		(4,765	)

- 48 -

Other segmented information:


	December 31, 2014									December 31, 2013
	B2B $000’s			B2C $000’s			Total $000’s			B2B $000’s			B2C $000’s		Total $000’s
Finance income		1,284			—			1,284			453			—		453
Depreciation & amortization		35,425			59,051			94,476			29,966			—		29,966
Impairment		15,145			22			15,167			2,493			—		2,493
Total Assets		411,705			6,755,323			7,167,028			440,831			—		440,831
Total Liabilities		(525,297	)		(4,520,538	)		(5,045,835	)		(246,484	)		—		(246,484	)

30. DISCONTINUED OPERATIONS

As the Corporation focuses on its B2C operations, on November 24, 2014, Amaya divested Ongame Network Ltd. (“Ongame”), its B2B poker and platform provider, to NYX Gaming Group Ltd. (“NYX Gaming Group”). Concurrently with the transaction, Amaya made a strategic investment in NYX Gaming Group via a subscription of a $9 million unsecured convertible debenture, which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. Interest and principal are payable in kind in NYX Gaming Group common shares at Amaya’s option.

The Corporation derecognized the net assets, resulting in a loss of $ 32,219,000 that was recognized in net loss from discontinued operations in the consolidated statement of earnings (loss). The Corporation has provided for the full minimum revenue guarantee of CAD $4.2 million payable within the next 12 months.

Results from Discontinued Operations


	For the year ended
	December 31, 2014 $000’s			December 31, 2013 $000’s
Revenues		4,871			8,637
Expenses		(32,571	)		(31,965	)

Results from operating activities before income taxes		(27,700	)		(23,328	)
Income taxes		598			1,080

Results from operating activities, net of income taxes		(28,298	)		(24,408	)
Loss on sale of discontinued operations, net of income taxes		(32,219	)		—
Minimum revenue guarantee		(4,200	)		—

Net loss from discontinued operations		(64,717	)		(24,408	)

Basic earnings (loss) from discontinued operations per common share (note 33)	$	(0.59	)	$	(0.27	)

Diluted earnings (loss) from discontinued operations per common share (note 33)	$	(0.59	)	$	(0.27	)

Cash Flows from (Used In) Discontinued Operations


	For the year ended
	December 31, 2014 $000’s			December 31, 2013 $000’s
Net cash used in operating activities		(23,563	)		(30,319	)
Net cash used in investing activities		(6,929	)		(7,196	)
Net cash from financing activities		23,121			40,356

Net cash flows		(7,371	)		2,841

- 49 -

Effect on the Financial Position of the Corporation

The assets, liabilities and reserves disposed of in connection with the divestiture of Ongame were as follows:


	$000’s (credit)/debit
Cash		(3,277	)
Accounts receivable		(2,315	)
Income tax receivable		(612	)
Prepaid expenses and deposits		(666	)
Goodwill and intangible assets		(35,553	)
Property and equipment		(1,076	)
Deferred development costs		(8,526	)
Accounts payable and accrued liabilities		7,226
Customer deposits		1,898
Deferred income taxes		6,152
Cumulative translation adjustment		4,530

		(32,219	)

31. BUSINESS COMBINATIONS

Diamond Game

The acquisition of 100% of the shares of Diamond Game has been accounted for using the acquisition method and the results of operations are included in the consolidated statement of earnings (loss) from the date of acquisition, which was February 14, 2014.

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $CAD 000’S
Property and equipment		6,442
Intangible assets		7,264
Goodwill (tax deductible)		18,166
Deferred income tax liability		(2,761	)
Other		(522	)

Total consideration		28,589
Cash consideration		22,061
Fair value of holdback on purchase price		6,528

		28,589

Of the CAD $28.59 million (USD$26.03 million) consideration paid by Amaya in connection with the acquisition of Diamond Game, there was a holdback of CAD $7.69 million (USD $7 million) which is still payable at December 31, 2014.

- 50 -

The main factors leading to the recognition of goodwill are the synergistic growth and revenues expected to be created from the strong strategic fit between Amaya and Diamond Game. Diamond Game presents a variety of opportunities to leverage each business’ product and intellectual property suite across a broader combined platform with greater geographic presence and creates revenue synergies by expanding Amaya’s penetration in the United States, accelerating Amaya’s penetration in Lottery markets, and potentially extending Diamond Game’s offering into new markets in Canada and Europe.

If the acquisition had occurred on January 1, 2014, Diamond Game would have contributed USD $18.52 million and USD ($1.04) million to consolidated revenues and net earnings (loss), respectively. Since the date of acquisition, Diamond Game has contributed USD $16.18 million and USD ($0.44) million to consolidated revenues and net earnings (loss), respectively.

Acquisition-related costs directly related to the Diamond Game acquisition were USD$1,145,834 and were expensed in net earnings during the year ended December 31, 2013 and in the period ended March 31, 2014.

Oldford Group Limited

The acquisition of 100% of the shares of Oldford Group Limited (“Oldford Group”) has been accounted for using the acquisition method and the results of operations are included in the consolidated statements of earnings (loss) from the date of acquisition, which was August 1, 2014.

The following table summarizes the preliminary estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $CAD 000’s
Cash		390,639
Accounts receivable		123,117
Prepaid expenses and deposits		38,599
Investments		373,692
Property and equipment		51,369
Accounts payables and accrued liabilities		(111,818	)
Other payables		(105,982	)
Provisions		(21,844	)
Customer deposits		(663,594	)
Intangible assets		2,213,606
Goodwill		3,055,410
Deferred income tax liability		(22,820	)
Other		(2,759	)

Total consideration		5,317,615

Fair value of deferred payment		391,000

		5,708,615

The main factors leading to the recognition of goodwill are the number of benefits to Amaya’s shareholders the Corporation believes the acquisition will provide. These include the following:

•

Acquisition of Leading Brands: The acquisition has resulted in a wholly-owned subsidiary of Amaya owning two global leading brands in online poker, PokerStars and Full-Tilt

•

Leading Liquidity: PokerStars.com average cash game liquidity is approximately eight times larger than the next competitor, and PokerStars is a leader in almost every regulated market in which it operates.

- 51 -

•

New Verticals: Introduction of online real money casino and/or online sportsbook in those markets where permitted, are new opportunities for cross selling to the existing poker player base and to acquire new customers.

If the acquisition had occurred on January 1, 2014, Oldford Group would have contributed CAD$1.26 billion and CAD$462 million to consolidated revenues and net earnings, respectively. Since the date of acquisition, Oldford Group has contributed CAD$547 million and CAD$230 million to consolidated revenues and net earnings, respectively.

Acquisition-related costs directly related to the Rational Group Acquisition were USD$17.81 million and were expensed in net earnings in the year ended December 31, 2014.

The Rational Group Acquisition includes a deferred payment of USD$400 million which shall be subject to adjustment, payable on February 1, 2017, based upon the regulatory status of online poker in Russia within 30 months of close. If Russia continues to operate under the status quo, the Corporation will owe USD$400 million. If Russia formally regulates online poker and the Corporation obtains a license in the newly regulated framework and there is evidence that the new tax rate would be “beneficial”, as defined in the merger agreement, then the Corporation will owe up to USD$550 million. If Russia deems online poker illegal, the Corporation will owe USD$100 million.

The current fair value of the deferred payment of USD$ 346 million (CAD$ 391 million) is recorded in Provisions (see note 15) and was calculated using a 6% discount rate, equivalent to the discount rate negotiated by the parties in case of early payment of the deferred payment.

On March 11, 2015, the Corporation commented on a tax dispute between a subsidiary of Rational Group and Italian tax authorities related to operations of such subsidiary, particularly under the PokerStars brand, in Italy prior to the Rational Group Acquisition. The Corporation was aware of the dispute prior to Rational Group Acquisition, but believes Rational Group has operated in compliance with the applicable local tax regulations and has paid €120 million in local taxes during the period subject to the dispute.

Although management is currently assessing the potential exposure, if any, the Corporation believes that any tax liability as part of this matter are indemnifiable by the former owners of the Oldford Group under the agreement governing the transactions, subject to certain conditions. Pursuant to this agreement, the sellers have agreed to indemnify the Corporation for pre-closing tax liabilities including amounts held in an escrow account plus an additional amount not held in escrow and reserved solely for tax claims.

The purchase price allocation does not reflect the impact on any contingencies arising from circumstances that were present on the date of acquisition on August 1, 2014. In the event that a measurable outcome is ascertainable as a result of these contingencies during the reference period spanning one year from the date of acquisition, the impact will be recorded as an adjustment to purchase price allocation reflecting both the contingent liability and the offsetting indemnification asset. Any impact that becomes both measurable and more likely than not after the reference period will not be reflected as an adjustment to the purchase price allocation.

PYR Software Ltd

The acquisition of 100% of the shares of PYR Software Ltd has been accounted for using the acquisition method and the results of operations are included in the consolidated statement of earnings (loss) from the date of acquisition, which is September 1, 2014.

- 52 -

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $000’s
Cash		13,552
Accounts receivable		922
Investment tax credits receivable		1,422
Accounts payable and accrued liabilities		(8,277	)
Income tax payable		(3,300	)
Other		697
Goodwill		8,144

Total cash consideration		13,160

PYR Software Ltd previously provided software development and support for the Oldford Group. Amaya acquired the company as it was the primary outsourced games studio and development center supporting the Oldford Group business.

If the acquisition had occurred on January 1, 2014, PYR Software Ltd would have contributed nil to consolidated revenues and CAD$(42.66) million net earnings, respectively. Since the date of acquisition, PYR Software Ltd. has contributed nil to consolidated revenues and CAD$(14.22) million net earnings, respectively.

Acquisition-related costs directly related to the PYR Software Ltd. acquisition was CAD$32,000 and was expensed in the consolidated statement of earnings (loss) in the year ended December 31, 2014.

- 53 -

32. EXPENSES CLASSIFIED BY NATURE


	For the year ended
	December 31, 2014 $000’s			December 31, 2013 $000’s
Financial
Interest and bank charges		134,486			22,693
Foreign exchange		(35,918	)		(2,163	)

		98,568			20,530
General and administrative
Gaming duties		45,288			—
Processor costs		30,713			—
Office		59,855			21,166
Salaries and fringe benefits		133,572			40,778
Stock-based compensation		6,237			2,030
Depreciation of property and equipment		18,757			12,362
Amortization of deferred development costs		1,834			850
Amortization of intangible assets		73,885			16,108
Professional fees		37,251			11,659
Bad debt		4,888			1,059
Impairment		15,167			2,493
Loss on disposal of assets		2,649			410

		430,096			108,915
Selling		101,493			13,728

Acquisition-related costs
Professional fees		22,387			1,924
Gain on settlement of holdback of purchase price		—			(592	)

		22,387			1,332

- 54 -

33. NET EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) from continuing operations and earnings (loss) per common share for the years ended December 31, 2014 and 2013.


	For the years ended
	December 31, 2014			December 31, 2013
Numerator
Numerator for basic and diluted (loss) per common share – net earnings (loss) from continuing operations	$	57,188,000		$	(4,765,000	)

Numerator for basic and diluted (loss) per common share – net earnings (loss)	$	(7,529,000	)	$	(29,173,000	)

Denominator
Denominator for basic earnings (loss) per common share – weighted average number of common shares		109,943,961			89,490,789

Effect of dilutive securities
Stock options		2,837,519			1,783,914
Warrants		5,255,720			2,011,863
Convertible preferred shares		19,769,648			—

Effect of dilutive securities		27,862,887			3,795,777

Dilutive potential common shares		137,806,848			93,286,566

Denominator for dilutive impact per common share – adjusted weighted number of shares		137,806,848			89,490,789
Basic earnings (loss) from continuing operations per common share	$	0.52		$	(0.05	)
Diluted earnings (loss) from continuing operations per common share	$	0.41		$	(0.05	)

Basic earnings (loss) per common share	$	(0.07	)	$	(0.33	)
Diluted earnings (loss) per common share	$	(0.07	)	$	(0.33	)

For the year ended December 31, 2013, the diluted loss per share was the same as the basic net loss per share since the dilutive effect of stock options and warrants was not included in the calculation; otherwise the effect would have been anti-dilutive. Accordingly, the diluted loss per share for the period was calculated using the basic weighted average number of common shares outstanding.

34. SALE OF WAGERLOGIC MALTA HOLDINGS LTD.

On February 11, 2014, the Corporation announced that pursuant to a Share Purchase Agreement dated November 27, 2013, one of its subsidiaries has completed the previously announced sale to Goldstar Acquisitionco Inc. of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. for $70 million, less a closing working capital adjustment satisfied through cash consideration of $52.50 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date.

Subsidiaries of Amaya supply WagerLogic with services to the InterCasino Business pursuant to a services agreement.

The Share Purchase Agreement includes an earn out agreement pursuant to which the Corporation thereunder may receive additional cash consideration of up to US$20 million payable on the first and second anniversary date from closing based on the achievement of certain revenue targets, as well as a minimum revenue guarantee agreement pursuant to which the Corporation, in the first two years following the closing, may pay cash consideration of up to US$19 million annually if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be USD$36.27 million ($42.08 million CAD), of which (i) USD $20.61 million ($23.92 million CAD) is recorded in Provisions (see note 15); (ii) USD $5.63 million ($6.53 million CAD) was offset against the promissory note of $10 million CAD; (iii) USD $6.28 million ($7.29 million CAD) was paid, and, (iv) USD $ 3.75 million ($4.35 million CAD) was included in accounts payable. No earn out was received or receivable by the Corporation at December 31, 2014. The resulting gain on sale of Wagerlogic of $19.56 million was presented in net earnings from continuing operations.

- 55 -

35. SUBSEQUENT EVENTS

Normal Course Issuer Bid

On February 13, 2015, Amaya announced that the Toronto Stock Exchange (the “TSX”) approved its notice of intention to make a normal course issuer bid (“2015 NCIB”) to purchase for cancellation up to 6,644,737 common shares, representing approximately 5% of Amaya’s issued and outstanding as of January 26, 2015. The Corporation may purchase the common shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or by such other means as may be permitted by the TSX rules and policies. The Corporation will determine in its sole discretion from time to time the actual number of common shares that it will purchase and the timing of any such purchases. In accordance with the applicable TSX rules, daily purchases under the 2015 NCIB may not exceed 161,724 common shares, representing 25% of the average daily trading volume of the common shares for the six-month period ending on January 31, 2015, and the Corporation may make, once per calendar week, a block purchase of common shares not owned, directly or indirectly, by insiders of Amaya that exceeds the daily repurchase restriction. The 2015 NCIB commenced on February 18, 2015 and will remain in effect until the earlier of February 17, 2016 or the date on which the Corporation has purchased the maximum number of common shares permitted under the 2015 NCIB. As of March 30, 2015, the Corporation has not purchased any common shares pursuant to the 2015 NCIB. Amaya is making the 2015 NCIB because it believes that, from time to time, the prevailing market price of its common shares may not reflect the underlying value of the Corporation, and that purchasing common shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders.

Cross Currency Swap

Sale of Cadillac Jack

On March 30, 2015, Amaya announced that it entered into a definitive agreement to sell Cadillac Jack (the “CJ Sale”) for approximately $476 million comprising cash consideration of $461 million, subject to adjustment, and a $15 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, Amaya anticipates closing the CJ Sale in 2015. Amaya anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Credit Facilities, Senior Facility and Mezzanine Facility (each as defined below). There can be no assurance as to if and when the CJ Sale will occur.

36. COMPARATIVE INFORMATION

Non-material prior year reclassifications have been made to the consolidated financial statements and notes thereto to conform with the current year presentation.

- 56 -

LOGO

EX-99.8

Exhibit 99.8

FORM 13-502F1

CLASS 1 REPORTING ISSUERS – PARTICIPATION FEE

Reporting Issuer Name: Amaya Inc.

End date of last completed fiscal year: December 31, 2014

End date of reference fiscal year: December 31, 2011

(A reporting issuer’s reference fiscal year is the reporting issuer’s last fiscal year ending before May 1, 2012, provided that it was a reporting issuer at the end of that fiscal year and, if it became a reporting issuer in that year as a consequence of a prospectus receipt, all or substantially all of its securities were listed or quoted on a marketplace at the end of that fiscal year. In any other case, it is the reporting issuer’s last completed fiscal year.

Market value of listed or quoted securities:

Total number of securities of a class or series outstanding as at the end of the issuer’s reference fiscal year

50,117,947 (i)

Simple average of the closing price of that class or series as of the last trading day of each month in the reference fiscal year, computed with reference to clauses 2.7(1)(a)(ii) (A) and (B) and subsection 2.7(2) of the Rule

2.67 (ii)

Market value of class or series

(i) x (ii) =

133,814,918.49 (A)

(Repeat the above calculation for each other class or series of securities of the reporting issuer that was listed or quoted on a marketplace in Canada or the United States of America at the end of the reference fiscal year)

(B)

Market value of other securities not valued at the end of any trading day in a month: (See paragraph 2.7 (1)(b) of the Rule)

(Provide details of how value was determined)

(C)

(Repeat for each class or series of securities to which paragraph 2.7(1)(b) of the Rule applies)

(D)

Capitalization for the reference fiscal year

(Add market value of all classes and series of securities)

(A)+(B)+(C)+(D)

133,814,918.49

Participation Fee (determined without reference to subsection 2.3(3.1) of the Rule

13,340 (iii)

(From Appendix A of the Rule, select the participation fee beside the capitalization calculated above)

Did the issuer become a reporting issuer in the previous fiscal year as result of a prospectus receipt? If no, participation fee equals (iii) amount above

(iii)

If yes, prorate (iii) amount as calculated in subsection 2.2(3.1) of the Rule to determine participation fee.

(iv)

Late Fee, if applicable

(As determined under section 2.5 of the Rule)

EX-99.9

Exhibit 99.9

Form 52-109F1R

Certification of Refiled Annual Filings

This certificate is being filed on the same date that Amaya Inc. (the “issuer”) has refiled its annual financial statements for the year ended December 31, 2014.

I, David Baazov, Chief Executive Officer of Amaya Inc., certify the following:

Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of the issuer for the financial year ended December 31, 2014.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2

N/A

5.3	*Limitation on scope of design:* The issuer has disclosed in its annual MD&A

(a)

the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(i)

N/A;

(ii)

N/A;

(iii)

a business that the issuer acquired not more than 365 days before the issuer’s financial year end; and

(b)

summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.

6.	*Evaluation:* The issuer’s other certifying officer(s) and I have

(a)

evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and

(b)

evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

(i)

our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and

(ii)

N/A

Reporting changes in ICFR: The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on October 1, 2014 and ended on December 31, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.

Date: May 1, 2015

/s/ David Baazov

David Baazov

Chief Executive Officer

EX-99.10

Exhibit 99.10

Form 52-109F1R

Certification of Refiled Annual Filings

This certificate is being filed on the same date that Amaya Inc. (the “issuer”) has refiled its annual financial statements for the year ended December 31, 2014.

I, Daniel Sebag, Chief Financial Officer of Amaya Inc., certify the following:

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

(ii)

(b)

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2

N/A

5.3	*Limitation on scope of design:* The issuer has disclosed in its annual MD&A

(a)

the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(i)

N/A;

(ii)

N/A;

(iii)

a business that the issuer acquired not more than 365 days before the issuer’s financial year end; and

(b)

6.	*Evaluation:* The issuer’s other certifying officer(s) and I have

(a)

(b)

evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

(i)

our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and

(ii)

N/A

Date: May 1, 2015

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

EX-99.11

Exhibit 99.11

LOGO

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED

MARCH 31, 2015

(unaudited)

May 14, 2015

TABLE OF CONTENTS


INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			1
Condensed Consolidated Statements of Financial Position			1
Condensed Consolidated Statements of Changes in Equity			2
Condensed Consolidated Statements of Earnings			3
Condensed Consolidated Statements of Comprehensive Income			4
Condensed Consolidated Statements of Cash Flows			5

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			6
1. Nature of business			6
2. Basis of presentation and summary of significant accounting policies			6
3. Goodwill and intangible assets			8
4. Provisions			9
5. Customer deposits			10
6. Long-term debt			10
7. Share capital			12
8. Reserves			13
9. Fair value			17
10. Related party transactions			19
11. Segmented information			19
12. Assets and liabilities classified as held for sale and discontinued operations			20
13. Business combinations			22
14. Expenses classified by nature			22
15. Net earnings per share			23
16. Sale of WagerLogic Malta Holdings Ltd.			23
17. Change in functional currency			23
18. Hedging			24
19. Subsequent events			24
20. Prior period adjustment			25
21. Comparative information			25

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


Canadian dollars	March 31, 2015 $000’s unaudited			December 31, 2014 $000’s audited
ASSETS
Current
Cash		371,647			425,453
Restricted cash		123,025			112,530
Accounts receivable		113,344			159,076
Income tax receivable		19,692			20,717
Inventories		1,334			10,217
Current maturity of receivable under finance lease		–			699
Prepaid expenses and deposits		35,213			36,947
Investments		540,668			400,035
Derivatives (note 18)		42,611			–
Promissory note		4,001			3,783
Assets classified as held for sale (note 12)		262,363			–

		1,513,898			1,169,457

Restricted cash		108,461			67,747
Prepaid expenses and deposits		29,557			27,002
Investments		12,183			12,519
Goodwill and intangible assets (note 3)		6,043,923			5,718,051
Property and equipment		63,517			94,811
Deferred development costs (net of accumulated amortization of $6.29 million; 2014 – $6.02 million)		18,146			14,054
Receivable under finance lease		–			868
Investment tax credits receivable		4,386			7,731
Deferred income taxes		45,131			54,788

		7,839,202			7,167,028


LIABILITIES
Current
Accounts payable and accrued liabilities		151,533			178,990
Other payables		243,822			212,691
Provisions (note 4)		60,258			46,479
Customer deposits (note 5)		611,268			600,966
Income tax payable		32,454			32,966
Current maturity of long-term debt (note 6)		39,058			11,451
Liabilities classified as held for sale (note 12)		455,291			–

		1,593,684			1,083,543

Other payables		2,469			5,527
Deferred revenue		860			2,459
Long-term debt (note 6)		3,345,215			3,494,547
Provisions (note 4)		455,668			412,971
Deferred income taxes		27,989			46,788

		5,425,885			5,045,835


EQUITY
Share capital (note 7)		1,685,107			1,683,572
Reserves (note 8)		762,164			484,538
Deficit		(33,954	)		(46,917	)

		2,413,317			2,121,193

		7,839,202			7,1 67,028

See accompanying notes

Approved and authorized for issue on behalf of the Board on May 13, 2015

(Signed) “Daniel Sebag”, Director

Daniel Sebag, CFO

(Signed) “David Baazov”, Director

David Baazov, CEO

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the three month periods ended March 31, 2015 and 2014

Share Capital

Canadian dollars- unaudited

Common
shares
number

Common
shares
amount
$000’s

Convertible
preferred
shares
number

Convertible
preferred
shares
amount
$000’s

Reserves
(note 8)
$000’s

Deficit
$000’s

Total equity
$000’s

Balance – January 1, 2014

94,078,297

220,683

–

13,052

(39,388

)

194,347

Net earnings (Adjusted – note 20)

–

38,960

Other comprehensive income
(Adjusted – note 20)

–

3,045

–

3,045

Total comprehensive income

–

3,045

38,960

42,005

Issue of common shares in relation to exercised warrants

4,800

–

(10

)

–

Issue of common shares in relation to exercised employee stock options

120,923

431

–

(87

)

–

344

Share-based compensation

–

753

–

753

Deferred income taxes in relation to transaction costs

–

(118

)

–

181

–

Balance – March 31, 2014
(Adjusted – note 20)

94,204,020

221,036

–

16,934

(428

)

237,542

Balance – January 1, 2015

132,844,341

939,533

1,139,356

744,039

484,538

(46,917

)

2,121,193

Net earnings

–

12,963

Other comprehensive income

–

274,427

–

274,427

Total comprehensive income

–

274,427

12,963

287,390

Issue of common shares in relation to exercised warrants

260,675

1,072

–

(122

)

–

950

Issue of common shares in relation to exercised employee stock options

63,570

463

–

(105

)

–

358

Conversion of preferred shares

4,592

107

(107

)

(107

)

–

Share-based compensation

–

3,426

–

3,426

Balance – March 31, 2015

133,173,178

941,175

1,139,249

743,932

762,164

(33,954

)

2,413,317

See accompanying notes

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


	For the three-month periods ended March 31,
Canadian dollars – unaudited	2015 $000’s (except per share data)			2014 $000’s (except per share data) (Adjusted – note 20)
Revenues		340,133			12,842

Expenses (note 14)
Selling		59,043			2,980
General and administrative		193,756			12,765
Financial		65,763			(740	)
Acquisition-related costs		2,797			2,585

		321,359			17,590

Gain on sale of subsidiary (note 16)		–			49,373
Income (loss) from investments		4,352			(99	)

Net earnings from continuing operations before income taxes		23,126			44,526
Current income taxes		2,893			1,041
Deferred income taxes		(2,465	)		(888	)

Net earnings from continuing operations		22,698			44,373
Net loss from discontinued operations (net of tax) (note 12)		(9,735	)		(5,413	)

Net earnings		12,963			38,960

Basic earnings from continuing operations per common share (note 15)	$	0.17		$	0.47
Diluted earnings from continuing operations per common share (note 15)	$	0.11		$	0.46

Basic earnings per common share (note 15)	$	0.10		$	0.41
Diluted earnings per common share (note 15)	$	0.06		$	0.40

See accompanying notes

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the three-month periods ended March 31,
Canadian dollars- unaudited	2015 $000’s			2014 $000’s (Adjusted –note 20)

Net earnings		12,963			38,960


*Items that may be reclassified subsequently to net earnings*

Unrealized gains on available-for-sale investments		19,875			684
Income tax benefit (expense)		(1,130	)		–
Realized gains on available-for-sale investments reclassified to net earnings		(2,544	)		–

		16,201			684


Unrealized gains on translation of foreign subsidiaries		361,695			2,361
Unrealized losses on USD liabilities designated as hedge of net investment in foreign subsidiaries		(81,480	)		–
Other		1,832			–

		282,047			2,361


Unrealized gains (losses) on cash flow hedges		41,450			–
Realized (gains) losses transferred to net earnings		(65,271	)		–

		(23,821	)		–

Other comprehensive income		274,427			3,045

Total comprehensive income		287,390			42,005

See accompanying notes

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the three-month periods ended March 31,
Canadian dollars- unaudited	2015 $000’s			2014 $000’s (Adjusted – note 20)
Operating activities
Net earnings		12,963			38,960
Interest accretion		14,791			443
Unrealized loss (gain) on foreign exchange		(26,501	)		(467	)
Depreciation of property and equipment		5,472			3,666
Amortization of intangible assets		37,749			5,403
Amortization of deferred development costs		272			710
Stock-based compensation		3,426			753
Finance lease		235			(344	)
Gain on sale of subsidiary		–			(49,373	)
Impairment of property and equipment, intangible assets, and finance leases		2,606			–
Unrealized gain on marketable securities		(4,352	)		–
Income tax expense recognized in net earnings		8,002			1,924
Interest expense		61,026			3,538
Other		(2,598	)		728

		113,091			5,941
Changes in non-cash operating elements of working capital		30,597			184
Interest paid		(62,326	)		(3,544	)
Income taxes (paid) received		(2,034	)		(2,013	)

		79,328			568

Financing activities
Issuance of capital stock in relation with exercised warrants		950			30
Issuance of capital stock in relation with exercised employee stock options		358			344
Repayment of long-term debt		(6,875	)		(726	)

		(5,567	)		(352	)

Investing activities
Deferred development costs		(6,935	)		(1,900	)
Additions to property and equipment		(8,439	)		(2,465	)
Acquired intangible assets		(1,161	)		(2,477	)
Purchase of investments		(76,492	)		(2,211	)
Proceeds from sale of subsidiary		–			52,500
Cash disposed of in discontinued operations		(11,973	)		–
Restricted cash		(42,321	)		–
Settlement of minimum revenue guarantee		(4,655	)		–
Acquisition of subsidiaries		–			(18,988	)
Other		113			118

		(151,863	)		24,577

Increase (decrease) in cash		(78,102	)		24,793
Cash – beginning of period		425,453			93,640
Unrealized foreign exchange difference on cash		24,296			838

Cash – end of period		371,647			119,271

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS

Amaya Inc. (“Amaya” or the “Corporation”), formerly Amaya Gaming Group Inc., is a leading provider of technology-based products and services in the global gaming and interactive entertainment industries. Amaya has two reportable segments, Business-to-Consumer (“B2C”) and Business-to-Business (“B2B”). For the period ended March 31, 2015, B2C consisted of Rational Group (as defined below), while B2B, after accounting for discontinued operations, consisted of Amaya’s B2B interactive gaming solutions.

Amaya’s primary business is its B2C operations, which it acquired through the acquisition of Oldford Group Limited (now known as Amaya Group Holdings (IOM) Limited) (“Oldford Group”), parent company of Rational Group Ltd. (“Rational Group”) on August 1, 2014 (the “Rational Group Acquisition”). Rational Group operates globally and conducts its principal activities from its headquarters in the Isle of Man. Rational Group owns and operates gaming and related businesses and brands including, among others, PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. Amaya’s B2B operations, after accounting for discontinued operations, currently consists of the operations of certain of its subsidiaries, which offer interactive gaming solutions for the regulated gaming industry worldwide.

Amaya’s registered head office is located at 7600 Trans-Canada Highway, Montréal, Québec, Canada, H9R 1C8 and it is listed on the Toronto Stock Exchange (“TSX”) under the symbol “AYA”.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These interim condensed consolidated financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”, and International Financial Reporting Standards as issued by IASB, “IFRS”) and in accordance with International Accounting Standard (“IAS”) 34—Interim Financial Reporting as issued by IASB, and do not include all of the information required for full annual consolidated financial statements. The accounting policies and methods of computation applied in these interim condensed consolidated financial statements are consistent with those applied by the Corporation in its audited consolidated financial statements as at and for the year ended December 31, 2014 and related notes contained therein (the “2014 Financial Statements”), except for the newly adopted accounting policies described below that have no impact on the comparative period presented in these interim condensed consolidated financial statements and no impact on the 2014 Financial Statements. These interim condensed consolidated financial statements should be read in conjunction with the 2014 Financial Statements.

New Significant Accounting Policies

Derivative Financial Instruments

From time to time the Corporation uses derivative instruments for risk management purposes. The Corporation does not use derivative instruments for speculative trading purposes. All derivatives are recorded at fair value on the statements of financial position. The method of recognizing unrealized and realized fair value gains and losses depends on whether the derivatives are designated as hedging instruments. For derivatives not designated as hedging instruments, unrealized gains and losses are recorded in financial expenses on the condensed consolidated statements of earnings. For derivatives designated as hedging instruments, unrealized and realized gains and losses are recognized according to the nature of the hedged item.

Derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, broker or dealer quotations or alternative pricing sources. To qualify for hedge accounting, the relationship between the hedged item and the hedging instrument must meet several strict conditions on documentation, probability of occurrence, hedge effectiveness and reliability of measurement. If these conditions are not met, then the relationship does not qualify for hedge accounting treatment and both the hedged item and the hedging instrument are reported independently, as if there was no hedging relationship.

The Corporation currently uses derivatives for cash flow hedges. The effective portion of the change in fair value of the hedging instrument is recorded in other comprehensive income, while the ineffective portion is recognized immediately in net earnings. Gains and losses on cash flow hedges that accumulate in other comprehensive income are transferred to net earnings in the same period the hedged item affects net earnings. Gains and losses on cash flow hedges are immediately reclassified from other comprehensive income to net earnings when it is probable that a forecasted transaction is no longer expected to occur.

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in the consolidated statements of comprehensive income. The gain or loss relating to the ineffective portion is recognized in the consolidated statements of earnings. Gains and losses accumulated in other comprehensive income are included in the condensed consolidated statements of earnings when the foreign operation is partially disposed of or sold.

New Accounting Pronouncements – Not Yet Effective

IFRS 9, Financial Instruments

IFRS 9 also includes a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting.

An entity shall apply IFRS 9 retrospectively for annual periods beginning on or after January 1 2018, with early adoption permitted. The Corporation is currently evaluating the impact of applying this standard.

IFRS 15, Revenues from Contracts with Customers

On April 28, 2015, the IASB tentatively decided to postpone the initial January 1, 2017 effective date to January 1, 2018 with early adoption permitted. The Corporation is currently evaluating the impact of applying this standard.

3. GOODWILL AND INTANGIBLE ASSETS

Cost


	Software Technology $000’s			Customer Relationships $000’s			Brands $000’s		Goodwill $000’s			Other $000’s			Total $000’s
Balance – January 1, 2014		61,759			17,820			–		79,975			28,027			187,581
Additions		–			–			–		–			8,691			8,691
Additions through business combinations		125,569			1,560,542			530,187		3,081,720			4,572			5,302,590
Disposals		–			–			–		–			(3,017	)		(3,017	)
Discontinued operations (note 12)		–			(9,161	)		–		–			(2,048	)		(11,209	)
Translation		12,934			97,171			32,755		196,912			1,612			341,384

Balance – December 31, 2014		200,262			1,666,372			562,942		3,358,607			37,837			5,826,020

Additions		–			–			–		–			1,161			1,161
Disposals		–			–			–		–			(798	)		(798	)
Reclassified to assets held for sale (note 12)		(56,492	)		(13,166	)		–		(105,870	)		(16,061	)		(191,589	)
Translation		18,109			152,837			51,679		309,109			2,739			534,473

Balance – March 31, 2015		161,879			1,806,043			614,621		3,561,846			24,878			6,169,267

Accumulated Amortization and Impairments


	Software Technology $000’s			Customer Relationships $000’s			Brands $000’s		Goodwill $000’s		Other $000’s			Total $000’s
Balance – January 1, 2014		16,016			1,490			–		–		7,038			24,544
Amortization		23,737			45,737			–		–		6,866			76,340
Disposals		–			–			–		–		(1,302	)		(1,302	)
Impairments		–			–			–		–		6,176			6,176
Discontinued operations (note 12)		–			(1,254	)		–		–		(1,001	)		(2,255	)
Translation		2,478			1,680			–		–		308			4,466

Balance – December 31, 2014		42,231			47,653			–		–		18,085			107,969

Amortization		7,935			29,498			–		–		316			37,749
Disposals		–			–			–		–		(463	)		(463	)
Reclassified to assets held for sale (note 12)		(23,297	)		(1,360	)		–		–		(4,258	)		(28,915	)
Translation		3,297			4,916			–		–		791			9,004

Balance – March 31, 2015		30,166			80,707			–		–		14,471			125,344

Carrying Amount

Software
Technology
$000’s

Customer
Relationships
$000’s

Brands
$000’s

Goodwill
$000’s

Other
$000’s

Total
$000’s

At December 31, 2014

158,031

1,618,719

562,942

3,358,607

19,752

5,718,051

At March 31, 2015

131,713

1,725,336

614,621

3,561,846

10,407

6,043,923

A number of B2B-related intangible assets have been determined to be redundant to the Corporation’s core operations, which is currently its B2C operation. Impairment losses in the amount of $nil (December 31, 2014—$6.18 million) were therefore recognized during the period ended March 31, 2015.

Goodwill and intangible assets are allocated to the following cash generating units, or CGUs:


	March 31, 2015				December 31, 2014
	B2C 000’s		Other 000’s		B2C 000’s		Other 000’s
Software Technology		123,871		7,842		119,932		38,099
Customer Relationships		1,723,136		2,200		1,605,845		12,874
Brands		614,621		–		562,942		–
Goodwill		3,551,094		10,752		3,252,315		106,292
Other		4,945		5,462		4,016		15,736

4. PROVISIONS

The provisions in the interim condensed consolidated statements of financial position include, among other items, the provision for jackpots and player bonuses, the provision for deferred consideration primarily in connection with the Rational Group Acquisition and the minimum revenue guarantee in connection with the sale of WagerLogic Malta Holdings Ltd (note 16). The carrying amounts and the movements in the provisions during the three-month period ended March 31, 2015 and year ended December 31, 2014 are as follows:


	Jackpots and player bonuses $000’s			Contingent consideration $000’s			Minimum revenue guarantee $000’s			Other $000’s			Total $ 000’s
Balance – January 1, 2014		4,245			987			–			–			5,232
Provisions acquired on business combinations		23,194			400,975			–			–			424,169
Additional provision recognized		42,800			7,604			45,815			1,866			98,085
Payments		(60,244	)		–			(18,166	)		(7	)		(78,417	)
Accretion of discount		–			9,384			469			–			9,853
Reclassification		(648	)		256			–			109			(283	)
Foreign exchange translation (gains) losses		377			434			–			–			811

Balance at December 31, 2014		9,724			419,640			28,118			1,968			459,450

Current portion		9,724			8,535			28,118			102			46,479

Non-current portion		–			411,105			–			1,866			412,971


	Jackpots and player bonuses $000’s			Contingent consideration $000’s			Minimum revenue guarantee $000’s			Other $000’s			Total $ 000’s
Balance – January 1, 2015		9,724			419,640			28,118			1,968			459,450
Additional provision recognized		17,193			10			–			–			17,203
Payments		(5,750	)		–			(1,053	)		–			(6,803	)
Accretion of discount		–			6,482			119			–			6,601
Reclassified to liabilities held for sale		(371	)		(311	)		–			(2,078	)		(2,760	)
Foreign exchange translation (gains) losses		928			39,054			2,143			110			42,235

Balance at March 31, 2015		21,724			464,875			29,327			–			515,926

Current portion		21,724			9,207			29,327			–			60,258

Non-current portion		–			455,668			–			–			455,668

5. CUSTOMER DEPOSITS

Customer deposit liabilities relate to customer deposits which are held in segregated multiple bank accounts from those holding operational funds. Both PokerStars and Full Tilt hold customer deposits, along with winnings and any bonuses, in trust accounts from which money may not be removed if it would result in a shortfall of such deposits. These deposits are included in current assets in the condensed consolidated statements of financial position under cash and investments, which includes short term, highly liquid available for sale investments.

Additionally, the Corporation has $101.91 million in frequent player points, which are included in “other payables” under current liabilities in the condensed consolidated statements of financial position. Frequent player points relates to loyalty programs operated by the B2C business for its customers, which involves awarding customer loyalty points based on, among other factors, amounts wagered. The points can be used to make a wide variety of purchases in lieu of cash or can be exchanged for cash. Management has estimated the value of the liability using relevant historical information about the likelihood and magnitude of an outflow of resources, i.e., payment of frequent play points to loyal customers. The Corporation maintains sufficient overhead in cash and investments to cover the estimated future frequent player point liability.

6. LONG-TERM DEBT

The following is a summary of long-term debt outstanding at March 31, 2015 and December 31, 2014:


	March 31, 2015, Principal outstanding balance in local denominated currency 000’s		March 31, 2015 Carrying amount $000’s		December 31, 2014, Principal outstanding balance in local denominated currency 000’s		December 31, 2014 Carrying amount $000’s
USD First Lien Term Loan		1,741,250		2,136,431		1,745,625		1,956,220
USD Second Lien Term Loan		800,000		956,353		800,000		873,519
EUR First Lien Term Loan		199,000		263,045		199,500		271,388
Senior Facility (USD)		–		–		238,000		273,910
Mezzanine Facility (USD)		–		–		104,537		102,941
2013 Debentures (CAD)		30,000		28,444		30,000		28,020

Total long-term debt				3,384,273				3,505,998

Current portion				39,058				11,451

Non-current portion				3,345,215				3,494,547

(a) First and Second Lien Term Loans

On August 1, 2014, Amaya completed the Rational Group Acquisition, which was partly financed through the issuance of long term-debt, allocated into first and second lien term loans. The first lien term loans consist of a USD$1.75 billion seven-year first lien term loan priced at LIBOR plus 4.00% (the “USD First Lien Term Loan”) and a €200 million seven-year first lien term loan priced at Euribor plus 4.25% (the “EUR First Lien Term Loan”), in each case with a 1.00% LIBOR and Euribor floor. The second lien term loan consists of a USD$800 million eight-year loan priced at LIBOR plus 7.00%, with a 1.00% LIBOR floor repayable on August 1, 2022 (the “USD Second Lien Term Loan”).

First Lien Term Loans

During the three-month period ended March 31, 2015, the Corporation incurred $29.9 million in interest on the USD First Lien Term Loan, of which $3.29 million relates to interest accretion and repaid $5.55 million in principal.

During the three-month period ended March 31, 2015, the Corporation incurred $3.05 million in interest of which $383,000 relates to interest accretion and repaid $681,000 in principal in relation to the EUR First Lien Term Loan.

On March 16, 2015, Amaya entered into cross currency swap agreements (the “Swap Agreements”), which allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% (a simple average of the different interest rates for the various Swap Agreements) to replace the USD interest payments bearing a minimum floating interest rate of 5.0% (USD three-month LIBOR plus a 4.0% margin, with a LIBOR floor of 1.0%) related to the USD First Lien Term Loan. The interest and principal payments for the Swap Agreements, which mature in five years, will be made at a Euro to USD exchange rate of 1.1102 on USD notional amounts of $1.74125 billion.

Second Lien Term Loan

During the three-month period ended March 31, 2015, the Corporation incurred $21.5 million in interest on the Second Lien Term Loan of which $1.35 million relates to interest accretion.

(b) Senior Facility

On December 20, 2013, Cadillac Jack, Inc. (“Cadillac Jack”) entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack has access to term loans in an aggregate principal amount of up to USD$160 million (the “Credit Facilities”). The Credit Facilities replaced the existing USD $110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and the remaining amounts are being used to fund the ongoing working capital and other general corporate purposes. On May 15, 2014, Cadillac Jack obtained an incremental USD$80 million term loan to the Credit Facilities through an amendment thereto for the purpose of financing working capital expenses and general corporate purposes of the Corporation. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.5% with a 1% LIBOR floor (as amended, the “Senior Facility”). The Senior Facility matures over a five-year term from the closing date and is secured by the stock of Cadillac Jack and the assets of Cadillac Jack and its subsidiaries.

During the three-month period ended March 31, 2015, the Corporation reclassified the Senior Facility as liabilities held for sale. During the period, the Corporation incurred $7.13 million (March 31, 2014 - $3.64 million) in interest on the Senior Facility, of which $110,000 (March 31, 2014 - $110,000) relates to interest accretion and repaid $760,000 in principal.

(c) Mezzanine Facility

During the three-month period ended March 31, 2015, the Corporation reclassified the Mezzanine Facility as liabilities held for sale. During the period, the Corporation incurred $4.58 million in interest on the Mezzanine Facility, of which $360,000 relates to interest accretion and $2.27 million relates to paid in kind interest.

(d) 2013 Debentures

During the three-month period ended March 31, 2015, the Corporation incurred $980,000 (March 31, 2014 – $890,000) in interest on the 2013 Debentures, of which $420,000 (March 31, 2014 – $370,000) relates to interest accretion.

7. SHARE CAPITAL


	Common shares				Preferred shares
	Number of shares		$000’s		Number of shares			$000’s
Opening balance , as at January 1, 2014		94,078,297		220,683		–			–
Issuance, net of transaction costs and warrants		34,984,025		649,618		1,139,356			725,820
Exercise of options		649,159		3,204		–			–
Exercise of warrants		3,132,860		57,770		–			–
Deferred income taxes in relation to transaction costs		–		8,258		–			18,219

Ending balance, as at December 31, 2014		132,844,341		939,533		1,139,356			744,039

Exercise of options		63,570		463		–			–
Exercise of warrants		260,675		1,072		–			–
Conversion of preferred shares		4,592		107		(107	)		(107	)
Deferred income taxes in relation to transaction costs		–		–		–			–

Ending balance, as at March 31, 2015		133,173,178		941,175		1,139,249			743,932

During the three-month period ended March 31, 2015:

•

the Corporation issued 260,675 common shares for cash consideration of $950,000 as a result of the exercise of warrants. The exercised warrants were initially valued at $122,000 using the Black-Scholes valuation model. Upon the exercise of such warrants, the value originally allocated to reserves was reallocated to the common shares so issued.

•

the Corporation issued 63,570 common shares for cash consideration of $358,000 as a result of the exercise of stock options. The exercised stock options were initially valued at $105,000 using the Black-Scholes valuation model. Upon the exercise of such stock options, the value originally allocated to reserves was reallocated to the common shares so issued.

•

the Corporation issued 4,592 common shares as a result of the conversion of preferred shares. The converted preferred shares were initially valued at $107,000 using the Black-Scholes valuation model. Upon the conversion of the preferred shares, the value originally allocated to the preferred shares was reallocated to the common shares so issued.

2015 NCIB

On February 13, 2015, the TSX approved the Corporation’s notice of intention to make a normal course issuer bid (“2015 NCIB”) to purchase for cancellation up to 6,644,737 common shares, representing approximately 5% of Amaya’s issued and outstanding common shares as of January 26, 2015. The Corporation may purchase the common shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or by such other means as may be permitted by the TSX rules and policies. As of March 31, 2015, the Corporation has not purchased any common shares pursuant to the 2015 NCIB.

8. RESERVES

The following table highlights the class of reserves included in the Corporation’s equity:

Warrants
$000’s

Stock
options
$000’s

Cumulative
translation
adjustments
$000’s

Available-
for-sale
investments
$000’s

Derivatives
(Cross currency
interest rate
swap)
$000’s

Derivatives
(Net
investment
hedge)
$000’s

Other
$000’s

Total
$000’s
(Adjusted –
note 20)

Balance – January 1, 2014

2,831

3,209

8,838

–

(1,826

)

13,052

Cumulative translation adjustments

–

2,361

–

2,361

Stock-based compensation

–

753

–

753

Exercise of warrants

(10

)

–

(10

)

Exercise of stock options

–

(87

)

–

(87

)

Unrealized gains

–

684

–

684

Other

–

181

Balance – March 31, 2014

2,821

3,875

11,199

684

–

(1,645

)

16,934

Balance – January 1, 2015

332,491

8,738

127,688

15,732

–

(111

)

484,538

Cumulative translation adjustments

–

361,695

–

361,695

Stock-based compensation

–

3,426

–

3,426

Exercise of warrants

(122

)

–

(122

)

Exercise of stock options

–

(105

)

–

(105

)

Realized (gains) losses

–

(2,544

)

(65,271

)

–

(67,815

)

Unrealized gains (losses)

–

18,745

41,450

(81,480

)

–

(21,285

)

Other

1,467

–

365

1,832

Balance – March 31, 2015

333,836

12,059

489,383

31,933

(23,821

)

(81,480

)

254

762,164

Stock Options

Under the Corporation’s stock option plan (the “Option Plan”), 3,634,625 additional common shares are reserved for issuance as of March 31, 2015. This reserve cannot exceed 10% of the issued and outstanding common shares of the Corporation at any time. At March 31, 2015, this reserve represents 2.7% of the issued and outstanding common shares of the Corporation. Except in certain circumstances, the exercise price of the options issued under the Option Plan shall not be less than the market price of the common shares of the Corporation, which under the Option Plan is equal to the closing price of the common shares on the TSX on the business day immediately preceding the date of the grant. The options have a maximum term of five years. Subject to certain exceptions and as determined by the Corporation’s Board of Directors, options issued under the Option Plan since 2012 generally vest in equal increments over four years, while options issued in prior years generally vested in equal increments over two years.

The following table provides information about outstanding stock options issued under the Option Plan:


	For the three-month period ended March 31, 2015					For the three-month period ended March 31, 2014
	Number of options			Weighted average exercise price $		Number of options			Weighted average exercise price $
Beginning balance		9,801,289			16.21		5,124,379			3.75
Transactions during the period:
Issued		77,500			32.73		742,500			8.04
Exercised		(63,570	)		5.63		(120,923	)		2.85
Forfeited		(132,526	)		12.42		(117,814	)		5.12

Ending balance		9,682,693			16.46		5,628,142			4.31

During the three-month period ended March 31, 2015, the Corporation granted 77,500 stock options under the Option Plan to eligible participants to purchase common shares.

The outstanding stock options issued under the Option Plan are exercisable at prices ranging from $1.00 to $35.05 per share and have a weighted average contractual term of 3.38 years.

Summary of exercisable options per stock option grant:


	Outstanding options		Exercisable options
Exercise prices $	Number of options	Weighted average outstanding maturity period (years)	Number of options	Exercise price $
1.00	1,034,600	0.30	1,034,600	1.00
1.30	50,000	0.45	50,000	1.30
2.16	12,250	1.49	12,250	2.16
2.50	72,500	0.80	72,500	2.50
2.60	15,000	0.75	15,000	2.60
2.71	65,000	1.26	65,000	2.71
2.85	160,000	1.26	160,000	2.85
3.38	40,000	1.16	40,000	3.38
4.20	994,450	2.28	463,450	4.20
4.24	933,818	2.67	268,868	4.24
4.35	45,000	2.68	–	4.35
4.90	14,875	2.78	6,125	4.90
6.00	9,375	3.16	–	6.00
6.05	111,125	3.29	25,250	6.05
6.33	29,000	3.45	6,500	6.33
7.55	185,500	3.72	29,500	7.55
7.95	600,000	3.76	375,000	7.95
8.43	142,500	3.91	35,625	8.43
28.65	2,668,200	4.38	–	28.65
31.30	315,000	4.44	75,000	31.30
35.05	65,000	4.45	–	35.05
27.50	1,000,500	4.53	–	27.50
27.91	6,500	4.55	–	27.91
20.00	950,000	4.56	–	20.00
32.83	50,000	4.57	–	32.83
32.91	35,000	4.61	–	32.91
32.73	77,500	4.83	–	32.73

	9,682,693	3.38	2,734,668	4.12

The weighted-average share price of options exercised during the three-month period ended March 31, 2015 was $5.63 (March 31, 2014 – $2.85 million).

The Corporation recorded a compensation expense of $3.43 million for the three-month period ended March 31, 2015 (March 31, 2014 – $753,000). As at March 31, 2015, the Corporation had $19.02 million of compensation expense related to the issuance of stock options to be recorded in future periods.

The stock options issued during the three-month periods ended March 31, 2015 and 2014 were accounted for at their grant date fair value of $438,000, as determined by the Black-Scholes valuation model using the following weighted-average assumptions:


	2015		2014
Expected volatility		52%		60%
Expected life		3.75 years		3.75 years
Expected forfeiture rate		0%-17%		17%
Risk-free interest rate		1.07%		1.07%
Dividend yield		Nil		Nil
Weighted average share price Weighted average fair value of options at grant date	$ $	32.73 5.65	$ $	8.04 3.03

The expected life of the options is estimated using the average of the vesting period and the contractual life of the options. The expected volatility is estimated based on the Corporation’s public trading history on the TSX during such periods. Expected forfeiture rate is estimated based on a combination of historical forfeiture rates and expected turnover rates.

Warrants

The following table provides information about outstanding warrants at March 31, 2015 and March 31, 2014:

For the three-month
period ended
March 31, 2015

For the three-month
period ended
March 31, 2014

Number of
warrants

Weighted
average
exercise
price
$

Number of
warrants

Weighted
average
exercise
price
$

Beginning balance

16,211,410

5.09

2,594,270

4.62

Issued

–

Exercised

(260,675

)

4.11

(4,800

)

6.25

Expired

–

Ending balance

15,950,735

5.11

2,589,470

4.62

The following table provides information about outstanding warrants per particular warrant grant:


Grant date	Expiry date	Number of warrants	Exercise price
March 27, 2012	April 30, 2015	355,950	3.00
February 7, 2013	January 31, 2016	594,249	6.25
May 15, 2014	May 15, 2024	4,000,000	19.17
August 1, 2014	August 1, 2024	11,000,536	0.01

		15,950,735	5.11

During the three-month period ended March 31, 2015, the Corporation issued 260,675 common shares for cash consideration of $950,000 as a result of the exercise of warrants. The exercised warrants were initially valued at $122,000 using the Black-Scholes valuation model. Upon the exercise of such warrants, the value originally allocated to reserves was reallocated to the common shares so issued.

During the three-month period ended March 31, 2014, the Corporation issued 4,800 common shares for cash consideration of $30,000 as a result of the exercise of 4,800 warrants. The exercised warrants were initially valued at $10,000 using the Black-Scholes valuation model. Upon the exercise of such warrants, the value originally allocated to reserves was reallocated to the common shares so issued.


	2015		2014
Expected volatility		–		60%
Expected life		–		10 years
Expected forfeiture rate		–		0%
Risk-free interest rate		–		1.17%
Dividend yield		–		Nil
Weighted average fair value of options at grant date		–	$	28.64

The expected life of the warrants is estimated using the average of the vesting period and the contractual life of the warrants. The expected volatility is estimated based on the Corporation’s public trading history on the TSX during such periods. Expected forfeiture rate is estimated based on a combination of historical forfeiture rates and expected turnover rates.

9. FAIR VALUE

The carrying amount of receivable under finance leases approximates their fair value because the interest rates approximate current market rates. On initial recognition the fair value of amounts receivable under finance leases was established using a discounted cash-flow model.


	As at March 31, 2015
	Fair value & carrying value $000’s		Level 1		Level 2		Level 3
Funds - Available for sale		229,257		229,257		–		–
Bonds - Available for sale		137,474		137,474		–		–
Convertible debentures - Fair value through profit/loss		23,868		10,164		13,704		–
Equity in quoted companies - Available for sale		150,069		150,069		–		–
Equity in private companies - Available for sale		10,084		–		–		10,084
Derivatives		42,611		–		42,611		–

Total financial assets		593,363		526,964		56,315		10,084


	As at December 31, 2014
	Fair value & carrying value $000’s		Level 1		Level 2		Level 3
Funds - Available for sale		173,799		173,799		–		–
Bonds - Available for sale		122,528		122,528		–		–
Convertible debentures - Fair value through profit/loss		19,358		8,278		11,080		–
Equity in quoted companies - Available for sale		84,350		84,350		–		–
Equity in private companies - Available for sale		10,391		–		–		10,391

Total financial assets		410,426		388,955		11,080		10,391

The fair values of other financial assets and liabilities measured at carrying value on the statements of financial position as at
each of March 31, 2015 and December 31, 2014 are as follows:

As at March 31, 2015

Fair value
$000’s

Level 1

Level 2

Level 3

Promissory note

4,001

–

4,001

–

Total financial assets

4,001

–

4,001

–

First Lien Term Loans

2,458,116

–

Second Lien Term Loan

1,012,013

–

Liabilities held for sale – Long term debt

411,529

2013 Debentures

30,000

–

Total financial liabilities

3,911,658

3,500,129

411,529

–

As at December 31, 2014

Fair value
$000’s

Level 1

Level 2

Level 3

Promissory note

3,783

–

3,783

–

Total financial assets

3,783

–

3,783

–

First Lien Term Loans

2,291,497

–

Second Lien Term Loan

917,639

–

Senior Facility

284,041

–

284,041

–

Mezzanine Facility

127,488

–

127,488

–

2013 Debentures

30,006

–

Total financial liabilities

3,650,671

3,239,142

411,529

–

For the Corporation’s financial instruments which are recognized in the interim condensed consolidated statements of financial position at fair value, the fair value measurements are categorized based on the lowest level input that is significant to the fair value measurement in its entirety and the degree to which the inputs are observable. The significance levels are classified as follows in the fair value hierarchy:

•

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

•

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

•

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognized by the Corporation at the end of the reporting period during which the transfer occurred. There were no transfers in or out of Level 3 during the three-month period ended March 31, 2015.

10. RELATED PARTY TRANSACTIONS

Key management of the Corporation includes the members of the board of directors, the Chairman and Chief Executive Officer, Chief Financial Officer, Executive Vice-President, Corporate Development and General Counsel, and certain other key officers of the Corporation’s B2C and B2B businesses, which are operated by certain of the Corporation’s subsidiaries. The compensation of such key management for the periods ended March 31, 2015 and 2014 includes the following:


	March 31, 2015 $000’s		March 31, 2014 $000’s
Salaries, bonuses and short term employee benefits		1,980		389
Director retainers		89		48
Share based payments		1,197		397

		3,266		834

The remuneration of the Chairman and Chief Executive Officer, Chief Financial Officer, Executive Vice-President, Corporate Development and General Counsel consists primarily of a salary and share based payments.

11. SEGMENTED INFORMATION

Segmented earnings (loss) from continuing operations before income taxes for the periods ended March 31, 2015 and 2014 were as follows:


	March 31, 2015									March 31, 2014
	B2B $000’s			B2C $000’s			Total $000’s			B2B^* $000’s			B2C^* $000’s		Total^* $000’s
Revenue		3,101			337,032			340,133			12,842			–		12,842
Gain on sale of subsidiary		–			–			–			49,373			–		49,373
Income (loss) from investments		–			4,352			4,352			(99	)		–		(99	)
Selling expense		(1,073	)		(57,970	)		(59,043	)		(2,980	)		–		(2,980	)
General and administrative expense		(7,710	)		(186,046	)		(193,756	)		(12,765	)		–		(12,765	)
Financial expense		(143	)		(65,620	)		(65,763	)		740			–		740
Acquisition related expense								(2,797	)							(2,585	)

Earnings (loss) from continuing operations before income taxes		(5,825	)		31,748			23,126			47,111			–		44,526

Current income tax								2,893								1,041
Deferred income tax								(2,465	)							(888	)

Net earnings (loss) from continuing operations		(5,825	)		31,748			22,698			47,111			–		44,373

*	Adjusted – note 20

Other segmented information for the periods ended March 31, 2015 and 2014 included:


	March 31, 2015						March 31, 2014
	B2B $000’s		B2C $000’s		Total $000’s		B2B $000’s		B2C $000’s		Total $000’s
Depreciation & amortization		355		2,294		2,649		1,336		–		1,336

Amortization of purchase price allocated intangibles		977		36,456		37,433		892		–		892

Total Assets		304,320		7,534,882		7,839,202		7,167,028		–		7,167,028

Total Liabilities		497,467		4,928,418		5,425,885		5,045,835		–		5,045,835

12. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS

On November 24, 2014, Amaya divested its subsidiary Ongame Network Ltd. (“Ongame”), which provided B2B poker and platform solutions, to NYX Gaming Group Limited (TSXV: NYX) (“NYX Gaming Group”). In connection with this divestiture, Amaya and NYX Gaming Group entered into a strategic investment transaction pursuant to which NYX Gaming Group issued, and Amaya purchased, a $10.0 million unsecured convertible debenture on November 17, 2014 which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. At the holder’s option, both interest and principal are payable in ordinary shares of NYX Gaming Group at any time prior to the maturity date of November 17, 2016. Amaya subsequently assigned an aggregate of $1 million of the unsecured convertible debenture to four individuals and the remaining $9 million to Rational Group.

On March, 26, 2015, Innova Gaming Group Inc. (“Innova”), which was a wholly owned subsidiary of Amaya, announced that it had filed and obtained a receipt for a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada in connection with a proposed initial public offering and secondary offering of its common shares (the “Offering”). Innova was formed in connection with the Offering and holds all of the shares of Diamond Game Enterprises (“Diamond Game”), a former wholly owned subsidiary of Amaya. The Offering was subsequently closed on May 5, 2015 with Amaya receiving aggregate gross proceeds of approximately $34.1 million and maintaining ownership of approximately 40% of the issued and outstanding common shares of Innova. If the underwriters’ over-allotment option is exercised in full, Amaya’s retained interest will be reduced to approximately 31% of the issued and outstanding common shares of Innova. See note 19.

Further, on March 30, 2015, the Corporation entered into a definitive agreement to sell 100% of the issued and outstanding shares of Amaya Americas Corporation, the indirect parent company of Cadillac Jack, Inc. (“Cadillac Jack”), to AGS, LLC, an affiliate of funds managed by Apollo Global Management, LLC (NYSE: APO) for approximately $476 million comprising cash consideration of $461 million, subject to adjustment, and a $15 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, Amaya anticipates closing the sale of Cadillac Jack in 2015.

Each of the B2B businesses, Diamond Game (now a wholly owned subsidiary of Innova) and Cadillac Jack, are classified as discontinued operations and their assets and liabilities are classified as held for sale for the period ended March 31, 2015 (Ongame and its assets and liabilities were also so classified for the period ended December 31, 2014). The following tables illustrate the impact of these discontinued operations and assets and liabilities held for sale on the financials of the Corporation on March 31, 2015 as compared to the period ended March 31, 2014:

Results from Discontinued Operations


	For the periods ended
	March 31, 2015 $000’s			March 31, 2014 $000’s
Revenues		30,054			28,360
Expenses		(32,504	)		(32,003	)

Results from discontinued operations before income taxes		(2,450	)		(3,643	)
Income taxes		7,285			1,770

Net loss from discontinued operations		(9,735	)		(5,413	)

Basic earnings (loss) from discontinued operations per common share	$	(0.07	)	$	(0.06	)

Diluted earnings (loss) from discontinued operations per common share	$	(0.07	)	$	(0.06	)

Cash Flows from (Used In) Discontinued Operations


	For the periods ended
	March 31, 2015 $000’s			March 31, 2014 $000’s
Net cash from in operating activities		6,378			924
Net cash used in investing activities		(12,498	)		(23,392	)
Net cash used in financing activities		(1,840	)		(562	)

Net cash flows		(7,960	)		(23,030	)

Effect on the Financial Position of the Corporation

The assets and liabilities classified as held for sale as at March 31, 2015 in connection with the divestiture of Diamond Game and the expected divestiture of Cadillac Jack are as follows:


	$000’s
Cash		11,973
Accounts receivable		19,165
Income tax receivable		3
Prepaid expenses and deposits		3,890
Inventories		10,184
Goodwill and intangible assets		162,674
Property and equipment		43,428
Deferred development costs		5,172
Deferred income taxes		4,403
Receivable under finance lease		1,471

Assets classified as held for sale		262,363


	$000’s
Accounts payable and accrued liabilities		11,695
Provisions		2,760
Income tax payable		421
Other payables		4,701
Deferred revenue		2,336
Deferred income taxes		19,893
Long-term debt		413,485

Liabilities classified as held for sale		455,291

13. BUSINESS COMBINATIONS

Oldford Group Limited - Update

Although management continues to assess the potential exposure, if any, the Corporation believes that any tax liability as part of this matter may be indemnifiable by the former owners of the Oldford Group under the agreement governing the transactions, subject to certain conditions. Pursuant to this agreement, the sellers have certain indemnification obligations to the Corporation, subject to certain conditions, with respect to certain pre-closing liabilities, including amounts held in an escrow account plus an additional amount not held in escrow and reserved solely for tax claims.

The purchase price allocation for the Rational Group Acquisition does not reflect the impact on any contingencies arising from circumstances that were present on the date of the Rational Group Acquisition on August 1, 2014. In the event that a measurable outcome is ascertainable as a result of these contingencies during the one-year reference period from the date of the Rational Group Acquisition, the impact will be recorded as an adjustment to purchase price allocation reflecting both the contingent liability and the offsetting indemnification asset. Any impact that becomes both measurable and probable after the reference period will not be reflected as an adjustment to the purchase price allocation.

14. EXPENSES CLASSIFIED BY NATURE


	For the three-month periods ended
	March 31, 2015 $000’s		March 31, 2014 $000’s
Financial
Interest and bank charges		64,853		1,118
Foreign exchange		910		(1,858	)

		65,763		(740	)

General and administrative
Gaming duties		32,409		–
Processor costs		19,418		–
Office		17,926		3,049
Salaries and fringe benefits		59,039		4,108
Stock-based compensation		3,426		754
Depreciation of property and equipment		2,061		470
Amortization of deferred development costs		272		133
Amortization of intangible assets		37,749		1,625
Professional fees		15,217		2,517
Bad debt		3,843		109
Loss on disposal of assets		2,396		–

		193,756		12,765

Selling		59,043		2,980


Acquisition-related costs
Professional fees		2,797		2,585

		2,797		2,585

15. NET EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings from continuing operations and earnings per common share for the following periods:


	For the three-month periods ended
	March 31, 2015		March 31, 2014
Numerator
Numerator for basic and diluted earnings per common share – net earnings from continuing operations	$	22,698,000	$	44,373,000

Numerator for basic and diluted earnings per common share – net earnings	$	12,963,000	$	38,960,000

Denominator
Denominator for basic earnings per common share – weighted average number of common shares		133,027,088		94,136,709

Effect of dilutive securities
Stock options		4,808,681		2,022,951
Warrants		13,538,358		1,109,915
Convertible preferred shares		48,390,369		–

Effect of dilutive securities		66,737,408		3,132,866

Dilutive potential for diluted earnings per common share		199,764,496		97,269,575

Basic earnings from continuing operations per common share	$	0.17	$	0.47
Diluted earnings from continuing operations per common share	$	0.11	$	0.46

Basic earnings per common share	$	0.10	$	0.41
Diluted earnings per common share	$	0.06	$	0.40

16. SALE OF WAGERLOGIC MALTA HOLDINGS LTD.

On February 11, 2014, and pursuant to a Share Purchase Agreement dated November 27, 2013, one of the Corporation’s subsidiaries completed the sale of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“WagerLogic”) to Goldstar Acquisitionco Inc. (“Goldstar”) for $70 million, less a closing working capital adjustment satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date. The share purchase agreement for this divestiture also provides for a bonus payment of US$10 million to be paid by Goldstar to Amaya if CryptoLogic Operations Limited (“Cryptologic Operations”) achieves an annual net revenue target of at least US$30 million during the second year following the closing date (payable in 12 monthly installments during the third year following the closing date), and an additional bonus payment of US$10 million if CryptoLogic Operations achieves an annual net revenue target of at least US$40 million during the third year following the closing date (payable in 12 monthly installments during the fourth year following the closing date).

Amaya continues to license online casino games to Wagerlogic. Amaya and certain of its subsidiaries have entered into a revenue guarantee agreement under which they jointly and severally guarantee the financial obligations of such subsidiaries under the service agreements, including an obligation to pay CryptoLogic Operations, during the two years following the closing date of the divestiture, an amount equal to the shortfall between CryptoLogic Operation’s quarterly net revenue and a pre-established quarterly net revenue target of US$4.75 million.

17. CHANGE IN FUNCTIONAL CURRENCY

On February 26, 2015, after a subsidiary of the Corporation entered into the Swap Agreements, the subsidiary’s functional currency changed from the U.S. dollar to the Euro. As a result of the Swap Agreements, the subsidiary will be exposed to potentially significant fluctuations in the Euro as compared to other currencies. As a result of this and the fact that a portion of the subsidiary’s operations are denominated in Euros, the primary economic environment of this subsidiary is the Euro.

This change in functional currency is accounted for prospectively from the date of the change by translating all items into the new functional currency using the exchange rate at the date of the change.

18. HEDGING

During the three-month period ended March 31, 2015, the Corporation entered into the Swap Agreements, which were designated as cash flow hedges, to exchange a notional principal of USD$1.74 billion debt into Euros to fix both future interest and principal payments in Euro. The Corporation expects the Swap Agreements to mitigate the impact of foreign currency gains or losses resulting from changes in the Euro to U.S. dollar exchange rate. The effective portion of the gains or losses from these derivatives accumulated in other comprehensive income is recorded in financial charges in the same period the interest expense on the USD First Lien Term Loan is recorded.

The fair value of the outstanding Swap Agreement as at March 31, 2015 is $42.6 million (€32.1 million). The ineffective portion of the hedge recognized in financial expenses for the three month period ending March 31, 2015 is $1.2 million (€868,000).

The Corporation has designated US$800 million of its USD Second Lien Term Loan and US$400 million of its contingent consideration (i.e., the deferred purchase price for its B2C business) as a foreign exchange hedge of its net investment in its foreign operations. Accordingly, the portion of the gains or losses arising from the translation of the U.S. dollar-denominated debt that is determined to be an effective hedge is recognized in other comprehensive income, counterbalancing a portion of the gains or losses arising from translation of the Corporation’s net investment in its foreign operations. Should a portion of the hedging relationship become ineffective, the ineffective portion would be recorded in the consolidated statements of earnings.

During the period ended March 31, 2015, an unrealized exchange loss on translation of $81.48 million has been recorded in the consolidated statement of comprehensive income related to the translation of the USD Second Lien Term Loan and such contingent consideration.

19. SUBSEQUENT EVENTS

On April 9, 2015, Amaya announced that it entered into a share purchase agreement to sell its subsidiaries Amaya (Alberta) Inc. (formerly Chartwell Technology Inc.) (“Chartwell”) and CryptoLogic Ltd. (“CryptoLogic”) to NYX Gaming Group (the “Chartwell/Cryptologic Sale”) for approximately $150 million, subject to adjustment, financing and other customary closing conditions. In connection with the Chartwell/Cryptologic Sale, a subsidiary of Amaya and NYX Gaming Group anticipate entering into a supplier licensing agreement (the “Licensing Agreement”) for a term of six years, under which NYX Gaming Group is expected to provide certain casino gaming content to Amaya’s real-money casino offering which Amaya intends to integrate into the PokerStars and Full Tilt branded casino websites. Pursuant to the Licensing Agreement, a subsidiary of Amaya will pay NYX Gaming Group a minimum license commitment in the amount of $12 million per year for each of the first three years of the Licensing Agreement.

As announced by Amaya and Innova, the Offering, which included a treasury offering of common shares by Innova and a secondary offering of common shares of Innova by Amaya, closed on May 5, 2015 with Amaya receiving aggregate net proceeds of approximately $34.1 million and maintaining ownership of approximately 40% of the issued and outstanding common shares of Innova. If the underwriters’ over-allotment option is exercised in full, Amaya’s retained interest will be reduced to approximately 31% of the issued and outstanding common shares of Innova. Amaya formed Innova in connection with the Offering and Innova currently holds all of the shares of Diamond Game.

20. PRIOR PERIOD ADJUSTMENT

The Corporation corrected an error related to the comparative three-month period ended March 31, 2014 as a result of an unrealized gain on the investment in The Intertain Group Limited (TSX: IT) that was included in net earnings and should have been included in other comprehensive income. This investment was previously classified as a held-for-trading investment with fair value fluctuations recorded through net earnings whereas it should have been classified as an available-for-sale investment with fair value fluctuations recorded through other comprehensive income. This investment continues to be held by the Corporation as at March 31, 2015. This adjustment was made retrospectively and impacts the comparative period statement of changes in equity, statement of earnings, statement of comprehensive income and statement of cash flows included in these interim condensed consolidated financial statements. It was properly corrected and reflected in the annual audited financial statements of the Corporation as at and for the year ended December 31, 2014. It will also be corrected for the comparative periods of the June 30, 2015 and September 30, 2015 interim condensed consolidated financial statements.

The Corporation retrospectively corrected the error which decreased “income from investments” and “net earnings” by $680,000, and increased “other comprehensive income” by $680,000 for the three-month period ended March 31, 2014. This adjustment also decreased “basic earnings per common share” for the three-month period ended March 31, 2014 by $0.01. This adjustment did not impact the “diluted earnings per common share”.

The adjustment to the six-month period ended June 30, 2014 and nine-month period ended September 30, 2014 is a decrease to “net earnings” and increase to “other comprehensive income” of $3.93 million, and $9.54 million, respectively.

21. COMPARATIVE INFORMATION

The Corporation reclassified certain items in the interim condensed consolidated statements of cash flows within the cash flows from operating activities section for the comparative period to conform to the current year’s presentation. This reclassification had no impact on the total cash flows from operating activities.

LOGO

EX-99.12

Exhibit 99.12

LOGO

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE PERIOD ENDED

MARCH 31, 2015

May 14, 2015

TABLE OF CONTENTS


MANAGEMENT’S DISCUSSION AND ANALYSIS			1

CAUTION REGARDING FORWARD-LOOKING STATEMENTS			1

OVERVIEW			2

OUTLOOK			5

BASIS OF PRESENTATION			6

SELECTED FINANCIAL INFORMATION			7

FINANCIAL CONDITION			7

SUMMARY OF QUARTERLY RESULTS			9

DISCUSSION OF OPERATIONS			10

LIQUIDITY AND CAPITAL RESOURCES			11

CASH FLOWS BY ACTIVITY			16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES			17

RECENT ACCOUNTING PRONOUNCEMENTS			17

OFF BALANCE SHEET ARRANGEMENTS			18

OUTSTANDING SHARE DATA			18

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING			18

RISK FACTORS AND UNCERTAINTIES			19

FURTHER INFORMATION			22

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following Management’s Discussion and Analysis (this “MD&A”) provides a review of the results of operations, financial condition and cash flows for Amaya Inc. (“Amaya”, the “Corporation”, “we”, “us” or “our”), on a condensed consolidated basis, for the three-month period ended March 31, 2015. This document should be read in conjunction with the information contained in the Corporation’s unaudited condensed consolidated financial statements and related notes for the three-month period ended March 31, 2015 and with the audited consolidated financial statements and related notes for the year ended December 31, 2014 (the “2014 Annual Financial Statements”) and the Management’s Discussion and Analysis thereon (the “2014 Annual MD&A”). The financial statements and additional information regarding the business of the Corporation are available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and on the Corporation’s website at www.amaya.com.

For reporting purposes, the Corporation prepares its financial statements in Canadian dollars and, unless otherwise indicated, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB” and, International Financial Reporting Standards as issued by IASB, “IFRS”). See also “Basis of Presentation” below. Unless otherwise indicated, all dollar (“$”) amounts in this MD&A are expressed in Canadian dollars. References to ‘‘EUR’’ or “€” are to European Euros and references to ‘‘USD’’ or “USD $” are to U.S. dollars. Unless otherwise indicated, all references to a specific “note” refers to the notes to the unaudited interim condensed consolidated financial statements of the Corporation for the three-month period ended March 31, 2015.

As used in this MD&A, EBITDA is defined by the Corporation as earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, and stock-based compensation. EBITDA is a non-IFRS measure.

Unless otherwise stated, in preparing this MD&A, we have taken into account information available to us up to May 14, 2015, the date of this MD&A.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A and the Corporation’s consolidated financial statements and related notes contain certain information that may constitute forward-looking information within the meaning of applicable securities laws, which Amaya refers to in this MD&A as forward-looking statements. These statements reflect Amaya’s current expectations related to future events or its future results, performance, achievements, business prospects or opportunities and products and services development, and future trends affecting the Corporation. All such statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “would”, “should”, “believe”, “objective”, “ongoing” or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A and the Corporation’s consolidated financial statements and related notes. Such statements are based on a number of assumptions which may prove to be incorrect.

qualified personnel; defects in the Corporation’s solutions, products or services; losses due to fraudulent activities; impact of currency fluctuations; management of growth; contract awards; service interruptions of Internet service providers; ability of Internet infrastructure to meet applicable demand; systems, networks or telecommunications failures or cyber-attacks; regulations that may be adopted with respect to the Internet and electronic commerce; refinancing risks; customer and operator preferences and changes in the economy; changes in ownership of customers or consolidation within the gaming industry; litigation costs and outcomes; expansion into new gaming markets; relationships with distributors; access to financing on reasonable terms; and natural events. These factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully.

There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those expressly or impliedly expected or estimated in such statements. Shareholders and investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Although the Corporation cautions that the foregoing list of risk factors, as well as those risk factors presented under the heading “Risk Factors and Uncertainties” in the 2014 Annual Information Form and elsewhere in this MD&A and the 2014 Annual Information Form, are not exhaustive, shareholders and investors should carefully consider them and the uncertainties they represent and the risks they entail. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement. Unless otherwise indicated by the Corporation, forward-looking statements in this MD&A describe Amaya’s expectations as of May 14, 2015 and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements, except in accordance with applicable securities laws.

OVERVIEW

Amaya is a leading provider of technology-based solutions, products and services in the global gaming and interactive entertainment industries. Through its two reportable segments, Business-to-Consumer (“B2C”) and Business-to-Business (“B2B”), Amaya is focused on developing, operating and acquiring interactive technology-based assets with high-growth potential in existing and new markets and industries or verticals. Amaya’s B2C business currently consists of the operations of Amaya Group Holdings (IOM) Limited (formerly known as Oldford Group Limited) and its subsidiaries (collectively, “Rational Group”), which, among other things, currently offer online and mobile real- and play-money poker and other gaming products, including casino and sports betting (also known as sportsbook), as well as certain live poker tours and events, branded poker rooms in popular casinos in major cities around the world and poker programming for television and online audiences. Amaya’s B2B business currently consists of the operations of certain of its subsidiaries, which offer interactive and land-based gaming solutions. Amaya strives to not only improve and expand upon its current offerings, including its portfolio of what it believes to be high-growth interactive technology-based assets, but to pursue and capitalize on new global growth opportunities. Amaya seeks to take advantage of technology to provide gaming and interactive entertainment to large networks of customers.

B2C

Since the acquisition of the Rational Group on August 1, 2014 (the “Rational Group Acquisition”), Amaya’s primary business has been its B2C segment, which currently generates the vast majority of Amaya’s revenues and profits. Based in the Isle of Man and operating globally, Rational Group owns and operates gaming and related interactive entertainment businesses, which it offers under several owned brands, including, among others, PokerStars, Full Tilt, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in popular casinos around the world and poker programming created for television and online audiences. In addition to expanding its existing real- and play-money poker businesses into new markets, Amaya has recently targeted growth into other online gaming verticals, notably casino and sportsbook, and intends to pursue opportunities in daily fantasy sports.

Rational Group’s primary brands are PokerStars and Full Tilt, each of which provides a distinct online gaming platform. Currently, according to online poker tracking site Pokerscout.com, the PokerStars and Full Tilt sites collectively hold a majority of the global market share of real-money poker player liquidity, or the volume of people playing as measured by average daily seated ring game real money poker players, and are among the leaders in play-money poker player liquidity. Since its 2001 launch, PokerStars has become the world’s largest real money

online poker site based on, among other things, player liquidity, according to Pokerscout.com, and the Corporation believes that it has distinguished itself as one of the world’s premier poker brands.

B2B

Amaya’s B2B business includes the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide, primarily to land-based and online gaming operators and governmental agencies and bodies, and ultimately indirectly to end-users and consumers. Amaya’s B2B solutions are designed to provide end-users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, all of which is intended to improve the profitability, productivity, security and brands of the operators. Since inception, Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions, including Amaya (Alberta) Inc. (formerly Chartwell Technology Inc.) (“Chartwell”), acquired in July 2011, and CryptoLogic Ltd. (“CryptoLogic”), acquired in April 2012, Cadillac Jack Inc. (“Cadillac Jack”), acquired in November 2012, and Diamond Game Enterprises (“Diamond Game”), acquired in February 2014, all of which provide technology, content and services to a diversified base of customers in the regulated gaming industry. As of the date of this MD&A, and as previously announced with respect to certain subsidiaries, Amaya and its management (“Management”) have initiated a strategic review process to explore the divestiture of these B2B assets and have begun to execute on the same. The fundamental objective of this review and the potential divestitures is to expedite the Corporation’s overall business strategy and maximize shareholder value. See “Overview—Recent Highlights—B2B Asset Divestitures” below.

Recent Highlights

Set forth below is a general summary of certain recent corporate highlights, developments and announcements. For additional corporate developments and announcements during the reporting period, see the disclosure under the heading “General Development of the Business” in the 2014 Annual Information Form.

B2B Asset Divestitures

As previously announced, Amaya is exploring strategic opportunities to divest its B2B business and to use the proceeds to repay outstanding indebtedness, repurchase the Corporation’s common shares (“Common Shares”) pursuant to the 2015 NCIB (as defined below) or otherwise, or a combination of both. In furtherance of its B2B assets review and overall business strategy, the Corporation announced the following strategic transactions:

•

the completed spin-off of Diamond Game through the initial public offering (the “Innova Offering”) of common shares of Innova Gaming Group Inc. (“Innova”) on May 5, 2015;

•

the execution of a definitive agreement for the sale of Cadillac Jack (the “CJ Sale”) to AGS, LLC, an affiliate of funds managed by Apollo Global Management, LLC (NYSE:APO) (“AGS”), on March 30, 2015;

•

the execution of a definitive share purchase agreement to sell Chartwell and Cryptologic to NYX Gaming Group (the “Chartwell/Cryptologic Sale”) on April 9, 2015; and

•

the completed sale of Ongame Network Ltd (“Ongame”) to NYX Gaming Group Limited (TSXV: NYX) (“NYX Gaming Group”) in the fourth quarter of 2014 (the “Ongame Sale”).

Innova Offering. On March 26, 2015, Amaya announced that its wholly owned subsidiary, Innova, had filed and obtained a receipt for a preliminary prospectus in respect of the Innova Offering, which included a treasury offering of common shares by Innova and a secondary offering of common shares of Innova by Amaya. The Innova Offering closed on May 5, 2015 with Amaya receiving aggregate net proceeds of approximately $34.1 million and maintaining ownership of approximately 40% of the issued and outstanding common shares of Innova. If the underwriters’ over-allotment option is exercised in full, Amaya’s retained interest will be reduced to approximately 31% of the issued and outstanding common shares of Innova. Amaya formed Innova in connection with the Innova Offering and Innova currently holds all of the shares of Diamond Game. Diamond Game is classified as discontinued operations and its assets and liabilities are classified as held for sale in the condensed consolidated financial statements for the three-month period ended March 31, 2015.

CJ Sale. On March 30, 2015, Amaya announced that it entered into a definitive agreement to sell Cadillac

Jack to AGS for approximately USD $382 million comprising cash consideration of USD $370 million, subject to adjustment, and a USD $12 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, Amaya anticipates closing the CJ Sale in 2015. Amaya anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Senior Facility and Mezzanine Facility (each as defined below). Cadillac Jack is classified as discontinued operations and its assets and liabilities are classified as held for sale in the condensed consolidated financial statements for the three-month period ended March 31, 2015.

Chartwell/Cryptologic Sale. On April 9, 2015, Amaya announced that it entered into a share purchase agreement to sell Chartwell and Cryptologic to NYX Gaming Group for approximately $150 million, subject to adjustment. Subject to financing and other customary closing conditions, Amaya anticipates closing the Chartwell/Cryptologic Sale before the end of the third quarter of 2015. The Corporation also currently anticipates using the net proceeds from the Chartwell/Cryptologic Sale for deleveraging as well as repurchasing Common Shares pursuant to the 2015 NCIB. In connection with the Chartwell/Cryptologic Sale, a subsidiary of Amaya and NYX Gaming Group anticipate entering into a supplier licensing agreement (the “Licensing Agreement”) for a term of six years, under which NYX Gaming Group is expected to provide certain casino gaming content to Amaya’s real-money casino offering which Amaya intends to integrate into the PokerStars and Full Tilt branded casino websites. Pursuant to the Licensing Agreement, a subsidiary of Amaya will pay NYX Gaming Group a minimum license commitment in the amount of $12 million per year for each of the first three years of the Licensing Agreement.

Ongame Sale. Pursuant to a sale and transfer agreement (the “Ongame Sale and Transfer Agreement”), Amaya sold Ongame to NYX Gaming (Gibraltar) Limited, a wholly-owned subsidiary of NYX Gaming Group, for a purchase price equal to the sum of (i) US$1.00 (paid at the closing), plus (ii) an amount equal to eight times Ongame’s EBITDA for the year ending December 31, 2015, less any required working capital adjustments. The purchase price is only payable in 2016 upon determination of such amount based on Ongame’s 2015 year-end EBITDA, as calculated in accordance with the Ongame Sale and Transfer Agreement. In connection with this divestiture, Amaya and NYX Gaming Group entered into a strategic investment transaction pursuant to which NYX Gaming Group issued, and Amaya purchased, a $10.0 million unsecured convertible debenture on November 17, 2014 which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. At Amaya’s option, both interest and principal are payable in ordinary shares of NYX Gaming Group at any time prior to the maturity date of November 17, 2016. Amaya subsequently assigned an aggregate of $1.0 million of the unsecured convertible debenture to four individuals and the remaining $9.0 million to Rational Group. Ongame is classified as discontinued operations and its assets and liabilities are classified as held for sale in the 2014 Annual Financial Statements.

Pending the completion of the divestiture of all B2B assets, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth. There can be no assurance as to if and when the CJ Sale or Chartwell/Cryptologic Sale will occur or whether they will occur on the same or substantially similar terms as previously agreed upon.

UK Licenses

Cross Currency Swap Agreements

On March 16, 2015, Amaya announced that it entered into cross currency swap agreements (the “Swap Agreements”) that it anticipates will result in lower interest payments on existing debt and mitigate the impact of fluctuations in the Euro to USD exchange rate. The Swap Agreements allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% (a simple average of the different interest rates for the various Swap Agreements) to replace the USD interest payments bearing a minimum floating interest rate of 5.0% (USD three-month LIBOR plus a 4.0% margin, with a LIBOR floor of 1.0%) related to the USD$1.75 billion seven-year first lien term loan secured by Amaya on August 1, 2014 to finance a portion of the Rational Group Acquisition. The interest and principal payments for the Swap Agreements, which mature in five years, will be made at a Euro to USD exchange rate of 1.1102 on USD notional amounts of $1.74 billion. For

certain other hedging related activity, see below under “Liquidity and Capital Resources—Long-Term Debt—First and Second Lien Term Loans—USD Second Lien Term Loan”.

Italian Tax Matter

On March 11, 2015, Amaya commented on a tax dispute between a Rational Group subsidiary and Italian tax authorities related to the subsidiary’s Italian operations, primarily under the PokerStars brand, prior to the Rational Group Acquisition. Amaya was aware of the dispute prior to the Rational Group Acquisition and believes that Rational Group has consistently operated in compliance with applicable local tax regulations. During the disputed tax period, Rational Group paid €120 million in local taxes to the Italian tax authorities. The merger agreement related to the Rational Group Acquisition provides certain remedies to address tax and other liabilities that may arise post-closing but stem from Rational Group’s operations prior to the date of acquisition, including USD $315 million held in escrow for indemnifiable claims, including tax claims, and an additional USD $100 million that may be used to cover only tax claims.

2015 NCIB

On February 13, 2015, the Toronto Stock Exchange (the “TSX”) approved the Corporation’s notice of intention to make a normal course issuer bid (“2015 NCIB”) to purchase for cancellation up to 6,644,737 Common Shares, representing approximately 5% of Amaya’s issued and outstanding Common Shares as of January 26, 2015. The Corporation may purchase the Common Shares at prevailing market prices and by means of open market transactions through the facilities of the TSX or by such other means as may be permitted by the TSX rules and policies. The Corporation will determine in its sole discretion from time to time the actual number of Common Shares that it will purchase and the timing of any such purchases. In accordance with the applicable TSX rules, daily purchases under the 2015 NCIB may not exceed 161,724 Common Shares, representing 25% of the average daily trading volume of the Common Shares for the six-month period ended on January 31, 2015, and the Corporation may make, once per calendar week, a block purchase of Common Shares not owned, directly or indirectly, by insiders of Amaya that exceeds the daily repurchase restriction. Amaya intends to enter into, and seek TSX clearance of, an automatic share purchase plan (the “Automatic Purchase Plan”) with a broker to facilitate repurchases under the 2015 NCIB and, subject to the foregoing restrictions and the terms and conditions of the Automatic Purchase Plan, Amaya’s broker would be able to repurchase Common Shares under the Automatic Purchase Plan at any time, provided that the broker is not in possession of material, non-public information about Amaya, its subsidiaries or its business. The Automatic Purchase Plan would terminate upon the earlier of February 17, 2016 or the date on which the Corporation has purchased the maximum number of Common Shares permitted under the 2015 NCIB. Amaya is making the 2015 NCIB because it believes that, from time to time, the prevailing market price of its Common Shares may not reflect the underlying value of the Corporation, and that purchasing Common Shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders. As of May 14, 2015, the Corporation has not purchased any Common Shares pursuant to the 2015 NCIB.

OUTLOOK

Currently, according to online poker tracking site Pokerscout.com, the PokerStars and Full Tilt sites collectively hold a majority of the global market share of real-money, ring game poker player liquidity, which is based on the average daily seated ring game real money poker players, and are among the leaders in play-money poker player liquidity. Since its 2001 launch, PokerStars has become the world’s largest real money online poker site based on, among other things, the number of players and player liquidity, according to Pokerscout.com, and the Corporation believes that it has distinguished itself as one of the world’s premier poker brands. In addition, Amaya is continuously developing its proprietary platforms and has invested significantly in its technology infrastructure since inception to ensure a positive experience for its customers, not only from a gameplay perspective with respect to its B2C business, but most importantly, with respect to security and integrity across business segments and verticals. To support Amaya’s strong reputation for security and integrity, Amaya employs what it believes to be

industry-leading practices and systems with respect to various aspects of its technology infrastructure, including payment security, game integrity, customer fund protection, marketing and promotion, customer support, responsible gaming and VIP rewards and loyalty programs. Further, Amaya dedicates a major portion of its research and development investments to its B2C business, which seeks to provide broad market applications for products derived from its technology base.

As a regulated entity, we are required to maintain strong corporate governance standards and are required to, among other things, maintain effective internal controls over our financial reporting and disclosure controls and procedures, maintain systems for accurate record keeping, file periodic reports with gaming authorities and maintain strict compliance with various laws and regulations applicable to us. In addition, there are various other factors associated with gaming operations that could burden our business and operations, including, without limitation, compliance with multiple and sometimes conflicting regulatory requirements, jurisdictional limitations on contract enforcement, foreign currency risks, certain restrictions on gaming activities, potentially adverse tax risks and tax consequences, and changes in the political and economic stability, regulatory and taxation structures and the interpretation thereof in the jurisdictions in which the Corporation and its licensees operate. Any or all of such factors could have a material adverse effect on the Corporation’s business, operating results and financial condition. See also “Risk Factors and Uncertainties” below and in the 2014 Annual Information Form.

Amaya, through certain of its subsidiaries, is licensed or legally operates under third party licenses, as applicable, in various jurisdictions throughout the world, including the Isle of Man, Malta, Estonia, Spain, Greece, Denmark, Belgium, France, Italy, the United Kingdom and Bulgaria. Amaya seeks to ensure that it obtains all permits, authorizations, registrations and/or licenses necessary to manufacture, develop, distribute and offer its solutions, products and services, as applicable, in the jurisdictions in which it carries on business globally and where it is otherwise required to do so. In addition to expected organic growth in online and mobile poker in existing and new markets, however, Amaya believes that there are potentially significant opportunities for growth in new verticals. Specifically, Amaya believes that these new verticals initially include online and mobile casino and sportsbook, and such potential opportunities include the ability to leverage its brand recognition and capitalize on cross-selling these new verticals to its existing customer base, as well as to new customers. In addition to online and mobile casino and sportsbook, Amaya currently intends to explore other growth opportunities, including, without limitation, expanding upon its current social gaming offering and pursuing opportunities in daily fantasy sports. With respect to online gaming, Amaya intends to seek licensure in all jurisdictions in which licensure is available and strives to be among the first of the licensed operators in newly regulated jurisdictions, in each case to the extent it would be in furtherance of its business goals and strategy and in compliance with its policies and procedures with respect to the same. For example, see “Regulatory Environment” in the 2014 Annual Information Form.

Amaya also continues to focus on the creation of long-term shareholder value by building upon its existing strengths and expanding and strengthening its portfolio of products and services that the Corporation expects will deliver sustainable, profitable long-term growth. To do this, Amaya is undertaking a number of ongoing strategic initiatives, including: (i) strengthening and expanding its products and services and developing its intellectual property; (ii) expanding its geographical reach; and (iii) pursuing strategic acquisitions and divestitures. See also, “Overview—Recent Highlights”. With respect to its B2B business, Amaya intends to divest such business and use the proceeds therefrom to repay outstanding indebtedness or repurchase the Corporation’s Common Shares pursuant to the 2015 NCIB or otherwise. There can be no assurance as to if and when this divestiture will occur or whether it will occur on the same or substantially similar terms as previously agreed upon. Pending the completion of the divestiture of its B2B business, Amaya intends to continue its strategy of maximizing long-term shareholder value and pursuing sustainable, profitable growth by, among other things, increasing its market share through facilitating the delivery of gaming content across physical and interactive media through its B2B business, strengthening and expanding its existing portfolio of developed and acquired technologies and expanding its geographical reach.

BASIS OF PRESENTATION

The following information and comments are intended to provide a review and analysis of the Corporation’s operational results and financial position for the three-month period ended March 31, 2015, as compared to the three-month period ended March 31, 2014, and with respect to financial condition, as compared to the end of the most recently completed fiscal year. This MD&A should be read in conjunction with the consolidated financial statements and related notes for the three-month period ended March 31, 2015, the 2014 Annual Financial Statements and the 2014 Annual MD&A. Unless otherwise noted, the Corporation’s interim condensed consolidated financial statements and all financial information presented in this MD&A have been prepared using accounting policies consistent with IFRS and in accordance with International Accounting Standard (“IAS”) 34—Interim

Financial Reporting as issued by IASB, and do not include all of the information required for full annual consolidated financial statements. The accounting policies and methods of computation applied in the Corporation’s interim condensed consolidated financial statements are consistent with those applied by the Corporation in 2014 Annual Financial Statements, except for the newly adopted accounting policies described below under “Summary of Significant Accounting Policies—New Significant Accounting Policies” that have had no impact on the comparative period presented in such interim condensed consolidated financial statements and no impact on the 2014 Financial Statements.

SELECTED FINANCIAL INFORMATION


	For the three-month period ended				For the year ended
(in $000’s, except per share data)	March 31, 2015		March 31, 2014 (Adjusted –note 20)		December 31, 2014
Total Revenue		340,133		12,842		571,949

Net Earnings (Loss)		12,963		38,960		(7,529	)

Net Earnings (Loss) from Continuing Operations		22,698		44,373		82,065

Basic Net Earnings (Loss) Per Common Share		0.10		0.41		(0.07	)

Diluted Net Earnings (Loss) Per Common Share		0.06		0.40		(0.07	)

Basic Net Earnings (Loss) from Continuing Operations Per Common Share		0.17		0.47		0.79

Diluted Net Earnings (Loss) from Continuing Operations per Common Share		0.11		0.46		0.63

Total Assets		7,839,202		519,063		7,167,028

Total Long-Term Financial Liabilities		3,832,201		220,245		3,962,292

The Corporation’s growth in revenues during the three-month period ended March 31, 2015, as compared to the three-month period ended March 31, 2014, was primarily a result of the revenues generated from the B2C operations, primarily through the PokerStars brand, which was acquired in August 2014 as a result of the Rational Group Acquisition. The Corporation’s net earnings during the first quarter of 2015 were also primarily a result of the revenues generated from the B2C operations, particularly through the PokerStars brand, however such earnings were offset by a loss from Cadillac Jack and Diamond Game as they were classified as discontinued operations for the period in connection with the anticipated CJ Sale and the Innova Offering.

FINANCIAL CONDITION

The Corporation’s asset base of approximately $7.8 billion was primarily attributable the Rational Group Acquisition. See also “Liquidity and Capital Resources” below.

The Corporation currently anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Senior Facility and Mezzanine Facility. The Corporation also currently anticipates using the net proceeds from the Chartwell/Cryptologic Sale for deleveraging as well as repurchasing Common Shares pursuant to the 2015 NCIB or otherwise. However, there can be no assurance as to if and when the CJ Sale or Chartwell/Cryptologic sale will occur or whether they will occur on the same or substantially similar terms as previously agreed upon.


	For the three-month period ended March 31,
	2015 $000’s		2014 $000’s
Americas		31,776		4,744
Europe		285,278		8,098
Rest of world		23,079		–

Total		340,133		12,842

The revenue increase in all geographic areas for the three-month period ended March 31, 2015, as compared to the three-month period ended March 31, 2014, was primarily attributable to the revenue generated by the B2C business, particularly the products and services offered under the PokerStars brand.

Although prior to the Rational Group Acquisition in August 2014 the vast majority of Amaya’s revenues in 2014, including in the first quarter of 2014, were generated by its B2B land-based and interactive gaming solutions, following the Rational Group Acquisition, the vast majority of its revenues were, and the Corporation expects its revenues to continue to be, generated by its client interface, online and mobile gaming platforms under the B2C business segment. Following the Rational Group Acquisition, the B2C revenues were generated almost entirely through the provision of real-money poker offerings, followed by casino play-money and casino offerings. For a description of the Corporation’s B2B assets strategic review, see “Overview—Recent Highlights—B2B Asset Divestitures”. The Corporation believes its financial condition has remained substantially unchanged since December 31, 2014; however, the Corporation expects to significantly reduce its outstanding long-term debt as a result of the CJ Sale and the Chartwell/Cryptologic Sale, if and when they occur.

For a summary of certain trends and risks that could affect the Corporation’s financial statements or condition in the future, see “Outlook” above and “Risk Factors and Uncertainties” below, respectively.

In addition, Diamond Game and Cadillac Jack were classified as discontinued operations for the period ended March 31, 2015. The following table illustrates the impact of these discontinued operations on the financial condition of the Corporation by presenting the assets and liabilities classified as held for sale in connection with the CJ Sale and the Innova Offering.


	$000’s
Cash		11,973
Accounts receivable		19,165
Income tax receivable		3
Prepaid expenses and deposits		3,890
Inventories		10,184
Goodwill and intangible assets		162,674
Property and equipment		43,428
Deferred development costs		5,172
Deferred income taxes asset		4,403
Receivable under finance lease		1,471

Assets classified as held for sale		262,363


	$000’s
Accounts payable and accrued liabilities		11,695
Provisions		2,760
Income tax payable		421
Other payables		4,701
Deferred revenue		2,336
Deferred income taxes		19,893
Long term debt		413,485

Liabilities classified as held for sale		455,291

SUMMARY OF QUARTERLY RESULTS


For the three months ended (in $000’s, except per share data)	June 30, 2013			September 30, 2013			December 31, 2013			March 31, 2014		June 30, 2014			September 30, 2014			December 31, 2014			March 31, 2015
Revenue		13,967			18,770			10,397			12,842		4,653			212,325			342,129			340,133
Net Earnings (loss)		(11,442	)		(3,466	)		(6,824	)		38,960		(7,588	)		(25,288	)		(13,613	)		12,963
Net Earnings (loss) from Continuing Operations		(5,449	)		791			(1,773	)		44,373		(8,861	)		25,857			25,697			22,698
Basic Net Earnings (loss) per Common Share		(0.13	)		(0.04	)		(0.08	)		0.41		(0.08	)		(0.21	)		(0.10	)		0.10
Diluted Net Earnings (loss) per Common Share		(0.13	)		(0.04	)		(0.08	)		0.40		(0.08	)		(0.15	)		(0.07	)		0.06
Basic Net Earnings (loss) from Continuing Operations per Common Share		(0.06	)		0.01			(0.02	)		0.47		(0.09	)		0.22			0.19			0.17
Diluted Net Earnings (loss) from Continuing Operations per Common Share		(0.06	)		0.01			(0.02	)		0.46		(0.09	)		0.16			0.13			0.11

The foregoing financial data for each of the eight most recently completed quarters has been prepared in accordance with IFRS, and all such periods, other than the three-month period ended March 31, 2015, have been adjusted to the reflect the impact of discontinued operations (see note 12). The presentation currency during such periods was the Canadian dollar.

The increase in revenues during the quarters ended September 30, 2014, December 31, 2014 and March 31, 2015, as compared to the previous five quarters, was primarily attributable to the revenue generated by the B2C operations following the Rational Group Acquisition on August 1, 2014, and to the consolidation of results from the Corporation’s overall business as of that date.

DISCUSSION OF OPERATIONS

Revenue


	For the three-month period ended
	March 31, 2015 $000’s		March 31, 2014 $000’s
B2C*		336,697		–
Software licensing		2,563		7,986
Product sales		349		4,493
Participation leases and arrangements		78		69
Other		446		294

Total		340,133		12,842

*	The Corporation acquired the B2C business on August 1, 2014 pursuant to the Rational Group Acquisition. The B2C revenue is currently primarily generated through hosted poker.

Revenue for the three-month period ended March 31, 2015 was $340.13 million as compared to $12.84 million for the comparable prior year period, representing an increase of 2,549%. This increase was primarily attributable to consolidating B2C revenue, primarily generated by PokerStars, with B2B revenue.

Expenses

Selling

Sales and marketing expenses increased from $3.0 million for the three-month period ended March 31, 2014 to $59.0 million for the three-month period ended March 31, 2015, representing an increase of 1,882%. The increase was primarily the result of advertising and marketing expenses incurred by the B2C business during the three month period ended March 31, 2015.

General and Administrative

General and administrative expenses increased from $12.8 million for the three-month period ended March 31, 2014 to $193.8 million for the three-month period ended March 31, 2015, representing an increase of 1,418%. The increase was primarily the result of (i) a growing employee base due to the Rational Group Acquisition, (ii) gaming duty and processing costs incurred by the B2C business in connection with generating B2C revenues and (iii) increased amortization of purchase price allocated intangibles.

Financial

Financial expenses increased from $(700,000) for the three-month period ended March 31, 2014 to $65.8 million for the three-month period ended March 31, 2015, representing an increase of 8,983%. This increase was primarily the result of interest incurred on the USD First Lien Term Loan, USD Second Lien Term Loan, Senior Facility and Mezzanine Facility (each as defined below) during the three-month period ended March 31, 2015, as offset by unrealized gain on the re-valuation of the EUR First Lien Term Loan during the same period.

Acquisition Related Expenses

Acquisition related expenses increased from $2.6 million for the three-month period ended March 31, 2014 to $2.8 million for the three-month period ended March 31, 2015, representing an increase of 8%. This increase was primarily the result of fees incurred during the three-month period ended March 31, 2015 in connection with CJ Sale and the Innova Offering as compared to underwriter fees and professional fees incurred in connection with the acquisition of Diamond Game during the three-month period ended March 31, 2014.

Current and Deferred Income Tax

Current income taxes increased from $1.0 million for the three-month period ended March 31, 2014 to $2.9 million for the three-month period ended March 31, 2015. This increase was primarily the result of the Rational Group Acquisition and the taxable revenues generated by the Corporation’s B2C operations.

For the three-month period ended March 31, 2015, the Corporation recognized deferred income tax recovery of $2.5 million as compared to recognized deferred income tax recovery of $0.9 million for the comparable prior year period. For the three month period ended March 31, 2014, the Corporation recognized deferred income tax recovery resulting primarily by differences between accounting and tax treatment of purchase price allocated intangibles.

Results from Discontinued Operations

Each of the B2B businesses, Diamond Game (now a wholly owned subsidiary of Innova) and Cadillac Jack, are classified as discontinued operations and their assets and liabilities are classified as held for sale and for the period ended March 31, 2015 (Ongame and its assets and liabilities were also so classified for the period ended December 31, 2014). The table below illustrates the impact of such discontinued operations on the Corporation’s results of operations during such period as compared to the comparable prior-year period:


	For the periods ended
	March 31, 2015 $000’s (except per share data)			March 31, 2014 $000’s (except per share data)
Revenues		30,054			28,360
Expenses		(32,504	)		(32,003	)

Results from operating activities before income taxes		(2,450	)		(3,643	)
Income taxes		7,285			1,770

Net loss from discontinued operations		(9,735	)		(5,413	)

Basic earnings (loss) from discontinued operations per Common Share		(0.07	)		(0.06	)

Diluted earnings (loss) from discontinued operations per Common Share		(0.07	)		(0.06	)

LIQUIDITY AND CAPITAL RESOURCES

Generally, following the Rational Group Acquisition, the Corporation’s working capital needs are minimal as the B2C business, the Corporation’s primary business segment, requires consumers to deposit funds prior to playing or participating in any of the B2C product offerings. Based on the Corporation’s current revenue and continued growth expectations, primarily from its B2C business and the funds available from the Corporation’s existing USD$100 million five-year first lien revolving credit facility, Management believes that the Corporation will have the cash resources to satisfy current working capital needs, fund development activities and other capital expenditures for at least the next 12 months. For a description of the factors and risks that could affect the Corporation’s ability to generate sufficient amounts of cash and cash equivalents, in the short- and long-terms, to maintain the Corporation’s capacity, meet its planned growth or fund development activities, see “Risk Factors and Uncertainties” below.

Moreover, Management is of the opinion that investing is a key element necessary for the continued growth of the Corporation’s customer base and the future development of new and innovative products and solutions. The state of capital markets, micro and macro-economic downturns and contractions of our operations may influence the Corporation’s ability to secure the capital resources required to fund future projects and support growth.

In addition to the descriptions of the Corporation’s debt as set forth below under “Credit Facility” and “Long-Term Debt”, see “General Development of the Business—Financings and Capital Markets Activities” in the 2014 Annual Information Form for further details.

The following is a summary of the Corporation’s contractual obligations as of March 31, 2015:


	Payments due by period ($000’s)
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations		5,452,044		436,313		848,517		862,393		3,304,821
Capital (Finance) Lease Obligations		302		134		134		34		_
Operating Lease Obligations		78,502		11,149		16,853		15,065		35,436
Purchase Obligations		3,803		655		1,574		1,574		_
Other Long-Term Liabilities Reflected on the Registrant’s Balance Sheet		458,160		_		458,160		_		_

Total		5,992,811		448,251		1,325,238		879,066		3,340,257

Credit Facility

The Corporation has an unsecured revolving demand credit facility of USD $100 million, which can be used for general working capital purposes and other corporate purposes. The Corporation obtained this credit facility on August 1, 2014 and it is priced at LIBOR plus 3.75% or ABR plus 2.75%, and matures on August 1, 2019. The applicable commitment fee on this revolving credit facility is based on a leverage ratio of 3.75 to 1.00 and could range from 0.375% to 0.50%. This credit facility contains customary covenants, including, without limitation, maintenance covenants based on certain agreed-upon leverage ratios, each of which the Corporation was in compliance with as of March 31, 2015.

As at each of March 31, 2015 and December 31, 2014, the outstanding amounts of the USD $100 million revolving unsecured demand credit facility equaled USD$ nil.

Long-Term Debt

The following is a summary of long-term debt outstanding at March 31, 2015 and December 31, 2014:


	March 31, 2015, Principal outstanding balance in local denominated currency 000’s		March 31, 2015 Carrying amount $000’s		December 31, 2014, Principal outstanding balance in local denominated currency 000’s		December 31, 2014 Carrying amount $000’s
USD First Lien Term Loan		1,741,250		2,136,431		1,745,625		1,956,220
USD Second Lien Term Loan		800,000		956,353		800,000		873,519
EUR First Lien Term Loan		199,000		263,045		199,500		271,388
Senior Facility (USD)		–		–		238,000		273,910
Mezzanine Facility (USD)		–		–		104,537		102,941
2013 Debentures (CAD)		30,000		28,444		30,000		28,020

Total long-term debt				3,384,273				3,505,998

Current portion				39,058				11,451

Non-current portion				3,345,215				3,494,547

2013 Debentures

During the three-months ended March 31, 2015, the Corporation incurred $980,000 in interest, of which $420,000 relates to interest accretion, as compared to $890,000 in interest during the three-months ended March 31, 2014, of which $370,000 relates to interest accretion. There have been no material movements in the debt and equity components of the private placement of units recognized during the three-month period ended March 31, 2015 as compared to the three-month period ended December 31, 2014.

The following table sets forth the repayment obligations under the debt component of the private placement of units during the next two fiscal years:


	$000’s
2015		–
2016		30,000

Credit Facilities and Senior Facility

On December 20, 2013, Cadillac Jack entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack has access to term loans in an aggregate principal amount of up to USD $160 million (the “Credit Facilities”). The Credit Facilities replaced the existing USD $110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and the remaining amounts are being used to fund the ongoing working capital and other general corporate purposes. On May 15, 2014, Cadillac Jack obtained an incremental USD $80 million term loan to the Credit Facilities through an amendment thereto for the purpose of financing working capital expenses and general corporate purposes of the Corporation. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.5% with a 1% LIBOR floor (as amended, the “Senior Facility”). The Senior Facility will mature over a five-year term from the closing date and is secured by the stock of Cadillac Jack and the assets of Cadillac Jack and its subsidiaries. The Senior Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios, each of which the Corporation was in compliance with as of March 31, 2015. Amaya has provided an unsecured guarantee of the obligations under the Senior Facility in favor of the lenders.

During the three-month period ended March 31, 2015, the Corporation reclassified the Senior Facility as a liability held for sale. During the period, the Corporation incurred interest of $7.13 million, of which $110,000 relates to interest accretion, as compared to $3.64 million during the three-month period ended March 31, 2014, of which $110,000 relates to interest accretion.

The remaining principal repayments of the Senior Facility over the next five years amount to the following:


	$000’s
2015		3,040
2016		3,040
2017		3,040
2018		3,040
2019		288,531

Mezzanine Facility

On May 15, 2014, Cadillac Jack obtained a mezzanine subordinated unsecured loan (the “Mezzanine Facility”) in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash. The Mezzanine Facility will mature over a 6-year term from the closing date and is unsecured. Amaya has provided an unsecured guarantee of the obligations under the Mezzanine Facility in favor of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios, each of which the Corporation was in compliance with as of March 31, 2015. In connection with the Mezzanine Facility, the Corporation granted the lenders 4,000,000 Common Share purchase warrants, entitling the holders thereof to acquire one Common Share per warrant at a price per Common Share equal to $19.17 at any time up to a period ending ten years after the closing date.

During the three-month period ended March 31, 2015, the Corporation reclassified the Mezzanine Facility as liabilities held for sale. During the period, the Corporation incurred $4.58 million in interest on the Mezzanine Facility, of which $0.36 million relates to interest accretion and $2.27 million relates to paid in kind interest.

The remaining principal repayments under the Mezzanine Facility over the next five years amount to the following:


	$000’s

2015		–

2016		–

2017		–

2018		–

2019+		126,660

The Corporation currently anticipates using the net proceeds from the CJ Sale primarily for deleveraging, including the repayment of the Senior Facility and Mezzanine Facility. However, there can be no assurance as to if and when the CJ Sale will occur or whether it will occur on the same or substantially similar terms as previously agreed upon.

First and Second Lien Term Loans

On August 1, 2014, Amaya completed the Rational Group Acquisition, which was partly financed through the issuance of long term debt, allocated as follows:

First Lien Term Loans

The Corporation is required to allocate 50% of the excess cash flow of the Corporation to the principal repayment of the First Lien Term Loans. Excess cash flow is referred to as EBITDA of the Rational Group on a consolidated basis for such excess cash flow period (i.e., each fiscal year commencing with the fiscal year ending on December 31, 2015), minus, without duplication, debt service, capital expenditures, permitted business acquisitions and investments, taxes paid in cash , increases in working capital, cash expenditures in respect of swap agreements, any extraordinary, unusual or nonrecurring loss, income or gain on asset dispositions, and plus, without any duplication, decreases in working capital, capital expenditures funded with the proceeds of the issuance of debt or the issuance of equity, cash payments received in respect of swap agreements, any extraordinary, unusual or nonrecurring gain realized in cash and cash interest income to the extent deducted in the computation of EBITDA.

The percentage allocated to the principal repayment can fluctuate based on the following:

•

If the total secured leverage ratio at the end of the applicable excess cash flow period is less than or equal to 4.00 to 1.00, the repayment will be 0% of the excess cash flow.

The agreement for the First Lien Term Loans restricts the Corporation from, among other things, incurring additional debt, making certain investments or granting additional liens on its assets and equity, distributing equity interests and distributing any assets to third parties.

On March 16, 2015, Amaya announced that it entered into the Swap Agreements, which allow for the creation of synthetic Euro-denominated debt with fixed Euro interest payments at an average rate of 4.6016% (a simple average of the different interest rates for the various Swap Agreements) to replace the USD interest payments bearing a minimum floating interest rate of 5.0% (USD three-month LIBOR plus a 4.0% margin, with a LIBOR floor of 1.0%) related to the USD First Lien Term Loan. The interest and principal payments for the Swap Agreements, which mature in five years, will be made at a Euro to USD exchange rate of 1.1102 on USD notional amounts of $1.74 billion.

The USD First Lien Term Loan remaining principal repayments over the next five years amount to the following:


	$000’s
2015		174,970
2016		198,084
2017		211,181
2018		224,841
2019+		1,399,353

During the three-month period ended March 31, 2015, the Corporation incurred $3.05 million in interest, of which $380,000 relates to interest accretion, and repaid $680,000 in relation thereto.

The EUR First Lien Term Loan remaining principal repayments over the next five years amount to the following:


	$000’s
2015		21,479
2016		24,316
2017		25,924
2018		27,601
2019+		171,779

USD Second Lien Term Loan

The second lien term loan consists of a USD$800 million eight-year loan priced at LIBOR plus 7.00%, with a 1.00% LIBOR floor repayable on August 1, 2022 (the “USD Second Lien Term Loan”). During the three-month period ended March 31, 2015, the Corporation incurred $21.5 million in interest on the USD Second Lien Term Loan of which $1.35 million relates to interest accretion.

The USD Second Lien Term Loan remaining principal repayments over the next five years amount to the following:


	$000’s

2015		–

2016		–

2017		–

2018		–

2019+		1,014,641

For the three-month period ended March 31, 2015, the Corporation also designated the entire principal amount of its USD Second Lien Term Loan and USD $400 million of the deferred purchase price for the Rational Group Acquisition as a foreign exchange hedge of its net investment in its foreign operations. As a result, during the three-month period ended March 31, 2015, the Corporation recorded an unrealized exchange loss on translation of $81.48 million in the consolidated statement of comprehensive income related to the translation of the USD Second Lien Term Loan and such deferred purchase price.

CASH FLOWS BY ACTIVITY

The table below outlines a summary of cash inflows (outflows) by activity.


	For the three-month period ended
	March 31, 2015 $000’s			March 31, 2014 $000’s
Operating activities		79,328			568
Financing activities		(5,567	)		(352	)
Investing activities		(151,863	)		24,577

Cash Provided by (Used In) Operations

The Corporation generated positive cash flows from operating activities for the three-month period ended March 31, 2015. This was primarily the result of B2C revenue generated by the B2C business. Cash generated by operating activities for the three-month period ended March 31, 2015 was $79.3 million as compared to $568,000 for the comparable prior year period.

Cash Provided by (Used In) Financing Activities

The cash used for financing activities for the three-month periods ended March 31, 2015 and 2014 was $5.6 million and $352,000, respectively. During the three-month period ended March 31, 2015, the primary expenditure affecting the cash used for financing activities was the repayment of debt. During the three-month period ended March 31, 2014, cash used in financing activities was primarily related to the repayment of long-term debt.

Cash Provided by (Used In) Investing Activities

The use of cash in investing activities for the three-month period ended March 31, 2015 was $151.9 million as compared to cash provided by investing activities of $24.6 million for the comparable prior year period. During the three-month period ended March 31, 2015, the Corporation’s use of cash in investing activities primarily resulted from restricting cash for the Rational Group deferred payment in connection with the Rational Group Acquisition and further cash used to purchase available for sale investments. During the three-month period ended March 31, 2014, the Corporation’s cash provided by investing activities was primarily the result of proceeds from the sale of WagerLogic Malta Holdings Limited (“WagerLogic”, as partially offset by the acquisition of Diamond Game.

Cash Flows from (Used In) Discontinued Operations

Each of the B2B businesses, Diamond Game (now a wholly owned subsidiary of Innova) and Cadillac Jack, are classified as discontinued operations and their assets and liabilities are classified as held for sale and for the period ended March 31, 2015 (Ongame and its assets and liabilities were also so classified for the period ended December 31, 2014). The table below illustrates the impact of such discontinued operations on the Corporation’s cash flows during such period as compared to the comparable prior-year period:


	For the three-month period ended
	March 31, 2015 $000’s			March 31, 2014 $000’s
Operating activities		6,378			924
Financing activities		(1,840	)		(562	)
Investing activities		(12,498	)		(23,392	)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Other than as set forth below under “New Significant Accounting Policies”, there have been no changes to the Corporation’s significant accounting policies or critical accounting estimates or judgments from those described under “Summary of Significant Accounting Policies” in the 2014 Annual MD&A.

New Significant Accounting Policies

Derivative Financial Instruments

From time to time the Corporation uses derivative instruments for risk management purposes. The Corporation does not use derivative instruments for speculative trading purposes. All derivatives are recorded at fair value on the statements of financial position. The method of recognizing unrealized and realized fair value gains and losses depends on whether the derivatives are designated as hedging instruments. For derivatives not designated as hedging instruments, unrealized gains and losses are recorded in financial expenses on the condensed consolidated statements of earnings. Fore derivatives designated as hedging instruments, unrealized and realized gains and losses are recognized according to the nature of the hedged item.

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in the consolidated statements of comprehensive income. The gain or loss relating to the ineffective portion is recognized in the consolidated statements of earnings. Gains and losses accumulated in other comprehensive income are included in the consolidated statements of earnings when the foreign operation is partially disposed of or sold.

RECENT ACCOUNTING PRONOUNCEMENTS

Changes in Accounting Policies Adopted

There have been no changes to the Corporation’s accounting policies adopted from those described under “Recent Accounting Pronouncements—Changes in Accounting Policies Adopted” in the 2014 Annual MD&A.

New Accounting Pronouncements - Not Yet Effective

IFRS 9, Financial Instruments

IFRS 9 also includes a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting.

IFRS 15, Revenues from Contracts with Customers

On April 28, 2015, the IASB has tentatively decided to postpone the initial January 1, 2017 effective date to January 1, 2018 with early adoption permitted. The Corporation is currently evaluating the impact of applying this standard.

OFF BALANCE SHEET ARRANGEMENTS

As of March 31, 2015, the Corporation had no off-balance sheet arrangements that have had, or are reasonably likely to have, a current or future effect on the financial performance or financial condition of the Corporation.

OUTSTANDING SHARE DATA

As at May 14, 2015, the Corporation had a total of 133,792,728 Common Shares issued and outstanding, 1,139,249 Preferred Shares issued and outstanding and exercisable for 48,892,770 Common Shares, 9,413,503 options issued under the Corporation’s share option plan and exercisable for the same number of Common Shares, of which 2,521,282 were exercisable, and 15,570,435 Common Share purchase warrants issued and outstanding and exercisable for the same number of Common Shares.

DISCLOSURE CONTROLS AND PROCEDURES AND

INTERNAL CONTROL OVER FINANCIAL REPORTING

the Corporation has filed certificates signed by the CEO and the CFO that, among other things, report on the design of each of DC&P and ICFR.

Changes to Internal Control over Financial Reporting

There has been no change in Amaya’s ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, Amaya’s ICFR.

Limitation on Scope of Design

NI 52-109 allows an issuer to limit its design of DC&P and ICFR to exclude a business acquired not more than 365 days before the end of the period to which the certificate relates. Within 365 days from the financial quarter ended March 31, 2015, Amaya acquired the Rational Group, effective August 1, 2014. As allowed by NI 52-109, the CEO and CFO have limited the scope of their design of DC&P and ICFR to exclude controls, policies and procedures of this business.

RISK FACTORS AND UNCERTAINTIES

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. Current and prospective investors should consider carefully the risks and uncertainties described below, in addition to other information contained in this MD&A, our condensed consolidated financial statements and related notes, the 2014 Annual Information Form and 2014 Annual Financial Statements. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that could adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose part or all of your investment.

•

Amaya’s outstanding credit facilities subject it to financial covenants which may limit its flexibility. Amaya is also exposed to the risk of increased interest rates.

•

Amaya’s online offerings are part of new and evolving industries, which presents significant uncertainty and business risks.

•

Amaya’s success in the competitive gaming and interactive entertainment industries depends in large part on its ability to develop and manage frequent introductions of innovative products.

•

The Corporation’s products are becoming more sophisticated, resulting in additional expenses and the increased potential for loss in the case of an unsuccessful product.

•

Acquisitions involve risks that could negatively affect the Corporation’s operating results, cash flows and liquidity.

•

The Corporation could face considerable business and financial risks in investigating, completing and implementing acquisitions.

•

New products may be subject to complex and dynamic revenue recognition standards, which could materially affect the Corporation’s financial results.

•

The Corporation’s business is vulnerable to changing economic conditions and to other factors that adversely affect the industries in which it operates.

•

Litigation costs and the outcome of litigation could have a material adverse effect on the Corporation’s business.

•

The risks related to international operations, in particular in countries outside of the United States and Canada, could negatively affect the Corporation’s results.

•

The Corporation is subject to various domestic and international laws and regulations relating to, among other things, trade, export controls, and foreign corrupt practices, the violation of which could adversely affect its operations, reputation, business, prospects, operating results and financial condition.

•

Privacy concerns could result in regulatory changes and impose additional costs and liabilities on the Corporation, limit its use of information, and adversely affect its business.

•

The Corporation’s results of operations could be affected by natural events in the locations in which it operates or where its customers or suppliers operate.

•

The gaming industry is heavily regulated and failure by the Corporation to comply with applicable requirements could be disruptive to its business and could adversely affect its operations.

•

The Corporation’s ability to operate in its existing jurisdictions or expand in new jurisdictions could be adversely affected by new or changing laws or regulations, new interpretations of existing laws or regulations, and difficulties or delays in obtaining or maintaining required licenses or product approvals.

•

Amaya’s intellectual property may be insufficient to properly safeguard its technology and brands.

•

The Corporation may be subject to claims of intellectual property infringement or invalidity and adverse outcomes of litigation could unfavorably affect its operating results.

•

Compromises of the Corporation’s systems or unauthorized access to confidential information or Amaya’s customers’ personal information could materially harm Amaya’s reputation and business.

•

Service interruptions of Internet service providers could impair the Corporation’s ability to carry on its business.

•

There is a risk that the Corporation’s network systems will be unable to meet the growing demand for its online products.

•

Systems, network or telecommunications failures or cyber-attacks may disrupt the Corporation’s business and have an adverse effect on Amaya’s results of operations.

•

Amaya’s products and operations may experience losses due to technical problems or fraudulent activities.

•

The Corporation’s Common Shares rank junior to the Preferred Shares with respect to amounts payable in the event of a liquidation.

•

The Corporation’s advance notice bylaws may prevent attempts by its shareholders to replace or remove its current management.

•

Future sales or the possibility of future sales of a substantial amount of the Corporation’s Common Shares may depress the price of the Corporation’s Common Shares.

•

The price and trading volume of the Common Shares may fluctuate significantly.

•

All historical information relating to Rational Group prior to the Rational Group Acquisition presented in, or due to lack of information omitted from, the Corporation’s documents filed on SEDAR, including the Corporation’s Management Information Circular, dated June 30, 2014, for the annual and special meeting of shareholders of the Corporation held on July 30, 2014 and the Corporation’s Business Acquisition Report filed on October 15, 2014, including all financial information of Rational Group, has been provided in exclusive reliance on the information made available by Rational Group and their respective representatives. Although the Corporation has no reason to doubt the accuracy or completeness of Rational Group’s information provided therein, any inaccuracy or omission in such information contained could result in unanticipated liabilities or expenses, increase the cost of integrating Amaya and Rational Group or adversely affect the operational plans of the combined entities and its results of operations and financial condition.

A detailed description of the risks and uncertainties affecting Amaya and its business as set forth above, as well as additional risks and uncertainties, can be found in the 2014 Annual Information Form. Shareholders and prospective investors are urged to read and consider such risk factors.

FURTHER INFORMATION

Additional information relating to Amaya and its business, including the 2014 Annual Information Form, 2014 Annual MD&A and 2014 Annual Financial Statements, may be found on SEDAR at www.sedar.com. Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of Amaya securities and securities authorized for issuance under equity compensation plans, is also contained in the Corporation’s most recent management information circular.

Montreal, Québec

May 14, 2015

(Signed) “Daniel Sebag”

Daniel Sebag, CPA, CA

Chief Financial Officer

LOGO

EX-99.13

Exhibit 99.13

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, David Baazov, Chief Executive Officer of Amaya Inc., certify the following:

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of *Amaya Inc.* (the “issuer”) for the interim period ended *March 31, 2015*.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2

N/A

5.3	*Limitation on scope of design:* The issuer has disclosed in its interim MD&A

(a)

the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(i)

N/A;

(ii)

N/A;

(iii)

a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and

(b)

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 14, 2015

/s/ David Baazov

David Baazov

Chief Executive Officer

EX-99.14

Exhibit 99.14

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Daniel Sebag, Chief Financial Officer of Amaya Inc., certify the following:

1.	*Review:* I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of *Amaya Inc.* (the “issuer”) for the interim period ended *March 31, 2015*.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	*Design:* Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	*Control framework:* The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2

N/A

5.3	*Limitation on scope of design:* The issuer has disclosed in its interim MD&A

(a)

the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(i)

N/A;

(ii)

N/A;

(iii)

a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and

(b)

Date: May 14, 2015

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

EX-99.15

Exhibit 99.15

FORM 51-102F4

BUSINESS ACQUISITION REPORT

Item 1.

Identity of Company

1.1 Name and Address of Company

Amaya Gaming Group Inc. (the “Corporation”)

7600 Trans Canada Hwy

Pointe-Claire, Québec H9R 1C8

1.2 Executive Officer

For further information, please contact Daniel Sebag, Chief Financial Officer of the Corporation, at 514-744-3122.

Item 2.

Details of Acquisition

2.1 Nature of Business Acquired

On August 1, 2014, the Corporation, through a wholly-owned subsidiary Amaya Holdings B.V. (“AcquireCo”), acquired 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the parent company of Rational Group Ltd. (“Rational Group”), for an aggregate purchase price of approximately US$4.9 billion, which includes a deferred payment (the “Purchase Price”) (the “Acquisition”).

Oldford Group, through its wholly-owned subsidiary Rational Group, operates gaming and related businesses and brands including PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. In addition to operating two of the largest online poker sites, the group is the largest producer of live poker events in the world.

For more information concerning Oldford Group, please refer to Appendix N of the management information circular of the Corporation dated June 30, 2014 (the “Circular”) available under the Corporation’s profile on SEDAR at www.sedar.com.

2.2 Date of Acquisition

August 1, 2014 (the “Closing Date”).

2.3 Consideration

On the Closing Date, cash consideration of US$4.5 billion (the “Upfront Purchase Price”) was paid to the shareholders, optionholders and certain other participating equityholders of Oldford Group (collectively, the “Sellers”) pursuant to the terms of the deed and scheme of merger agreement entered into on June 12, 2014 by the Corporation with AcquireCo, Titan IOM Mergerco Ltd., Oldford Group and the Sellers (the “Deed”). The Deed also provides for a deferred payment of US$400 million, which shall be subject to adjustment based upon the occurrence of certain events, payable to the Sellers within thirty (30) months of the Closing Date. There is no interest on the deferred payment.

The Upfront Purchase Price and fees and expenses relating to the Acquisition that were paid by closing of the Acquisition were financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares, allocated as follows: (i) US$1.05 billion of convertible preferred shares, (ii) C$640 million of subscription receipts at C$20 per subscription receipt which were automatically converted into common shares on a one-to-one basis upon closing of the Acquisition, (iii) US$55 million of common shares subscribed at C$20 per common share, (iv) senior secured credit facilities in the aggregate principal amount of approximately US$2.92 billion, and (v) cash on hand in the amount of US$213 million.

2.4 Effect on Financial Position

Upon closing of the Acquisition, Oldford Group’s CEO, founders and shareholders and certain other principals resigned from all positions with Oldford Group. However, the other primary executive officers including the CFO and COO and other members of the management team were retained to continue leading the business. No other material changes occurred within the corporate structure, management or personnel of Oldford Group as there was minimal overlap between the Corporation’s business-to-business operations and Oldford Group’s business-to-consumer operations.

The Acquisition is expected to generate revenue synergies since part of the Corporation’s previously existing business is the licensing of online casino gaming content to third party “business to consumer” (B2C) gaming operators. Following announcement of the Acquisition, the Corporation has integrated its library of casino games into the PokerStars and Full Tilt online casino offerings, which is expected to generate increased revenues at a relatively low marginal cost.

The Acquisition also provides opportunities for geographic growth as Oldford Group generated no revenue in the United States. As jurisdictions within the United States become regulated, the Corporation, which has numerous licenses in the United States, anticipates its ownership will have the potential to accelerate the entry of PokerStars and Full Tilt into these newly regulated markets.

The acquired business has historically required a relatively low amount of capital expenditure and working capital and Oldford Group’s base in the Isle of Man results in a low corporate tax rate, which should not be affected by the acquisition structure. The Corporation expects that the balance sheet will continue to deleverage over the 18 to 30 months following the Closing Date due to the cash generation profile of the combined company, paired with projected growth.

For additional details of the effect of the Acquisition on the Corporation’s financial position and results of operations, see the financial statements referred to under “Item 3 – Financial Statements” of this business acquisition report.

2.5 Prior Valuations

None.

2.6 Parties to Transaction

The Acquisition was not with an informed person, associate or affiliate of the Corporation.

2.7 Date of Report

October 15, 2014.

- 2 -

Item 3.

Financial Statements

The following financial statements are appended hereto and form an integral part of this business acquisition report:

(a)	the audited consolidated financial statements of Oldford Group as at and for the year ended December 31, 2013, together with the notes thereto (appended hereto as Schedule “A”);

(b)	the unaudited financial statements of Oldford Group as at and for the six-month period ended June 30, 2014, together with the notes thereto (appended hereto as Schedule “B”);

(c)	unaudited pro forma consolidated statement of financial position of the Corporation as at June 30, 2014, together with the notes thereto (appended hereto as Schedule “C”);

(d)	unaudited pro forma consolidated statement of comprehensive income of the Corporation for the six-month period ended June 30, 2014, together with the notes thereto (appended hereto as Schedule “C”); and

(e)	unaudited pro forma consolidated statement of comprehensive income of the Corporation for the year ended December 31, 2013, together with the notes thereto (appended hereto as Schedule “C”).

The Corporation has not requested or obtained the consent of the auditors of the above-noted financial statements to include or incorporate by references their audit report in this business acquisition report.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The Corporation’s public communications often include oral or written forward-looking statements. Statements of this type are included in this business acquisition report and may be included in other filings with Canadian securities regulators or in other communications. All such statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of the words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “foresee”, “could”, “goal”, “strive”, “might”, “would”, “should”, “believe”, “objective”, “ongoing” or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on the Corporation’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. The Corporation’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. The Corporation can give no assurance that such estimates, beliefs and assumptions will prove to be correct. This business acquisition report contains forward-looking statements concerning, in particular, the combined company’s financial position, cash flow and growth prospects, certain strategic benefits and operational benefits, and the Corporation’s and Oldford Group’s anticipated future results. The pro forma information appended hereto should not be considered to be what the actual financial position or other results of operations would have necessarily been had the Corporation and Oldford Group operated as a single combined company as, at, or for the periods stated.

- 3 -

entrants to the marketplace, changes in economic conditions including the rate of inflation or deflation, changes in interest and currency exchange rates and derivative and commodity prices; failure to achieve desired results in labour negotiations; failure to attract and retain key employees or effectively manage succession planning; damage to the reputation of brands promoted by the combined company; new, or changes to current, gaming laws in various jurisdictions; changes in the combined company’s regulatory liabilities including changes in tax laws, regulations or future assessments; new, or changes to existing, accounting pronouncements; the risk of violations of law, breaches of the combined company’s policies or unethical behaviour; the risk of material adverse effects arising as a result of litigation; and events or series of events that may cause business interruptions. For additional information, please refer to the “Risk Factors” section of the Circular and the Corporation’s annual information form dated March 31, 2014, both of which are available on SEDAR at www.sedar.com.

Readers should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might change. The Corporation cautions that the foregoing list of significant risk factors is not exhaustive. The forward-looking statements contained in this business acquisition report are expressly qualified by this cautionary statement. Unless otherwise indicated by the Corporation, forward-looking statements in this business acquisition report describe the Corporation’s expectations as of the date of this report and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required by law.

- 4 -

SCHEDULE “A”

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

OF OLDFORD GROUP FOR THE YEAR ENDED DECEMBER 31, 2013

OLDFORD GROUP LIMITED

Annual Report and Consolidated Financial Statements

Year Ended 31 December 2013

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013


Contents	Page

Directors and Advisors		1

Report of the Board of Directors		2 - 4

Report of the Independent Auditors		5

Consolidated Income Statement		6

Consolidated Statement of Comprehensive Income		7

Consolidated Statement of Financial Position		8

Company Statement of Financial Position		9

Consolidated Statement of Changes in Equity		10

Company Statement of Changes in Equity		11

Consolidated Statement of Cash Flows		12

Company Statement of Cash Flows		13

Notes to the Consolidated Financial Statements		14 - 41

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Directors and Advisors

Directors


		P Schapira
		I M Scheinberg
Registered Agent

		Appleby Trust (Isle of Man) Limited

Registered Office

		Douglas Bay Complex, Kind Edward Road, Onchan, Isle of Man, IM3 1DZ

Company Number

		010483V

Auditors

		Haines Watts London LLP New Derwent House 69 - 73 Theobalds Road London WC1X 8TA

Principal Solicitors

		Herzog, Fox & Neeman, Asia House, 4 Welzmann Street, Tel Aviv, Israel

Page 1

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Report of the Board of Directors

The directors present their annual report and consolidated financial statements of Oldford Group Limited (“the Company”) for the year ended 31 December 2013.

Principal activity and incorporation

The Company was incorporated on 10 October 2001 In the British Virgin Islands as the holding company of a group of companies providing online poker (“the Group”). The headquarters of the Company and the Group have been located in the Isle of Man since August 2005. The Company obtained a certificate of continuation under the Isle of Man Companies Act 2006 on 20 November 2013 and discontinued as a BVI company in the British Virgin Islands on 26 November 2013.

Business review

The Group operates two main online poker brands; “PokerStars” and “Full Tilt”. PokerStars is the world’s largest online poker site and the leader in Online Tournaments worldwide with yearly events such as the World Championship of Online Poker (WCOOP) and World Cup of Poker (WCP). PokerStars also has the largest online tournament prizes with the weekly guaranteed Sunday Million event. PokerStars broke the Guinness world record in 2011 for having the largest online tournament with 200,000 players (PokerStars record from 2009). This record was again broken in June 2013 with a tournament featuring 225,000 participants.

Poker is widely considered to be one of the world’s most popular card games. Poker’s popularity has increased significantly over the last five years with the advent of televised poker events such as the World Poker Tour (WPT) and the World Series of Poker (WSOP), together with televised celebrity poker, which have attracted large audiences. A key driver in the growth in the popularity of televised poker has been the use of cameras embedded In the table to show the players’ cards, enabling television viewers to follow the game strategies of the players. PokerStars is available In 31 languages and is played in over 250 locations.

The Group has been granted licences to various regulated markets over the preceding years, these are detailed below:


Jurisdiction	Brand	Licence granted	Licence no.	Regulator
Isle of Man	PokerStars	31/07/2005	N/A	IoM Gambling Supervision Committee (GSC)
Italy	PokerStars	10/10/2008	15023	Agenzla delle Dogane e del Monopoll (AAMS)
France	PokerStars	25/06/2010	0006-PO-2010-06-25	Autorité de regulation des Jeux en ligne (ARJEL)
Estonia	PokerStars	20/09/2010	12.2-2/283-1	Estonian Tax and Customs Board (ETCB)
Belgium	PokerStars	20/04/2011	E121495	Belgium Gaming Commission (BGC)
Malta	PokerStars	22/12/2011	LGA/CL3/795/2011	Lotteries and Gaming Authority (LGA)
Denmark	PokerStars	01/01/2012	11-204104	Danish Gambling Authority (DGA)
Spain	PokerStars	01/06/2012	03-11/GO/461241/SGR	Direcclón General de Ordenaclón del Juego (DGOJ)
Isle of Man	Full Tilt Poker	09/10/2012	N/A	IoM Gambling Supervision Committee (GSC)
Malta	Full Tilt Poker	10/12/2012	LGA/CL3/846/2013	Lotteries and Gaming Authority (LGA)
Germany	PokerStars	21/12/2012	N/A	Schleswig Holstein (www.schleswlg-holstein.de)

PokerStars launched its first real money play application on a mobile platform in January 2012. This was in line with our strategy to make poker available on any platform and has proven to be an excellent acquisition tool. Using PokerStars ambassador Rafael Nadal in mobile marketing campalgns allowed us to further promote this product PokerStars signed former Brazilian football star Ronaldo as a brand ambassador this year, joining tennis superstar Nadal as a promoter of poker In a continued effort to Introduce poker to new audiences and to Increase consumer creditability and confidence In online poker.

Page 2

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Report of the Board of Directors (continued)

Business review (continued)

PokerStars officially launched its fast-fold ring game format called ‘Zoom Poker’ In May 2012 which has become a massive hit, with more than a quarter of all cash game hands on the Internet being played in Zoom. Full Tilt launched a similar yet different product called ‘Rush Poker’ which is a popular innovation, offering players the fastest, slickest action in online poker, and is available in both tournament and ring game formats.

PokerStars maintains its position as the market leader by continuing to improve its products and by Introducing new Innovative features. The company lunched a new play money offering known as ‘Freemlum’, in October 2013. This allows our play money customers to purchase money chip bundles for real cash and facilitates the acceleration and enhancement of their gaming experience through the occasional purchase of these chips. The sale of play money chips has the potential to become a significant revenue stream for the Group.

The Facebook client was launched in beta phase in August 2013 which allows our play money customers to play for free, share achievements with friends and enjoy the greatest selection of play money poker games available on Facebook.

Full Tilt Poker celebrated its first year anniversary (launched in November 2012) with the brand becoming established resulting in an increase in Group market share. The Group looks forward to Introducing new poker game variants in the near future which will help to differentiate the brand and attract more players.

June this year marked a huge milestone for PokerStars when we dealt our 100 billionth hand of online poker. In addition, PokerStars received the prestigious Online Poker Operator of the Year award for the second consecutive year at the International Gaming Awards and the Best Mobile Poker Operator award at the mGaming Awards.

The Group continues to show steady growth in revenue year on year. The $157.0M, 16.1% (2012; $111.4M, 12.9%) Increase in revenue was partly achieved by a 14.7% (2012; 3.2%) increase in the number of unique players who played on the Group’s websites, coupled by a 8.4% (2012; 1.7%) Increase in Active Player Days. Much of this growth in activity was attributable to the re-branding of the Full Tilt brand and a full year of activity in 2013.

Expenses increased by $46.1M, 7.0% (2012; $23.5M, 3.5% decrease) mainly as a result of the inclusion of Full Tilt Poker for a full year. The Group continued to Invest in all offices with overall headcount growing by 10.5% (2012; 20.1%), which was mainly attributed to the incorporation and expansion of Full Tilt Poker. These Increases in costs were however offset by controlling the Group’s marketing spend.

Profit from operations increased $110.9M, 34.7% (2012; $135.0M, 73.2%), primarily driven by the release of historic dormant account balances and revenues from the sale of play money chips, a reduction in distribution and administration costs as a percentage of gaming revenues and a full year of activity on the Full Tilt brand in 2013 compared to two months in 2012. In addition, Full Tilt brand performance has significantly Improved year on year due to operating losses in 2012, attributable to pre-launch expenses and the write-off of historic bad debts.

Risks & uncertainties facing the business

The Group operates in the online environment in which the regulatory environment is rapidly evolving. The Group seeks legal advice from leading practitioners in Jurisdictions in which it has a physical presence or from which a substantial part of its revenue is drawn and acts in accordance with such advice.

Goals and objectives

Our primary corporate objective is to deliver the best customer experience for poker players, by leading in product innovation, customer service and engaging with our players in multiple ways to develop PokerStars and Full Tilt Poker as the leading brands in poker. To achieve our objectives we need to be the first to launch into newly regulated markets to maintain and grow our global number one market share position in online poker.

Our other objectives include being a socially responsible operator and to be an employer of choice.

Operational review

Results and dividends

The results for the Group for the financial year ended 31 December 2013 are set out within the consolidated income statement on page 6.

The directors recommend dividends during the year which are set out in note 33.

Page 3

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Report of the Board of Directors (continued)

Operational review (continued)

Future expectations

The Group intends to continue to promote and develop its online poker business in its core markets and increase the awareness of the ‘PokerStars’ and ‘Full Tilt’ brands in the markets. A new product and revenue stream anticipated for the forthcoming year is casino games under the Full Tilt brand and platform. This product will help us create a stronger experience for the player and to meet the demands in the market. It is a natural extension of our new strategy for the Full Tilt brand as we aim to create an exciting and unique customer gaming experience. Overall it is anticipated that 2014 will continue to show improved results.

Directors

The directors who served during the year and to the date of signature of this report were:

P Schapira

I M Scheinberg

Directors’ responsibilities

The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and International Financial Reporting Standards (“IFRSs”) and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:

•

select suitable accounting policies and then apply them consistently;

•

make judgements and accounting estimates that are reasonable and prudent;

•

prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business; and

•

state that the financial statements comply with IFRSs.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Provision of information to auditors

Each of the persons who are directors at the time when this Directors’ Report is approved has confirmed that, so far as they are aware, there is no relevant audit information of which the Group’s auditors are unaware, and that each director has taken all the steps that ought to have been taken as a director in order to be aware of any information needed by the Group’s auditors in connection with preparing their report and to establish that the Group’s auditors are aware of that information.

Auditors

Haines Watts London LLP are deemed to be re-appointed under section 487(2) of the Companies Act 2006.

On behalf of the Board

LOGO

P Schapira

21 March 2014

Page 4

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Independent Auditor’s Report to the Shareholders of Oldford Group Limited

We have audited the financial statements of Oldford Group Limited (“the Company”) for the year ended 31 December 2013 which comprise the Group Income Statement and Statement of Comprehensive Income, the Group and Parent Company Statements of Financial Position, the Group and Parent Company Statements of Cash Flows, the Group and Parent Company Statements of Changes in Equity and the related notes 1 to 37. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (“IFRSs”) and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Section 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/UKNP.

Opinion on financial statements

In our opinion:

•

the financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs as at 31 December 2013 and of the Group’s profit for the year then ended;

•

the financial statements have been properly prepared in accordance with IFRSs;

•

the parent company financial statements have been properly prepared in accordance with IFRSs and, as applied in accordance with the provisions of the Companies Act 2006; and

•

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

•

the parent company financial statements are not in agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration specified by law are not made; or

•

we have not received all the information and explanations we require for our audit.

LOGO


New Derwent House		Matthew Perry (Senior Statutory Auditor)
69 - 73 Theobalds Road		For and on behalf of:
London		HAINES WATTS LONDON LLP
WC1X 8TA		Chartered Accountants
21 March 2014		& Statutory Auditor

Page 5

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Consolidated Income statement for the year ended 31 December 2013


	Note		Year ended 31 Dec 2013 $‘000			Year ended 31 Dec 2012 $‘000
Revenue				1,133,417			976,439
Distribution costs		8		(268,040	)		(249,055	)
Administration costs		8		(435,337	)		(408,196	)

Profit from operations				430,040			319,188
Net investment losses		12		(6,910	)		(3,237	)
Net finance (costs)/income		13		(1,122	)		1,174

Profit before tax				422,008			317,125
Income tax expense		14		(5,333	)		(3,508	)

Profit for the year				416,675			313,617

Attributable to:
Equity holders of the parent				416,404			313,031
Non-controlling interests		32		271			586

				416,675			313,617

The notes on pages 14 - 41 form part of these financial statements.

Page 6

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Consolidated statement of comprehensive income for the year ended 31 December 2013


	Note		Year ended 31 Dec 2013 $‘000			Year ended 31 Dec 2012 $‘000
Profit for the year				416,675			313,617
Other comprehensive income
Items that will be reclassified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations		31		(184	)		(36	)
Available for sale financial assets - net changes in fair value		31		(896	)		—

Other comprehensive expense for the year, net of tax				(1,080	)		(36	)

Total comprehensive income for the year				415,595			313,581

Attributable to:
Equity holders of the parent				415,324			312,995
Non-controlling interests		32		271			586

				415,595			313,581

The notes on pages 14 - 41 form part of these financial statements.

Page 7

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Consolidated statement of financial position as at 31 December 2013

31-Dec-13

31-Dec-12

Note

$‘000

ASSETS

Non-current assets

Property, plant and equipment

48,175

43,533

Goodwill

602

840

Other intangible assets

1,069

2,615

Long term receivables

15,000

—

Unquoted equity investments

9,461

8,641

Total non-current assets

74,307

55,629

Current assets

Available-for-sale investments

211,946

—

Inventories

1,580

4,163

Trade and other receivables

134,544

133,926

Short-term deposits

88,859

218,791

Cash and cash equivalents

678,544

599,550

Total current assets

1,115,473

956,430

TOTAL ASSETS

1,189,780

1,012,059

LIABILITIES

Non-current liabilities

Other payables

97,000

197,000

Current liabilities

Trade and other payables

392,460

225,746

Client liabilities

615,316

626,141

Short-term provisions

4,832

3,443

Total current liabilities

1,012,608

855,330

TOTAL LIABILITIES

1,109,608

1,052,330

EQUITY

Share capital

Share premium

3,241

1,655

Other reserves

1,179

Retained earnings

76,269

(43,397

)

Equity attributable to equity holders of the parent

79,658

(40,514

)

Non-controlling interests

514

243

TOTAL EQUITY

80,172

(40,271

)

TOTAL EQUITY AND LIABILITIES

1,189,780

1,012,059

The financial statements were approved by the Board of Directors and authorised for Issue on 21 March 2014. They were signed on its behalf by:

LOGO

P Schapira

The notes on pages 14 - 41 form part of these financial statements.

Page 8

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Company statement of financial position as at 31 December 2013


			31-Dec-13				31-Dec-12
	Note		$‘000		$‘000		$‘000			$‘000
ASSETS
Non-current assets
Property, plant and equipment		15				—					—
Unquoted equity investments		19				—					—

Total non-current assets						—					—
Current assets
Trade and other receivables		22		42				—
Amounts receivable from group companies		23		909,067				607,665
Short-term deposits		24		836				21,621
Cash and cash equivalents		25		10,435				10,977

Total current assets						920,380					640,263

TOTAL ASSETS						920,380					640,263

LIABILITIES
Non-current liabilities
Other payables		26				97,000					197,000
Current liabilities
Trade and other payables		27		270,865				125,098
Amounts payable to group companies		23		486,661				449,561

Total current liabilities						757,526					574,659

TOTAL LIABILITIES						854,526					771,659

EQUITY
Share capital		30		49				49
Share premium		31		3,241				1,655
Other reserves		31		1				1
Retained earnings		31		62,563				(133,101	)

TOTAL EQUITY						65,854					(131,396	)

TOTAL EQUITY AND LIABILITIES						920,380					640,263

In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own income statement.

The financial statements were approved by the Board of Directors and authorised for issue on 21 March 2014. They were signed on its behalf by:

LOGO

P Schapira

The notes on pages 14 - 41 form part of these financial statements.

Page 9

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Consolidated statement of changes in equity for the year ended 31 December 2013


			Share Capital		Share Premium		Other Reserves			Retained Earnings			Attributable to equity holders of the parent			Non- controlling Interests
	Note		$‘000		$‘000		$‘000			$‘000			$‘000			$‘000
Balance at 1 January 2012				49		852		1,215			(356,428	)		(354,312	)		(463	)
Total comprehensive income
Profit for the year				—		—		—			313,031			313,031			586
Other comprehensive income		31		—		—		(36	)		—			(36	)		—

				—		—		(36	)		313,031			312,995			586
Transactions with owners of the parent
Contributions and distributions
Issue of Ordinary Shares		31		—		803		—			—			803			—

				—		803		—			—			803			—
Changes in ownership interests
Purchase of additional shares in subsidiary				—		—		—			—			—			120

				—		—		—			—			—			120

Balance at 31 December 2012				49		1,655		1,179			(43,397	)		(40,514	)		243

Balance at 1 January 2013				49		1,655		1,179			(43,397	)		(40,514	)		243
Total comprehensive income
Profit for the year				—		—		—			416,404			416,404			271
Other comprehensive income		31		—		—		(1,080	)		—			(1,080	)		—

				—		—		(1,080	)		416,404			415,324			271
Transactions with owners of the parent
Contributions and distributions
Dividends paid				—		—		—			(296,738	)		(296,738	)		—
Issue of Ordinary Shares		31		—		1,586		—			—			1,586			—

				—		1,586		—			(296,738	)		(295,152	)		—
Changes in ownership interests
Purchase of additional shares in subsidiary				—		—		—			—			—			—

				—		—		—			—			—			—

Balance at 31 December 2013				49		3,241		99			76,269			79,658			514

The notes on pages 14 - 41 form part of these financial statements.

Page 10

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Company statement of changes in equity for the year ended 31 December 2013


	Share Capital $‘000		Share Premium $‘000		Other Reserves $‘000		Retained Earnings $‘000			Total $‘000
Balance at 1 January 2012		49		852		1		(388,469	)		(387,567	)
Total comprehensive income
Profit for the year		—		—		—		255,368			255,368

		—		—		—		255,368			255,368
Transactions with owners of the parent
Contributions and distributions
Issue of Ordinary Shares		—		803		—		—			803

		—		803		—		—			803

Balance at 31 December 2012		49		1,655		1		(133,101	)		(131,396	)

Balance at 1 January 2013		49		1,655		1		(133,101	)		(131,396	)
Total comprehensive income
Profit for the year		—		—		—		492,402			492,402

		—		—		—		492,402			492,402
Transactions with owners of the parent
Contributions and distributions
Dividends paid		—		—		—		(296,738	)		(296,738	)
Issue of Ordinary Shares		—		1,586		—		—			1,586

		—		1,586		—		(296,738	)		(295,152	)

Balance at 31 December 2013		49		3,241		1		62,563			65,854

The notes on pages 14 - 41 form part of these financial statements.

Page 11

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Consolidated statement of cash flows for the year ended 31 December 2013


			Year ended 31 Dec 2013						Year ended 31 Dec 2012
	Note		$‘000			$‘000			$‘000			$‘000
Cash flows from operating activities
Net profit from ordinary activities							422,008						317,125
Adjustments for:
Dormant accounts recognised as revenue				(42,053	)					—
Interest income received				(365	)					(3,216	)
Effect of foreign exchange rate changes				(3,702	)					(2,550	)
Unrealised foreign exchange gains and losses on operating activities (excluding cash)				3,593						1,086
Impairment of goodwill				238						3,639
Provision for unquoted equity investments				3,558						—
Share based payment expense				1,587						803
Depreciation of property, plant and equipment				8,287						7,232
Amortisation of intangible assets				1,576						2,315
Loss on disposal of property, plant and equipment				14						684

							(27,267	)					9,993

Operating cash flows before movements in working capital and provisions							394,741						327,118
Decrease/(increase) in trade and other receivables				4,684						(29,300	)
Decrease in inventories				2,582						3,403
Decrease in trade and other payables				(83,148	)					(31,920	)
Increase in provisions				1,389						335

Cash used in operations							(74,493	)					(57,482	)
Taxes paid							(3,472	)					(2,432	)

Net cash generated from operating activities							316,776						267,204
Investing activities
Interest income received				365						3,216
Purchases of property, plant and equipment				(13,057	)					(38,660	)
Purchases of intangible assets				(30	)					(6,183	)
Purchase of available for sale financial assets				(212,842	)					—
Investment in companies				—						(8,628	)
(Purchase)/disposal of investments				(4,378	)					5,000
Proceeds on disposal of property, plant and equipment				39						555
Increase in long term receivables				(15,000	)					—
Decrease in short-term deposits				129,932						19,804

Net cash used in investing activities							(114,971	)					(24,896	)
Cash flows from financing activities
Equity dividends paid				(126,513	)					—

Net cash used in financing activities							(126,513	)					—

Net increase in cash and cash equivalents							75,292						242,308
Cash and cash equivalents at the beginning of year							599,550						354,692
Effect of foreign exchange rate changes							3,702						2,550

Cash and cash equivalents at the end of year		25					678,544						599,550

The notes on pages 14 - 41 form part of these financial statements.

Page 12

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Company statement of cash flows for the year ended 31 December 2013


	Note		Year ended 31 Dec 2013						Year ended 31 Dec 2012
			$‘000			$‘000			$‘000			$‘000
Cash flows from operating activities
Net profit from ordinary activities							492,402						255,368
Adjustments for:
Interest income				(1	)					(31	)
Share based payment expense				1,587						803

							1,586						772

Operating cash flows before movements in working capital and provisions							493,988						256,140
Increase in trade and other receivables				(42	)					—
Decrease in trade and other payables				(124,459	)					(231,220	)

Cash utilised in operations							(124,501	)					(231,220	)

Net cash generated from operating activities							369,487						24,920
Investing activities
Interest received				1						31
Decrease/(increase) in short-term deposits				20,785						(799	)

Net cash generated from/(used) in investing activities							20,786						(768	)
Cash flows from financing activities
Increase in amounts receivable from Group companies				(301,402	)					(471,684	)
Increase in amounts payable to Group companies				37,100						445,272
Equity dividends paid				(126,513	)					—

Net cash used in financing activities							(390,815	)					(26,412	)

Net decrease in cash and cash equivalents							(542	)					(2,260	)
Cash and cash equivalents at the beginning of year							10,977						13,237

Cash and cash equivalents at the end of year		25					10,435						10,977

The notes on pages 14 - 41 form part of these financial statements.

Page 13

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013

1	General

Oldford Group Limited (the “Company”) is a limited company which continued in the isle of Man (previously a British Virgin Islands company until 26 November 2013). The Company’s registered office is at Douglas Bay Complex, Kind Edward Road, Onchan, Isle of Man. These consolidated financial statements comprise the Company and its principle subsidiaries (collectively the “Group”). The list of subsidiaries can be found in note 19. The Group is primarily involved as a provider of online poker.

2	Basis of preparation

The financial statements for both the Group and the Company have been prepared in accordance with applicable international Financial Reporting Standards (IFRSs), IFRS Interpretations Committee (IFRIC), interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.

The consolidated financial statements have been prepared under the historical cost basis except for certain financial instruments that are measured at fair values at the end of the each reporting period, as explained in the significant accounting polices below.

3	Functional and presentation currency

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in United States Dollars, which is the Group’s functional and presentation currency.

All amounts have been rounded to the nearest thousand, unless otherwise indicated.

4	Use of judgements and estimates

The preparation of the consolidated financial statements necessitates the use of estimates, assumptions and Judgements that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Although the estimates are based on management’s knowledge and best Judgement information and financial data, the actual outcome may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis.

In the process of applying the Group’s accounting policies, management has made Judgements, assumptions and estimates of information and financial data that have the most significant effect on the amounts recognised in the consolidated financial statements in the following notes:

•

Note 7—dormant accounts: regarding player accounts remaining inactive after the positive balances in dormant accounts have been recognised as revenue;

•

Notes 15 and 17—depreciation and amortisation: regarding the assessment of and changes in useful lives and residual values;

•

Notes 16 and 19—impairment test: regarding the key assumptions underlying recoverable amounts;

•

Notes 19 and 32—consolidation: whether the Group has control over an investee with non-controlling interests;

•

Notes 19, 20 and 35—fair value measurements: regarding the measurement of fair values for both financial and non-financial assets and liabilities; and

•

Notes 19 and 20—available-for-sale investments: regarding classification of financial assets as available-for-sale and the current/non-current split of these financial assets.

•

Note 29—short-term provisions: regarding the measurement of provisions including the key assumptions about the likelihood and magnitude of an outflow of resources.

5	Application of new and revised IFRSs

New and revised IFRSs affecting amounts reported and/or disclosed in the financial statements

In the current year, the Group has applied the following new and revised IFRSs that are mandatorily effective for accounting period that begins on or after 1 January 2013:

(a)

Amendments to IFRS 7 Disclosures—Offsetting Financial Assets and Financial Liabilities

The amendments to IFRS 7 require entities to disclose Information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

As the Group does not have any significant offsetting arrangements in place, the application of the amendments has had no material impact on the disclosures or on the amounts recognised in the consolidated financial statements.

Page 14

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

5	Application of new and revised IFRSs (continued)

New and revised IFRSs affecting amounts reported and/or disclosed in the financial statements (continued)

(b)

New and revised Standards on consolidation, joint arrangements, associates and disclosures

In May 2011, a package of five standards on consolidation, joint arrangements, associates and disclosures was issued comprising IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interest in Other Entities, IAS 27 (revised 2011) Separate Financial Statements and IAS 28 (revised 2011) Investment in Associates and Joint Ventures. Subsequent to the issue of these standards, amendments to IFRS 10, IFRS 11 and IFRS 12 were issued to clarify certain transitional guidance on the first-time application of the standards.

The impact of the application of these standards is set out below:

Impact of the application of IFRS 10

IFRS 10 changes the definition of control such that an investor has control over an investee when a) it has power over the investee, b) it is exposed, or has rights, to variable returns from its involvement with the investee and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In accordance with the transitional provisions of IFRS 10, the Group reassessed the control conclusion for its investees at 1 January 2013 and concluded that there are no changes to control the Group has over its investee. All subsidiaries which were previously consolidated will be continued to be treated as a subsidiary and consolidated with Group results.

Impact of the application of IFRS 11

IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under IFRS 11, there are only two type of joint arrangements – joint operations and joint ventures. The classification of joint arrangements under IFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and when relevant, other facts and circumstances. Previously IAS 31 contemplated three type of arrangements – jointly controlled entitles, jointly controlled operations and Jointly controlled assets. The classification of joint arrangements under IAS 31 was primarily determined based on the legal form of the arrangement.

In accordance with the transitional provisions of IFRS 11, the Group has reassessed the arrangements it has with third parties and concluded that there are no joint arrangements in place. This is consistent with the Group’s assessment in prior year.

Impact of the application of IFRS 12

IFRS 12 is a new disclosure standard and is applicable to entitles that have Interests in subsidiaries, joint arrangements, associates and/or unconsolidated structure entities.

As a result of IFRS 12, the Group has mainly expanded its disclosures about its Interests in subsidiaries (see notes 19 and 32).

Impact of the application of IAS 27 (revised 2011)

IAS 27 (revised 2011) now only deals with the requirements for separate financial statements. Previously IAS 27 also dealt with the requirements for consolidated financial statements which are now dealt with in IFRS 10. The standard requires that when an entity prepares separate financial statements, Investments In subsidiaries, associates, and jointly controlled entitles are accounted for either at cost, or in accordance with IFRS 9 Financial Instruments.

There is no impact to the Company as a result of application of IAS 27 (revised 2011) as Its accounting policies in relation to subsidiaries remain unchanged and are being accounted for at cost.

Impact of the application of IAS 28 (revised 2011)

IAS 28 (revised 2011) supersedes IAS 28 Investment in Associates and prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for Investments in associates and joint ventures.

Page 15

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

5	Application of new and revised IFRSs (continued)

New and revised IFRSs affecting amounts reported and/or disclosed in the financial statements (continued)

Impact of the application of IAS 28 (revised 2011) (continued)

The Group does not have any investments in associates and has also established that there are no joint arrangements in place. As a result the application of IAS 28 (revised 2011) has no impact on the Group.

(c)

IFRS 13 Fair Value Measurements

IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRSs. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7.

As a result of IFRS 13, the Group has included additional disclosures in this regard (see notes 19 and 35). In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively and has not provided any comparative Information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group’s assets and liabilities.

(d)

Amendment to IAS 1 Presentation of Items of Other Comprehensive Income

As a result of the amendments to IAS 1, the Group has modified the presentation of Items of OCI in its statement of profit or loss and OCI, to present separately Items that would be reclassified to profit or loss from those that would never be. Comparative Information has been re-presented accordingly.

(e)

Amendment to IAS 19 Employee Benefits (revised 2011)

IAS 19 (revised 2011) changes the accounting for defined benefit plans and termination benefits.

The Group does not have any defined benefit plans and significant termination benefits. As a result the application of IAS 19 (revised 2011) has no Impact on the Group.

New and revised IFRSs in Issue but not yet effective

At the date of authorisation of these financial statements, there were a number of standards and interpretations that have not been applied in these financial statements, which were in issue but not yet effective. In future periods the following are expected to have an impact on the financial statements:

IFRS 9 — Financial Instruments (effective for accounting periods beginning on or after 1 January 2015).

Amendments to IFRS 10, IFRS 12 and IAS 27—Investment Entities (effective for accounting periods beginning on or after 1 January 2014).

Amendments to IAS 32—Offsetting Financial Asses and Financial Liabilities (effective for accounting periods beginning on or after 1 January 2014).

6	Significant accounting policies

The Group has applied following principal accounting policies in the preparation of the consolidated financial statements:

Basis of consolidation

Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entitles controlled by the Company (Its subsidiaries). Control is achieved when the Company a) has power over the investee; b) is exposed, or has rights, to variable returns from its involvement with the investee; and c) has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of controls listed above.

Page 16

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Subsidiaries (continued)

Subsidiaries are consolidated from the date of acquisition (i.e. the date on which control of the subsidiary effectively commences) to the date of disposal (i.e. the date on which control over the subsidiary effectively ceases). Specifically, Income and expenses of a subsidiary acquired or disposed during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

All Intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Business combinations and related goodwill

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Acquisition related costs are generally recognised in profit or loss as Incurred.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

The excess of the consideration transferred over the fair value of the net identifiable assets, liabilities and contingent liabilities acquired is capitalised as goodwill. Any gain on a bargain purchase is recognised in profit or loss immediately. Goodwill is not amortised but tested for impairment at least annually and upon the occurrence of an indication of impairment. The impairment testing process is described in the appropriate section of these policies.

On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Non-controlling Interests (“NCI”)

NCI are measured at their proportionate share of the acquiree’s Identifiable net assets from acquisition date.

Changes in the Group’s ownership interest in existing subsidiaries

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and NCI are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the NCI are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity, Any resulting gain or loss is recognised in profit or loss and is calculated as the difference between (I) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (II) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any NCI. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Foreign currency

Foreign currency transactions

In preparing the financial statements of the individual group entitles, transactions in currencies other than the entity’s functional currency (foreign currencies) are translated at the spot foreign exchange rate at the date of the transaction.

At the end of each reporting period, monetary Items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences arising on the retranslation of monetary assets and liabilities are recognised Immediately in the profit or loss.

Page 17

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Foreign currency (continued)

Foreign currency transactions (continued)

Non-monetary Items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Foreign operations

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)

assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement;

(ii)

Income and expenses for each income statement are translated at spot exchange rates (unless this spot is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(iii)

all resulting exchange differences are recognised in statement of comprehensive income and accumulated in the translation reserve, except to the extent that the translation difference is allocated to NCI.

When a foreign operation is disposed of in its entirety or partially such that control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI.

Revenue recognition

Revenue is measured at the fair value of the consideration derived. Revenue is only recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.

Internet gaming and tournament fees

Revenue from internet gaming is recognised in the accounting periods in which the gaming transactions occur. Revenue is recognised with reference to the underlying arrangements and agreements with the players.

Player deposit fees and conversion margins

Revenue from customer cross currency deposits and withdrawals is recognised when the transaction is complete. Revenue is recognised with reference to the underlying arrangements and agreements with the players.

Interest and Investment Income

Interest Income is accrued on a time basis, with reference to the principal amount and the applicable effective Interest rate. Dividend Income is recognised in profit or loss on the date that the Group’s right to receive payment is established.

Rental Income

Refer to accounting policy notes on leased assets below.

Employee benefits

Short-term employee benefits

Short-term employee benefits (which also include payroll costs) are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plan

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Page 18

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Employee benefits (continued)

Share-based payment transactions

The Group has applied the requirements of IFRS 2 Share-based payments. The Group issues equity settled share-based payments to certain employees.

Equity settled share based payments are measured at fair value at the date of the grant. Fair value is measured by use of a suitable pricing model. The grant-date fair value of equity settled share-based payment granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards factoring in any vesting conditions.

Dividends payable

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors and paid to the shareholders. In the case of final dividends, this is when approved by the shareholders at the Annual General Meeting.

Income tax

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or other comprehensive income.

Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates that have been enacted or substantively enacted by the year end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computations of taxable profits.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each year end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, using tax rates enacted or substantively enacted at the year end date.

Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an Item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss at the date of disposal.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Page 19

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Property, plant and equipment (continued)

Depreciation

Depreciation is calculated to write off the cost, less estimated residual values, of property, plant and equipment (except land), using the straight-line method over their expected useful lives. Land is not depreciated.

It is calculated at the following rates:


Freehold Property		4% per annum
IT Equipment, Servers and Software		33% per annum
Office Furniture and Equipment		20% per annum
Office Alterations		20% per annum
Motor Vehicles		20% per annum
Event and Poker Room		20% per annum

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted as appropriate.

Intangible assets

Recognition and measurement

Intangible assets with finite useful lives that are acquired separately from a business are carried at cost less accumulated amortisation and any accumulated Impairment losses.

Intangible assets acquired as part of a business combination are capitalised separately from goodwill if the fair value can be measured reliably on initial recognition (which is regarded as its cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Any gain or loss on disposal of an intangible asset is recognised in profit or loss at the date of disposal.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates.

Amortisation

Amortisation is calculated to write off the cost or valuation, less estimated residual values, of intangible assets, using the straight-line method over their estimated useful lives.

It is calculated at the following rates:


Customer lists		50% per annum
Domain names		50% per annum

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted as appropriate.

Impairment of tangible and Intangible assets

At each year end date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised immediately in profit or loss for the amount by which the asset’s carrying amount exceeds its recoverable amount.

Leased assets

All of the Group leasing arrangements are considered to be operating leases.

The Group as lessee

Rentals payable are charged to profit or loss on a straight line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

Page 20

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

The Group as lessor

Rental income is credited to profit or loss on a straight line basis over the term of the relevant lease. Lease incentives granted are recognised as an integral part of the total rental income on a straight line basis over the lease term.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any identified impairment losses at the end of each reporting period.

Investments in unquoted equity investments

Investments in unquoted equity investments are stated at cost (or fair value) less any identified impairment losses at the end of each reporting period.

Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less costs necessary to make the sale.

Trade and other receivables

Trade and other receivables are stated at their amortised cost less impairment losses and doubtful accounts.

Short-term deposits

Short-term deposits comprise deposits held at call with banks with maturities of more than three months.

Cash and cash equivalents

Cash and cash equivalents comprises cash in hand, deposits held on call with banks, other short-term highly liquid investments that are readily convertible to known amounts of cash. They include unrestricted short-term bank deposits originally purchased with maturities of three months or less.

Trade and other payables

Trade and other payables are not interest bearing and are stated at their nominal value.

Client liabilities

Client liabilities are amounts deposited by players and are stated at their nominal value.

Provisions

Provisions are recognised when the Group has present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where time value is long term and material, the amount of the related provision is calculated by discounting the expected future cash flows at a pre-tax rate that reflects market assessments of the time value of money and, any risks specific to the liability.

Financial Instruments

Recognition, derecognition and offsetting

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the Instrument.

The Group derecognises financial assets when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Page 21

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Financial Instruments (continued)

Measurement

Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. The classification depends on the nature and purpose of the financial assets and financial liabilities and is determined at the time of initial recognition.

Financial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, are recognised in profit or loss.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method less any impairment.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method less any impairment.

Available-for-sale (“APS”) financial assets

AFS financial assets are non-derivatives that are either designated as AFS or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses are recognised in other comprehensive income and accumulated in the fair value reserve. When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified impairment losses at the end of each reporting period.

Financial liabilities at fair value through profit or loss

A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial liabilities at fair value through profit or loss are measured at fair value and changes therein, are recognised in profit or loss.

Other financial liabilities

Other financial liabilities are non-derivative financial liabilities initially recognised at fair values less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

Impairment of non-derivative financial assets

Non-derivative financial assets not classified as fair value through profit or loss, including an interest in an equity-accounted investee, are assessed at each reporting date to determine whether there is objective evidence of impairment.

Financial assets measured at amortised cost

For financial assets measured at amortised cost, the Group considers evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for impairment by grouping together assets with similar risk characteristics. In assessing collective impairment, the Group uses historical information on the timing of recovering and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

Page 22

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

6	Significant accounting policies (continued)

Financial instruments (continued)

Financial assets measured at amortised cost (continued)

An impairment loss is calculated as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off.

Available-for-sale financial assets

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any Impairment loss previously recognised in profit or loss.

7	Dormant accounts

The Group Introduced a dormant account (i.e. player account which has been inactive for a period of twelve months consecutively) policy during the year after obtaining approval from the Regulators. Positive balances in dormant accounts recognised as revenue totalled $42,053k during the year. Although this is a change in accounting policy, it was not considered to be so significant that a prior year adjustment was required, had the policy been applied retrospectively, the amounts recognised in revenue in earlier years would have totalled $22,426k.

8	Profit from operations


	Year ended		Year ended
	31 Dec 2013		31 Dec 2012
This is arrived at after charging:	$‘000		$‘000
Distribution Costs
Customer acquisition and retention		179,423		157,917
Affiliates		32,746		43,163
Other customer bonuses and frequent player points		1,467		5,466
Bad debts and provisions		4,620		3,626
Web hosting and technical support		45,900		36,443
Gaming licence fee		3,884		2,440

Administration Costs		268,040		249,055

Processor costs		63,657		56,457
Payroll and associated costs		190,496		166,036
General and administrative costs (excluding depreciation and audit fees)		76,818		82,080
Amortisation		1,576		2,315
Depreciation		8,287		7,232
Impairment of goodwill		238		3,639
Gaming duty		93,349		89,288
Loss on disposal of fixed assets		14		684
Auditors remuneration for audit services		571		320
Auditors remuneration for other services		331		145

		435,337		408,196

Page 23

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

9	Particulars of employees


	Year ended		Year ended
	31 Dec 2013		31 Dec 2012
Number of staff employed by the Group at year end totalled:	No.		No.
Directors		2		2
Operations and Customer Support		882		840
Administration and Marketing		610		510

		1,494		1,352

The aggregate payroll costs of the above were:


	$‘000		$‘000
Salaries		137,584		115,509
Social security costs		15,435		11,849
Pension cost		4,937		4,112
Equity-settled share-based payments (note 34)		1,587		803

		159,543		132,273

10	Directors’ emoluments


	Year ended	Year ended
	31 Dec 2013	31 Dec 2012
	$‘000	$‘000
The directors’ aggregate emoluments in respect of qualifying services were as follows:
During 2013 two executive directors were employed (2012: two)
Emoluments receivable (including benefits)	1,510	1,108

Emoluments of highest paid director:	1,510	1,108

Emoluments receivable (including benefits)	930	900

11	Operating lease arrangements

The Group as lessee

The Group leases a number of offices under operating leases. The lease periods range from 2 to 15 years with options to renew after that date. Lease payments are also renegotiated regularly in accordance with lease agreements to reflect market rentals.

At the year end date, the Group had outstanding commitments for future minimum lease payments, which fall due as follows:


	Year ended		Year ended
	31 Dec 2013		31 Dec 2012
	$‘000		$‘000
Within one year		8,445		7,366
Within two to five years		24,005		18,245
In more than five years		41,574		49,919

		74,024		75,530

The lease payments recognised as rental expenses in profit or loss for the year were $9,336k (2012; $10,539k).

The Group as lessor

The Group leases out part of the property it owns. The lease period is for 15 years with options to renew after that date. Lease payments are renegotiated every 3 years to reflect market rentals.

Page 24

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

11	Operating lease arrangements (continued)

The Group as lessor (continued)

At the year end date, the Group had outstanding commitments for future minimum lease receivables, which fall due as follows:


	Year ended 31 Dec 2013		Year ended 31 Dec 2012
	$‘000		$‘000
Within one year		2,411		2,375
Within two to five years		10,255		9,856
In more than five years		22,485		24,765

		35,151		36,996

The lease income recognised as rental income in profit or loss for the year was $2,295k (2012: $1,844k).

12	Net Investment losses


	Year ended			Year ended
	31 Dec 2013			31 Dec 2012
	$‘000			$‘000
Interest on short-term deposits		592			817
Dividend Income		625			127
Market value adjustments		654			482
Loss on sale or transfer of investments		(1,160	)		(4,663	)
Investment provisions		(3,558	)		—
Investment write offs		(4,063	)		—

		(6,910	)		(3,237	)

13	Net finance (costs)/income


	Year ended			Year ended
	31 Dec 2013			31 Dec 2012
	$‘000			$‘000
Interest on bank balances and deposits		365			3,216
Realised foreign exchange gains and losses on operating activities (excluding cash)
Unrealised foreign exchange gains and losses on operating activities		(1,596	)		(3,506	)
(excluding cash)		(3,593	)		(1,086	)
Unrealised foreign exchange gains and losses on cash and cash equivalents		3,702			2,550

		(1,122	)		1,174

14	Income taxes


	Year ended			Year ended
	31 Dec 2013			31 Dec 2012
	$‘000			$‘000
Amounts recognised in income Statement
Current tax expense
Current year		(4,652	)		(3,159	)
Adjustment for prior years		(797	)		8

		(5,449	)		(3,151	)

Deferred tax expense
Current year		(1,057	)		(357	)
Adjustment for prior years		1,173			—

		116			(357	)

Total tax expense for the year		(5,333	)		(3,508	)

Page 25

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

14	Income taxes (continued)

The Group’s main operations are carried on in the isle of Man which during the year benefited from a zero per cent tax regime. Tax has been provided at the appropriate rates in those other jurisdictions where group subsidiaries are based.

Effective tax rate

The Group’s principal activities are conducted from the isle of Man, where the tax rate is nil (2012: nil). The Group incurs tax expense in other jurisdictions, principally in Malta, the UK, Ireland, Australia and Costa Rica. The overall underlying tax rate for the Group is considered to be 1.3% per calculation below:


	Year ended			Year ended
	31 Dec 2013			31 Dec 2012
	$‘000			$‘000
Profit before tax		422,008			317,125
Tax expense		5,333			3,508

Effective tax rate for the year		1.3	%		1.1	%

15	Property, plant and equipment (Group)


	Freehold Property		IT Equipment, Servers & Software			Office Furniture & Equipment			Office Alterations			Motor Vehicles			Event & Poker Room			Total
	$‘000		$‘000			$‘000			$‘000			$‘000			$‘000			$‘000
Cost or valuation
At 1 January 2012		—		26,288			4,522			6,505			575			49			37,939
Additions		31,278		2,829			459			4,076			18			—			38,660
Acquisitions		—		146			1,080			—			—			—			1,226
Disposals		—		(1,334	)		(839	)		(1,721	)		(399	)		(38	)		(4,331	)
Foreign currency transl		—		71			66			13			6			—			156

At 1 January 2013		31,278		28,000			5,288			8,873			200			11			73,650
Additions		31		11,344			338			698			—			646			13,057
Acquisitions/reclassifications		—		(29	)		29			—			—			—			—
Disposals		—		—			(159	)		(6	)		(23	)		—			(188	)
Foreign currency transl		—		(337	)		(221	)		(265	)		—			—			(823	)

At 31 December 2013		31,309		38,978			5,275			9,300			177			657			85,696

Accumulated depreciation
At 1 January 2012		—		19,036			2,570			2,969			380			27			24,982
Acquisitions/reclassifications		—		80			807			—			—			—			887
Disposals		—		(1,113	)		(597	)		(1,126	)		(230	)		(26	)		(3,092	)
Charge for the year		969		4,135			934			1,155			29			10			7,232
Foreign currency transl		—		72			33			2			1			—			108

At 1 January 2013		969		22,210			3,747			3,000			180			11			30,117
Acquisitions / reclassifications		—		—			—			—			—			—			—
Disposals		—		—			(122	)		(5	)		(8	)		—			(135	)
Charge for the year		1,143		5,261			563			1,230			4			86			8,287
Foreign currency transl		—		(324	)		(212	)		(212	)		—			—			(748	)

At 31 December 2013		2,112		27,147			3,976			4,013			176			97			37,521

Carrying amount
At 31 December 2013		29,197		11,831			1,299			5,287			1			560			48,175

At 31 December 2012		30,309		5,790			1,541			5,873			20			—			43,533

Page 26

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

15	Property, plant and equipment (Company)


	Servers
	$‘000
Cost or valuation
At 1 January 2012, 1 January 2013 and 31 December 2013		1,929

Accumulated depreciation
At 1 January 2012, 1 January 2013 and 31 December 2013		1,929

Carrying amount
At 31 December 2012 and 31 December 2013		—

16	Goodwill (Group)


	Goodwill
	$‘000
Cost or valuation
At 1 January 2012		7,661
Additions		3,399

At 1 January 2013		11,060
Additions		—

At 31 December 2013		11,060

Impairment
At 1 January 2012		6,581
Charge for the year		3,639

At 1 January 2013		10,220
Charge for the year		238

At 31 December 2013		10,458

Carrying amount
At 31 December 2013		602

At 31 December 2012		840

The goodwill at year end primarily relates to a poker room licence held by one of the Group’s subsidiary companies. In accordance with IAS 36 and the Group’s stated accounting policy, an annual impairment review was carried out by comparing the carrying amount of goodwill against the recoverable amount. The recoverable amount was based on fair value less cost of disposal of the poker room licence (as this was considered to be significantly higher than value in use), The fair value was estimated with reference to current replacement cost i.e. costs that would be incurred in obtaining this licence from the relevant authority. The carrying amount was adjusted at year end accordingly.

17	Other Intangible assets (Group)


	Customer lists $‘000		Domain names $‘000		Total $‘000
Cost or valuation
At 1 January 2012		2,970		2,942		5,912
Additions		—		2,784		2,784

At 1 January 2013		2,970		5,726		8,696
Additions		—		30		30

At 31 December 2013		2,970		5,756		8,726

Page 27

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

17	Other intangible assets (Group) (continued)


	Customer		Domain
	lists $‘000		names $‘000		Total $‘000
Amortisation
At 1 January 2012		2,482		1,284		3,766
Charge for the year		488		1,827		2,315

At 1 January 2013		2,970		3,111		6,081
Charge for the year		—		1,576		1,576

At 31 December 2013		2,970		4,687		7,657

Carrying amount
At 31 December 2013		—		1,069		1,069

At 31 December 2012		—		2,615		2,615

No impairment indicators were identified in relation to other intangible assets. The other intangible assets are being amortised over their estimated useful economic lives as detailed in the significant accounting policies section.

18	Long term receivables

Group

Company

31 Dec 2013

31 Dec 2012

31 Dec 2013

31 Dec 2012

$‘000

Other receivables

15,000

—

19	Unquoted equity investments (Group)


	Unquoted equity
	investments
Cost	$‘000
(which approximates fair value)
At 1 January 2012		5,013
Additions		8,628
Disposals		(5,000	)

At 1 January 2013		8,641
Additions		4,378
Provision against investments		(3,558	)
Disposals		—

At 31 December 2013		9,461

The principal unquoted equity investments of the Group are as follows:


Name	Holding	Country of Incorporation	Principal Activity
Hippodrome Casino Limited	5%	UK	Operator of land based casino
Stack Evantos Esportivos SA	10%	Brazil	Operator of the brand “Brazilian Series of Poker”
Gambling Management SA	5%	Belgium	Operator of land based casino

Page 28

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

19	Unquoted equity Investments (Group) (continued)

Acquisitions

On 15 May 2013 the Group Invested further 2.5% in Gambling Management SA, thus increasing its total share holdings from 2.5% to 5%.

Due to economic crisis in the Eurozone, the Bank of Cyprus was balled-in in accordance with the Bailing-in of Bank of Cyprus Public Company Limited Dearee of 2013 whereby affected customer deposits were converted into Bank of Cyprus Class A shares at a nominal value of EUR 1 per share. The Group was also affected by this bailing-in as a result of holding deposit balances with the bank and was issued 2,764,854 shares at EUR 1,00 each (USD equivalent: 3,555,878). The shares in Bank of Cyprus were suspended for trading as a result of the bailing-in. These investments are currently being carried at their nominal value of EUR 1.00 per share.

Investment provisions

A full provision has been made against Bank of Cyprus investments due to significant uncertainty regarding the value of these investments. The bank is currently undergoing a restructuring exercise and the shares remain suspended. As a result it is not possible for the Group to measure the fair value of the Class A shares reliably.


Investments in subsidiaries (Company)	31 Dec 2013		31 Dec 2012
Investments in subsidiaries (Company)	$		$
Cost & carrying amount
Investments in subsidiaries		197		217

The principal subsidiaries of Oldford Group Limited, all of which have been included in these consolidated financial statements, are as follows:


Name	Holding	Country of Incorporation	Principal Activity
Asia Pacific Poker Tour Limited	100%	Isle of Man	Organises & markets APPT event
Euro Poker Tour Limited	100%	England	Organises & markets EPT event
Global Poker Tours Limited	100%	Isle of Man	Tour Management
Latin America Poker Tour Limited	100%	Isle of Man	Organises & markets LAPT event
Halfords Media (Italy) S.r.l.	100%	Italy	Services - marketing and customer support
Halfords Media (UK)	100%	England	Services - marketing and customer support
Halfords Media (IOM)	100%	Isle of Man	Services - marketing and customer related
Halfords Media (France) SAS	100%	France	Services - marketing and customer related
Kawa Productions SAS	100%	France	Media production services
GP Information Services Pty Limited	100%	Australia	Customer services
Cayden Limited	100%	Isle of Man	Payment processing
Rational Entertainment Enterprises Limited	100%	Isle of Man	Operates PokerStars.com business
Rational Poker School Limited	100%	Isle of Man	Owns website for training players
Rational Services Limited	100%	Isle of Man	Services - varied
REEL Italy Limited	100%	Malta	Operates PokerStars .it business
REEL Malta Limited	100%	Malta	Operates PokerStars .fr business
REEL Estonia Limited	100%	Isle of Man	Operates PokerStars.ee business
REEL Europe Limited	100%	Malta	Operates PokerStars .be business
REEL Spaln Pic	100%	Malta	Operates PokerStars .es business
Rational FT Enterprises Limited	100%	Isle of Man	Operates fulltiltpoker.com business
Rational FT Enterprises (Malta) Limited	100%	Malta	Operates fulltiltpoker.eu business
Rational FT Licensed Funds Limited	100%	Isle of Man	Holds Full Tilt player funds
Rational FT Holdings Limited	100%	Isle of Man	Holding company for RFT group
Rational FT Holdings (Malta) Limited	100%	Malta	Maltese holding company for RFT Maltese/Irish subgroup

Page 29

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

19	Investments in subsidiaries (Company) (continued)


Name	Holding		Country of Incorporation	Principal Activity
Rational FT Payments Limited		100%	Isle of Man	Payment processing
Rational FT Poker School (IOM)		100%	Isle of Man	Owns website for training players
Rational FT Services (Ireland) Limited		100%	Ireland	Services - marketing, customer support and IT
Rational FT Services Limited		100%	Isle of Man	Support service company for Full Tilt group
Rational FT Treasury Limited		100%	Isle of Man	Treasury company
Halfords Denmark ApS		100%	Denmark	Tax representative in Denmark
Halfords Media Spain, SL		100%	Spain	Tax representative in Spain
IPT Services Sri		51%	Italy	Italian live room Joint venture
Mainsail Holdings Limited		100%	Jersey	Holds Skandia House
REEL Denmark Limited		100%	Isle of Man	Operates PokerStars.dk (Danish) business
Rational Group Limited		100%	Isle of Man	Holding company
Rational Networks Limited		100%	Malta	Holds PokerStars.eu (Maltese) Class 4 platform licence
Rational Resources Limited		100%	Malta	Holding company

20	Available-for-sale Investments


	Group				Company
	31 Dec 2013		31 Dec 2012		31 Dec 2013		31 Dec 2012
	$‘000		$‘000		$‘000		$‘000
Available-for-sale financial assets Include the following:
Fixed Interest bonds		143,878		—		—		—
Funds		66,620		—		—		—
Equities		1,448		—		—		—

		211,946		—		—		—

21	Inventories


	Group						Company
	31 Dec 2013			31 Dec 2012			31 Dec 2013		31 Dec 2012
	$‘000			$‘000			$‘000		$‘000
Finished goods		2,080			4,445			—		—
Provision against slow moving goods		(500	)		(282	)		—		—

		1,580			4,163			—		—

22	Trade and other receivables

The directors consider the carrying amount of trade and other receivables approximate to their fair value, which is based on an estimate of the recoverable amount.

Included within other receivables are funded commitments of $7,247k (2012; $4,700k) with the local Regulator as part of the licencing requirements and contracts with third parties.

Page 30

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

22	Trade and other receivables (continued)


	Group				Company
	31 Dec 2013		31 Dec 2012		31 Dec 2013		31 Dec 2012
	$‘000		$‘000		$‘000		$‘000
Trade receivables		54,960		67,254		—		—
Prepayments		18,265		18,644		—		—
Other receivables		57,192		47,917		42		—
Tax refunds		3,451		—		—		—
Deferred tax assets		676		111		—		—

		134,544		133,926		42		—

23	Amounts receivable from / (payable to) group companies


	Company
	31 Dec 2013			31 Dec 2012
	$‘000			$‘000
Amounts receivable from subsidiaries		909,067			607,665
Amounts payable to subsidiaries		(486,661	)		(449,561	)

Net receivable from group companies		422,406			158,104

24	Short-term deposits

Group

Company

31 Dec 2013

31 Dec 2012

31 Dec 2013

31 Dec 2012

$‘000

Cash on deposit for more than three months

88,859

218,791

836

21,621

Included within short-term deposits is a total commitment of $4,500k (2012: $14,260k) with the local Regulator as part of the licencing requirement. The Group is required to maintain these commitments in cash or deposits with the financial Institutions agreed with the Regulator.

25	Cash and cash equivalents

Group

Company

31 Dec 2013

31 Dec 2012

31 Dec 2013

31 Dec 2012

$‘000

Cash at bank and in hand

678,544

599,550

10,435

10,977

Included within cash and cash equivalents is a total commitment of $2,100k (2012: $ 1,350k) with the local Regulators as part of the licencing requirements. The Group is required to maintain these commitments in cash or deposits with the financial Institutions agreed with the Regulators.

26	Other payables due in more than 1 year

Group

Company

31 Dec 2013

31 Dec 2012

31 Dec 2013

31 Dec 2012

$‘000

Other payables

97,000

197,000

97,000

197,000

Page 31

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

27	Trade and other payables


	Group				Company
	31 Dec 2013		31 Dec 2012		31 Dec 2013		31 Dec 2012
	$‘000		$‘000		$‘000		$‘000
Dividends payable		170,225		—		170,225		—
Trade payables		7,377		6,130		—		—
Current tax liabilities		6,882		1,325		—		—
Other taxes and social security		701		1,479		—		—
Deferred tax liabilities		787		467		—		—
Other payables		206,488		216,345		100,640		125,098

		392,460		225,746		270,865		125,098

Trade and other payables comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for trade purchases is 27 days (2012:25 days). The carrying amount of trade and other payables approximate their fair value which is based on an estimate of the amount required to settle outstanding obligations.

28	Client liabilities


	Group					Company
	31 Dec 2013			31 Dec 2012		31 Dec 2013		31 Dec 2012
	$‘000			$‘000		$‘000		$‘000
Client liabilities		657,369			626,141		—		—
Dormant accounts recognised as revenue		(42,053	)		—		—		—

		615,316			626,141		—		—

Dormant accounts (player accounts which have been inactive for a period of twelve months consecutively) are recognised as revenue.

Client liabilities comprises of sums due to customers including net deposits received, undrawn winnings and tournament prize pools for tournaments that have yet to commence. This liability is matched by funds and investments held by the Group on behalf of the customers, which is included in the total of available-for-sale investments, short-term deposits and cash and cash equivalents as disclosed in notes 20,24 and 25 respectively.

29	Short-term provisions


	Group				Company
	2013		2012		2013		2012
	$‘000		$‘000		$‘000		$‘000
Player bonuses and rebates
At 1 January		3,443		3,108		—		—
Movement in period		1,389		335		—		—

At 31 December		4,832		3,443		—		—

Short-term provisions relate to player bonus and rebates scheme which is run by the Group. Player bonuses and rebates are due when certain milestones are reached by players. Provision for player bonuses and rebates are estimated by the monitoring level of players’ activities on the Group’s website, scheme levels or milestones achieved by the players and bonuses and rebates redeemed by the players up to year end.

Page 32

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

30	Share capital

Authorised share capital and significant terms and conditions

The total authorised number of shares comprises 1,000,000,000 (2012:1,000,000,000) ordinary shares with a par value of $0.00005 (2012: $0.00005). All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at meetings of the company.


	Group and Company
Allotted, called up and fully paid	Number			$
At 1 January 2012		984,874,929			49,245
Issued during the period		2,812,573			141

At 31 December 2012		987,687,502			49,386

At 1 January 2013		987,687,502			49,386
Cancellation of treasury shares		(10,035,000	)		(502	)
Issued during the period		1,549,322			77

At 31 December 2013		979,201,824			48,961

31	Reserves


	Capital Redemption		Translation Reserve			AFS Reserve			Share Premium		Retained Earnings
Group	$‘000		$‘000			$‘000			$‘000		$‘000
At 1 January 2012		1		1,214			—			852		(356,428	)
Profit for the period		—		—			—			—		313,031
Premium arising on issue of equity shares		—		—			—			803		—
Foreign currency translation		—		(36	)		—			—		—

At 31 December 2012		1		1,178			—			1,655		(43,397	)

At 1 January 2013		1		1,178			—			1,655		(43,397	)
Profit for the period		—		—			—			—		416,404
Dividends paid		—		—			—			—		(296,738	)
Premium arising on issue of equity shares		—		—			—			1,586		—
Foreign currency translation		—		(184	)		—			—		—
Available-for-sale financial assets—net changes in fair value		—		—			(896	)		—		—

At 31 December 2013		1		994			(896	)		3,241		76,269


	Capital Redemption		Share Premium		Retained Earnings
Company	$‘000		$‘000		$‘000
At 1 January 2012		1		852		(388,469	)
Profit for the period		—		—		255,368
Premium arising on issue of equity shares		—		803		—

At 31 December 2012		1		1,655		(133,101	)

Page 33

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

31	Reserves (continued)

Company (continued)


	Capital Redemption		Share Premium		Retained Earnings
	$‘000		$‘000		$‘000
At 1 January 2013		1		1,655		(133,101	)
Profit for the period		—		—		492,402
Dividends paid		—		—		(296,738	)
Premium arising on issue of equity shares		—		1,586		—

At 31 December 2013		1		3,241		62,563

Nature and purpose of reserves

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

AFS reserve

AFS reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the assets are derecognised or impaired.

32	Non-controlling Interests


	$‘000
At 1 January 2012		(463	)
Share of profit for the year		586
Purchase of additional shares in subsidiary		120

At 1 January 2013		243
Share of profit for the year		271
Purchase of additional shares in subsidiary		—

At 31 December 2013		514

The Group controls its non-controlling interest as it has power over the investees; it is exposed, and has rights to, variable returns from its involvement with the investees and has the ability to use its power to affect its returns.

33	Dividends


					Year ended		Year ended
					31 Dec 2013		31 Dec 2012
					$‘000		$‘000
Amounts recognised as distributions to equity holders in the year:
Interim ordinary dividends		2013		2012
Per Share	$	0.30	$	0.00		296,738		—

34	Share-based payments

The Company has a share-based bonus scheme and nil-cost share options for certain individuals within the Group. The award of shares is entirely at the discretion of the directors. The shares are awarded as bonuses for services rendered or as a sign-on incentive.

The shares and nil-cost share options awarded during the year have been measured at fair value and an appropriate amount has been recognised in the results for the year. The fair value has been calculated using a projected earnings basis taking into account the company’s dividend policy and agreed with relevant tax authorities.

1.75M nil cost options were awarded to employees of the Group during the year. The accounting cost to the company would be based on the value of the nil cost option spread over the five year life of the option.

As a result of the number of shares and share options awarded during the year, and the fair value of the company, a total expense of $1,587k (2012: $803k) has been recognised in the Company’s profit and loss account.

Page 34

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management

The Group and Company are exposed through its day to day operations to risks that arise from use of its financial instruments. The main financial instruments used by the Group and Company, on which financial risk arises, are as follows:

•

Long term receivables;

•

Unquoted equity investments (Group);

•

Available-for-sale investments;

•

Trade and other receivables (excluding deferred tax and prepayments);

•

Short-term deposits;

•

Long term other payables;

•

Cash and cash equivalents;

•

Trade and other payables (excluding deferred tax and current tax);

•

Client liabilities; and

•

Short-term provisions.

Categories of financial instruments

The table below summarises the Group’s financial instruments by category and their respective carrying amounts:


		2013		2012
Financial instruments	Category	$‘000		$‘000
Financial assets
Long term receivables	Loans and receivables		15,000		—
Unquoted equity investment (Group)	Available-for-sale		9,461		9,461
Available-for-sale investments	Available-for-sale		211,946		—
Trade and other receivables (excluding deferred tax and prepayments)	Loans and receivables		112,152		115,171
Short-term deposits	Loans and receivables		88,859		218,791
Cash and cash equivalents	Loans and receivables		678,544		599,550

			1,115,962		942,973

Financial liabilities
Long term other payables	Other financial liabilities		97,000		197,000
Trade and other payables (excluding deferred tax and current tax)	Other financial liabilities		384,791		223,954
Client liabilities	Other financial liabilities		657,369		626,141
Short-term provisions	Other financial liabilities		4,832		3,443

			1,143,992		1,050,538

The Group and Company have exposure to the following risks arising from financial instruments:

•

Credit risk;

•

Liquidity risk; and

•

Market risk.

Risk management framework

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Group and Company’s risk management framework. The Group and Company’s risk management policies are established to identify and analyse the risks faced by the Group and Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group and Company’s activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

Credit risk

Credit risk is the risk of financial loss to the Group or Company if a customer or counterparty to a financial instrument falls to meet its contractual obligations. The Group and Company’s principal financial assets that are subject to credit risk are long-term receivables, available-for-sale investments, trade and other receivables (excluding deferred tax and prepayments), short-term deposits and cash and cash equivalents.

Page 35

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management (continued)

Credit risk (continued)

The carrying amount of these financial assets represents the maximum credit exposure.

Trade and other receivables

The Group and Company’s credit risk relating to trade and other receivables is primarily attributable to receivables from payment service providers and from customers, who chargeback deposits made, after playing on the Group’s website.

The Group and Company closely monitors the credit quality, financial health and operational economic environment of the payment service providers, where possible, to ensure that it is only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. This information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information and its own trading history to rate its major payment service providers.

The risk arising from customers consist of a large number of customers spread across diverse industries and geographical areas i.e. limited concentration risk. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, appropriate credit provisions are made or third parties appointed to collect the debt on behalf of the Group and Company.

Long term receivables

The Board analyses the credit risk for each of the new long term receivables before advancing funds. The financial health and its operating and financial performance are then regularly reviewed and monitored by the Board.

Available-for-sale Investments

The Group has adopted a policy on available-for-sale investments whereby investments are allowed only in assets which are tolerant and within the parameters agreed between the Group’s treasury and investment managers. The placements are made via counter parties that have a credit rating equal to or better than the Group.

Short-term deposits and cash and cash equivalents

The Group and Company have adopted a policy on short-term deposits and cash and cash equivalents whereby placements are allowed only in liquid securities and with counterparties that have a credit rating equal to or better than the Group.

Liquidity risk

Liquidity risk is the risk that the Group or Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Group and Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group and Company aim to maintain the level of its available-for-sale investments, short-term deposits and cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group also forecasts cash flows by matching the maturity profiles of financial assets and liabilities.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts presented are undiscounted.


	Long term other payables		Trade & other payables (excl. deferred tax & current tax)		Client liabilities		Short-term provisions		Total
31 December 2013	$‘000		$‘000		$‘000		$‘000		$‘000
On demand		—		11		657,369		4,832		662,212
In 3 months		—		281,732		—		—		281,732
Between 3 months and 1 year		—		9,343		—		—		9,343
More than 1 year		97,000		101,374		—		—		198,374

		97,000		392,460		657,369		4,832		1,151,661

Page 36

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management (continued)

Liquidity risk (continued)


	Long term other payables		Trade & other payables (excl. deferred tax & current tax)		Client liabilities		Short- term provisions		Total
31 December 2012	$‘000		$‘000		$‘000		$‘000		$‘000
On demand		—		—		626,141		3,443		629,584
In 3 months		—		96,843		—		—		96,843
Between 3 months and 1 year		—		3,099		—		—		3,099
More than 1 year		197,000		125,804		—		—		322,804

		197,000		225,746		626,141		3,443		1,052,330

Capital management

The Group and Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The capital structure of the Group and Company consist mainly equity of the Group (comprising issued capital, reserves, retained earnings and non-controlling interests per notes 30,31 and 32). The Group does not have any significant external debt or borrowings.

The Group and Company are not subject to any externally imposed share capital requirements.

Market risk

Market risk is the risk that changes in market prices will affect the Group or Company’s income or the value of its holdings of financial instruments. The Group and Company’s exposure mainly relates to foreign currency balances and fair market value of its unquoted equity investments. Interest rate risk is not considered to be significant to the Group or Company and as a result no further analysis regarding this has been presented below.

Foreign currency risk

The Group and Company’s financial risk arising from exchange rate fluctuations is mainly attributed to:

•

Mismatch between balance sheet liabilities to customers which is predominantly denominated in US Dollars (USD) and the net receipts from customers which are settled in the currency of the customer’s choice, of which Euros (EUR) and Sterling (GBP) are significant.

•

Mismatch between reported revenue which is mainly generated in USD (the Group and Company’s functional and reporting currency) and significant portion of deposits which are settled in local currencies.

•

Expenses, the majority of which are denominated in foreign currencies including Euros (EUR) and Sterling (GBP).

The Group and Company continually monitor the foreign currency risks and takes steps, where practical, to ensure that the net exposure is kept to an acceptable level. Foreign currencies are bought or sold at spot rates when necessary to address the short-term imbalances.

The table below details the Group’s exposure to currency risks at year end reporting dates:


	EUR		GBP		Other		Total
31 December 2013	$‘000		$‘000		$‘000		$‘000
*Financial assets*
Available-for-sale Investments		8,248		—		—		8,248
Unquoted equity investment (Group)		2,186		7,275		—		9,461
Long term receivables		—		—		—		—
Trade and other receivables (excluding deferred tax and prepayments)		35,845		13,937		15,809		65,591
Short-term deposits		34,156		—		—		34,156
Cash and cash equivalents		85,848		11,319		17,053		114,220

		166,283		32,531		32,862		231,676

Page 37

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management (continued)

Foreign currency risk (continued)


31 December 2013	EUR $‘000		GBP $‘000		Other $‘000		Total $‘000
Financial liabilities
Long term other payables		—		—		—		—
Trade and other payables (excluding deferred tax and current tax)		23,107		16,748		4,376		44,231
Client liabilities		111,613		6,243		1,778		119,634
Short-term provisions		434		—		—		434

		135,154		22,991		6,154		164,299

Net exposure		31,129		9,540		26,708		67,377


	EUR		GBP		Other		Total
31 December 2012	$‘000		$‘000		$‘000		$‘000
Financial assets
Available-for-sale investments		—		—		.		.
Unquoted equity investment (Group)		1,366		7,275		—		8,641
Long term receivables		—		—		—		—
Trade and other receivables (excluding deferred tax and prepayments)		57,236		15,424		20,638		93,298
Short-term deposits		9,238		1,625		22		10,885
Cash and cash equivalents		101,910		10,471		12,873		125,254

		169,750		34,795		33,533		238,078


31 December 2012
Financial liabilities
Long term other payables		—		—		—		—
Trade and other payables (excluding deferred tax and current tax)		20,590		16,079		4,600		41,269
Client liabilities		98,256		4,167		1,770		104,193
Short-term provisions		834		—		—		834

		119,680		20,246		6,370		146,296

Net exposure		50,070		14,549		27,163		91,782

Sensitivity analysis

The table below details the effect on profit before tax of a 10% strengthening (and weakening) in the US Dollar exchange rate at the balance sheet date for balance sheet Items denominated in Euros and Sterling as noted above:


	31 December 2013						31 December 2012
	EUR			GBP			EUR			GBP
	$‘000			$‘000			$‘000			$‘000
10% strengthening		(3,113	)		(954	)		(5,007	)		(1,455	)
10% weakening		3,113			954			5,007			1,455

Fair value measurements

This note provides information about how the Group determines fair values of various financial assets and financial liabilities and how it manages the risks arising due to changes to market price (or fair values) of financial assets and financial liabilities.

Page 38

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management (continued)

Fair value measurements (continued)

In accordance with IFRS 13 Fair Value Measurements when measuring the fair value of an asset or a liability, the Group and Company uses market observable data as far as practically possible. Fair values are categorised into different levels in a fair value hierarchy based on the Inputs in the valuation techniques as follows:

•

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

•

Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e. as a prices) or indirectly (i.e. derived form prices)

•

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis

The Group’s unquoted equity investments are categorised as available-for-sale financial assets and as a result are measured at fair value (both at initial recognition and subsequent measurement). The fair value of these unquoted equity investments, hierarchy level, valuation techniques and inputs used can be noted as follows:


Fair value disclosures:
Fair value at 31 December 2013:		$9,461k (2012: $8,641k)
Fair value hierarchy:		Level 3;

Valuation technique used:		Given the unique nature of the investees’ business, there are no readily available market data as these types of investments are generally structured through private companies and confidential. As a result the Group has adopted income approach for valuing these investments, taking into account current and expected income from the investees over long-term.

Significant unobservable inputs:		Long-term revenue growth rates and pre-tax operating margins taking into account management’s experience and knowledge of market conditions of the specific industries.

Relationship of unobservable inputs to fair value:		The higher the revenue growth rates and pre-tax operating margins, the higher the fair value and vice versa.

The Group has classified certain financial assets as avallable-for-sale investments (see note 20) and as a result are measured at fair value (both at initial recognition and subsequent measurement). The fair value of these available-for-sale investments, hierarchy level, valuation techniques and inputs used can be noted as follows:


Fair value at 31 December 2013:		$211,946k (2012: Nil)
Fair value hierarchy:		Level 1;
Valuation technique used:		Quoted prices in an active market.
Significant unobservable inputs:		N/A
Relationship of unobservable inputs to fair value:		N/A

The fair value movements of unquoted equity investments from 2012 to 2013 were insignificant. As a result separate reconciliation of Level 3 fair values has not been presented.

Fair value of the Group and Company’s financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosures are required)

The fair value of the Group and Company’s financial assets and financial liabilities that are not measured at fair value on a recurring basis reasonably approximate the carrying amounts currently disclosed on the respective notes in these consolidated financial statements. As a result no further fair value disclosures were considered necessary by the Group or Company.

There were no transfers between Level 1 and 2 during the year.

Page 39

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

35	Financial risk management (continued)

Fair value risk management

The Group and Company are exposed to equity price risk on its unquoted equity securities. Management monitors the performance of its investees on a regular basis by reviewing periodic financial and operational information of the investees to ensure that fair value of its investments are being sustained and investment returns are being generated in the long-term. All buy and sell decisions are discussed and approved by the Board.

36	Related parties

Ultimate controlling party

At 31 December 2013 the Group was controlled by the Palcolex Trust Management AG and PalcolexTrust Company (BVI) Limited by virtue of its 75% shareholding in the Group.

Transactions with key management personnel

Key management are those individuals who the directors believe have significant authority and responsibility for planning, directing and controlling the activities of the Group. The aggregate short-term and long-term benefits, as well as share-based payments of the directors and key management of the Group are set out below:


	2013		2012
Year ended 31 December	$‘000		$‘000
Short-term benefits		4,877		3,030
Share-based payments		124		44

Certain directors and key management were granted share awards and options under service contracts as disclosed in note 34.

Transactions with related parties—Directors

Remuneration and benefits payable to directors during the year are disclosed in note 10.

During the year dividends totalling $264,032k (2012: $nil) were paid to the order of the directors.

During the year, P Schapira purchased a security holding from a subsidiary of the Group for its market value of $1,960k.

Transactions with related parties-Group

Transaction between the Group companies have been eliminated on consolidation and are not disclosed in this note.

Transactions with related parties—Company

The balance outstanding with Group companies as at year end were as follows:


	31 Dec 2013		31 Dec 2012
	$‘000		$‘000
Amounts receivable from its subsidiaries		422,406		158,104

Transactions with related parties-Other

During the year, the Group entered into the following transactions with other related parties:

PYR Software, a company incorporated in Canada, provided contract software and development services to the Group in the year. Oldford Group Limited has a cost plus agreement with PYR based on reasonable market practice. During the year $28,843k (2012: $22,185k) was paid to PYR Software for these services. The outstanding balance receivable from PYR at year end was $867k (2012: payable of $252k).

Page 40

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the year ended 31 December 2013

Notes forming part of the consolidated financial statements for the year ended 31 December 2013 (continued)

37	Contingent liabilities

Legal and regulatory developments

As part of the Board’s on going regulatory compliance and operational risk assessment process, the Board continues to monitor legal and regulatory developments, and their potential impact on the business, and continues to take appropriate advice in respect of these developments. No additional provisions have been made with regards to legal and regulatory developments.

Income Tax

The Group operates in numerous jurisdictions. Accordingly, the Group is filing tax returns, providing for and paying all taxes and duties it believes are due based on local tax laws, transfer pricing arrangements and tax advice obtained. The Group is periodically subject to audits and assessments by local taxing authorities. The Board is unable to quantify reliably any exposure for additional taxes, if any, that may arise from the final settlement of such assessments. Accordingly no additional provisions have been made.

VAT Group

The Company is jointly and severally liable for all Value Added Tax (VAT) debts of the VAT group registration of which it is a part, relating to the period that it has been a member of the VAT group. The Group is periodically subject to audits and assessments by local taxing authorities. The Board is unable to quantify reliably any exposure for additional indirect taxes, if any, that may arise from the final settlement of such assessments. Accordingly no additional provisions have been made.

Page 41

SCHEDULE “B”

UNAUDITED FINANCIAL STATEMENTS OF OLDFORD GROUP FOR THE PERIOD

ENDED JUNE 30, 2014

OLDFORD GROUP LIMITED

Annual Report and Consolidated Financial Statements

Half-Year Ended 30 June 2014

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Consolidated income statement for the half-year ended 30 June 2014


	Note		Half-year ended 30 June 2014 $‘000			Half-year ended 30 June 2013 $‘000
Revenue				567,864			545,892
Distribution costs		1		(125,243	)		(133,518	)
Administration costs		1		(220,615	)		(209,764	)

Profit from operations				222,006			202,610
Net investment gains/(losses)		2		1,053			(7,930	)
Net finance (costs)/income		3		(1,817	)		(2,998	)

Profit before tax				221,242			191,682
Income tax expense		4		(2,826	)		(1,825	)

Profit for the period				218,416			189,857

Attributable to:
Equity holders of the parent				218,187			189,857
Non-controlling interests		18		229			—

				218,416			189,857

The notes on pages 6 - 11 form part of these financial statements.

Page 1

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Consolidated statement of comprehensive income for the half-year ended 30 June 2014


	Note		Half-year ended 30 June 2014 $‘000			Half-year ended 30 June 2013 $‘000
Profit for the period				218,416			189,857
Other comprehensive income
Items that will be reclassified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations		17		(49	)		(184	)
Available for sale financial assets - net changes in fair value		17		5,616			(896	)

Other comprehensive expense for the period, net of tax				5,567			(1,080	)

Total comprehensive income for the period				223,983			188,777

Attributable to:
Equity holders of the parent				223,754			188,777
Non-controlling interests		18		229			—

				223,983			188,777


The notes on pages 6 - 11 form part of these financial statements.

Page 2

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Consolidated statement of financial position as at 30 June 2014

30-Jun-14

31-Dec-13

Note

$‘000

$‘000

ASSETS

Non-current assets

Property, plant and equipment

48,718

48,175

Goodwill

482

602

Other intangible assets

373

1,069

Long term receivables

15,000

15,000

Unquoted equity investments

9,461

9,461

Total non-current assets

74,034

74,307

Current assets

Available-for-sale investments

292,975

211,946

Inventories

883

1,580

Trade and other receivables

128,069

134,544

Short-term deposits

60,147

88,859

Cash and cash equivalents

566,641

678,544

Total current assets

1,048,715

1,115,473

TOTAL ASSETS

1,122,749

1,189,780

LIABILITIES

Non-current liabilities

Other payables

97,000

97,000

Current liabilities

Trade and other payables

232,428

392,460

Client liabilities

606,095

615,316

Short-term provisions

18,764

4,832

Total current liabilities

857,287

1,012,608

TOTAL LIABILITIES

954,287

1,109,608

EQUITY

Share capital

Share premium

3,241

3,241

Other reserves

5,666

Retained earnings

158,763

76,269

Equity attributable to equity holders of the parent

167,719

79,658

Non-controlling interests

743

514

TOTAL EQUITY

168,462

80,172

TOTAL EQUITY AND LIABILITIES

1,122,749

1,189,780


The notes on pages 6 - 11 form part of these financial statements.

Page 3

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Consolidated statement of changes in equity for the half-year ended 30 June 2014


	Note		Share Capital $‘000		Share Premium $‘000		Other Reserves $‘000			Retained Earnings $‘000			Attributa- ble to equity holders of the parent $‘000			Non- controlling Interests $‘000
Balance at 1 January 2013				49		1,655		1,179			(43,397	)		(40,514	)		243
Total comprehensive income
Profit for the year				—		—		—			416,404			416,404			271
Other comprehensive income		17		—		—		(1,080	)		—			(1,080	)		—

				—		—		(1,080	)		416,404			415,324			271
Transactions with owners of the parent
Contributions and distributions
Dividends paid				—		—		—			(296,738	)		(296,738	)		—
Issue of Ordinary Shares		17		—		1,586		—			—			1,586			—

				—		1,586		—			(296,738	)		(295,152	)		—
Changes in ownership interests
Purchase of additional shares in subsidiary				—		—		—			—			—			—

				—		—		—			—			—			—

Balance at 30 June 2013				49		3,241		99			76,269			79,658			514

Balance at 1 January 2014				49		3,241		99			76,269			79,658			514
Total comprehensive income
Profit for the year				—		—		—			218,187			218,187			229
Other comprehensive income		17		—		—		5,567			—			5,567			—

				—		—		5,567			218,187			223,754			229
Transactions with owners of the parent
Contributions and distributions
Dividends paid				—		—		—			(135,693	)		(135,693	)		—
Issue of Ordinary Shares		17		—		—		—			—			—			—

				—		—		—			(135,693	)		(135,693	)		—
Changes in ownership interests
Share repurchase											—			—			—
Purchase of additional shares in subsidiary				—		—		—			—			—			—

				—		—		—			—			—			—

Balance at 30 June 2014				49		3,241		5,666			158,763			167,719			743


The notes on pages 6 - 11 form part of these financial statements.

Page 4

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Consolidated statement of cash flows for the half-year ended 30 June 2014


			Half-Year ended 30 June						Half-Year ended 30 June 2013
	Note		$‘000			$‘000			$‘000			$‘000
Cash flows from operating activities
Net profit from ordinary activities							221,242						191,682
Adjustments for:
Dormant accounts recognised as revenue				(3,925	)					—
Interest income received				(333	)					397
Effect of foreign exchange rate changes				1,220						2,710
Unrealised foreign exchange gains and losses on operating				(482	)					(391	)
Impairment of goodwill				120						120
Depreciation of property, plant and equipment				4,262						3,439
Amortisation of intangible assets				693						796
Loss on disposal of property, plant and equipment				2						1

							1,557						7,072

Operating cash flows before movements in working capital and provisions							222,799						198,754
Decrease in trade and other receivables				6,737						15,373
Decrease in inventories				697						932
Increase/(decrease) in trade and other payables				7,992						(15,084	)
Increase in provisions				13,932						10,673

Cash used in operations							29,358						11,894
Taxes paid							(5,750	)					(3,641	)

Net cash generated from operating activities							246,407						207,007
Investing activities
Interest income received				333						(397	)
Purchases of property, plant and equipment				(4,807	)					(4,444	)
Purchases of intangible assets				3						—
Purchase of available for sale financial assets				(75,413	)					(127,304	)
(Purchase)/disposal of investments				—						(3,586	)
Decrease in short-term deposits				28,712						82,445

Net cash used in investing activities							(51,172	)					(53,286	)
Cash flows from financing activities
Equity dividends paid				(305,918	)					—

Net cash used in financing activities							(305,918	)					—

Net (decrease)/increase in cash and cash equivalents							(110,683	)					153,721
Cash and cash equivalents at the beginning of year							678,544						599,550
Effect of foreign exchange rate changes							(1,220	)					(2,710	)

Cash and cash equivalents at the end of year		25					566,641						750,561


The notes on pages 6 - 11 form part of these financial statements.

Page 5

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014

1	Profit from operations


	Half-year ended		Half-year ended
	30 June 2014		30 June 2013
	$‘000		$‘000
This is arrived at after charging:
Distribution Costs
Customer acquisition and retention		78,703		87,573
Affiliates		16,479		19,152
Other customer bonuses and frequent player points		480		1,186
Bad debts and provisions		1,279		2,409
Web hosting and technical support		26,103		21,481
Gaming licence fee		2,199		1,717

		125,243		133,518

Administration Costs
Processor costs		33,931		31,632
Payroll and associated costs		104,377		89,873
General and administrative costs (excluding depreciation and audit fees)		26,565		36,899
Amortisation		693		796
Depreciation		4,264		3,439
Impairment of good will		120		120
Gaming duty		50,079		46,415
Loss on disposal of fixed assets		2		1
Auditors remuneration for audit services		584		589

		220,615		209,764

2	Net investment gains/(losses)


	Half-year ended		Half-year ended
	30 June 2014		30 June 2013
	$‘000		$‘000
Interest on short-term deposits		299		397
Dividend income		25		34
Market value adjustments		729		199
Loss on sale or transfer of investments		—		(5	)
Investment provisions		—		(4,492	)
Investment write offs		—		(4,063	)

		1,053		(7,930	)

3	Net finance (costs)/income


	Half-year ended			Half-year ended
	30 June 2014			30 June 2013
	$‘000			$‘000
Interest on bank balances and deposits		333			(397	)
Realised foreign exchange gains and losses on operating activities		(1,412	)		(282	)
Unrealised foreign exchange gains and losses on operating activities		482			391
Unrealised foreign exchange gains and losses on cash and cash equivalents		(1,220	)		(2,710	)

		(1,817	)		(2,998	)


The notes on pages 14 - 41 form part of these financial statements.

Page 6

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014

4	Income taxes


	Half-year ended			Half-year ended
	30 June 2014			30 June 2013
Amounts recognised in Income Statement	$‘000			$‘000
Current tax expense
Current year		(2,614	)		(2,878	)
Adjustment for prior years		(212	)		1,053

		(2,826	)		(1,825	)

The Group’s main operations are carried on in the Isle of Man which during the year benefited from a zero per cent tax regime. Tax has been

Effective tax rate

The Group’s principal activities are conducted from the Isle of Man, where the tax rate is nil (2013: nil). The Group incurs tax expense in other


	Half-year ended			Year ended
	30 June 2014			30 June 2013
	$‘000			$‘000
Profit before tax		221,242			191,682
Tax expense		2,826			1,825

Effective tax rate for the year		1.3	%		1.0	%

5	Property, plant and equipment (Group)


			IT
			Equipment,			Office
	Freehold		Servers &			Furniture &			Office			Motor			Event &
	Property		Software			Equipment			Alterations			Vehicles			Poker Room		Total
	$‘000		$‘000			$‘000			$‘000			$‘000			$‘000		$‘000
*Cost or valuation*
At 1 January 2013		31,278		28,000			5,288			8,873			200			11		73,650
Additions		31		11,344			338			698			—			646		13,057
Acquisitions		—		(29	)		29			—			—			—		—
Disposals		—		—			(159	)		(6	)		(23	)		—		(188	)
Foreign currency transl		—		(337	)		(221	)		(265	)		—			—		(823	)

At 1 January 2014		31,309		38,978			5,275			9,300			177			657		85,696
Additions		—		3,164			379			1,103			—			161		4,807

At 30 June 2014		31,309		42,142			5,654			10,403			177			818		90,503

*Accumulated depreciation*
At 1 January 2013		969		22,210			3,747			3,000			180			11		30,117
Disposals		—		—			(122	)		(5	)		(8	)		—		(135	)
Charge for the year		1,143		5,261			563			1,230			4			86		8,287
Foreign currency transl		—		(324	)		(212	)		(212	)		—			—		(748	)

At 1 January 2014		2,112		27,147			3,976			4,013			176			97		37,521
Charge for the year		618		2,631			268			665			—			82		4,264

At 30 June 2014		2,730		29,778			4,244			4,678			176			179		41,785

*Carrying amount*
At 30 June 2014		28,579		12,364			1,410			5,725			1			639		48,718

At 31 December 2013		29,197		11,831			1,299			5,287			1			560		48,175


Page 7

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014 (continued)

6	Goodwill (Group)


	Goodwill
	$‘000
*Cost or valuation*
At 1 January 2013		11,060
Additions		—

At 1 January 2014		11,060
Additions		—

At 30 June 2014		11,060

*Impairment*
At 1 January 2013		10,220
Charge for the year		238

At 1 January 2014		10,458
Charge for the period		120

At 30 June 2014		10,578

*Carrying amount*
At 30 June 2014		482

At 31 December 2013		602

The goodwill at year end primarily relates to a poker room licence held by one of the Group’s subsidiary companies. In accordance with IAS 36

7	Other intangible assets (Group)

Customer

Domain

lists

names

Total

$‘000

Cost or valuation

At 1 January 2013

2,970

5,726

8,696

Additions

—

At 1 January 2014

2,970

5,756

8,726

Additions

—

120

At 30 June 2014

2,970

5,876

8,846

Customer

Domain

lists

names

Total

$‘000

Amortisation

At 1 January 2013

2,970

3,111

6,081

Charge for the year

—

1,576

At 1 January 2014

2,970

4,687

7,657

Additions

123

Charge for the year

—

693

At 30 June 2014

2,970

5,503

8,473

Carrying amount

At 30 June 2014

—

373

At 31 December 2013

—

1,069

No impairment indicators were identified in relation to other intangible assets. The other intangible assets are being amortised over their


Page 8

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014 (continued)

8	Long term receivables


	30 June 2014		31 Dec 2013
	$‘000		$‘000
Other receivables		15,000		15,000

9	Unquoted equity investments (Group)


	Unquoted equity investments
Cost (which approximates fair value)	$‘000
At 1 January 2013		8,641
Additions		4,378
Disposals		(3,558	)

At 1 January 2014		9,461
Additions		—
Provision against investments		—
Disposals		—

At 30 June 2014		9,461

The principal unquoted equity investments of the Group are as follows:


Name	Holding		Country of incorporation	Principal Activity
Hippodrome Casino Limited		5%	UK	Operator of land based casino
Stack Evantos Esportivos SA		10%	Brazil	Operator of the brand “Brazilian Series of Poker”
Gambling Management SA		5%	Belgium	Operator of land based casino

10	Inventories


	30 June 2014			31 Dec 2013
	$‘000			$‘000
Finished goods		1,413			2,080
Provision against slow moving goods		(530	)		(500	)

		883			1,580

11	Trade and other receivables


	30 June 2014		31 Dec 2013
	$‘000		$‘000
Trade receivables		49,059		54,960
Prepayments		17,352		18,265
Other receivables		57,410		57,192
Tax refunds		3,570		3,451
Deferred tax assets		678		676

		128,069		134,544

12	Other payables due in more than 1 year


	30 June 2014		31 Dec 2013
	$‘000		$‘000
Other payables		97,000		97,000


Page 9

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014 (continued)

13	Trade and other payables


	30 June 2014		31 Dec 2013
	$‘000		$‘000
Dividends payable		—		170,225
Trade payables		2,598		7,377
Current tax liabilities		4,079		6,882
Other taxes and social security		725		701
Deferred tax liabilities		787		787
Other payables		224,239		206,488

		232,428		392,460

14	Client liabilities


	30 June 2014			31 Dec 2013
	$‘000			$‘000
Client liabilities		610,020			657,369
Dormant accounts recognised as revenue		(3,925	)		(42,053	)

		606,095			615,316

15	Short-term provisions


	30 June 2014		31 Dec 2013
	$‘000		$‘000
Player bonuses and rebates
At 1 January		4,832		3,443
Movement in period		13,932		1,389

At 31 December		18,764		4,832

Short-term provisions relate to player bonus and rebates scheme which is run by the Group. Player bonuses and rebates are due when certain

16	Share capital

Authorised share capital and significant terms and conditions

The total authorised number of shares comprises 1,000,000,000 (2013:1,000,000,000) ordinary shares with a par value of $0.00005 (2013:


Allotted, called up and fully paid	Number		$
At 1 January 2013		987,687,502		49,386
Issued during the period		1,549,322		77

At 31 December 2013		989,236,824		49,463

At 1 January 2014		989,236,824		49,463
Cancellation of treasury shares		—		—
Issued during the period		—		—

At 30 June 2014		989,236,824		49,463


Page 10

OLDFORD GROUP LIMITED

Annual report and consolidated financial statements for the half-year ended 30 June 2014

Notes forming part of the consolidated financial statements for the half-year ended 30 June 2014 (continued)

17	Reserves


	Capital		Translation			AFS			Share		Retained
	Redemption		Reserve			Reserve			Premium		Earnings
	$‘000		$‘000			$‘000			$‘000		$‘000
At 1 January 2013		1		1,178			—			1,655		(43,397	)
Profit for the period		—		—			—			—		416,404
Dividends paid		—		—			—			—		(296,738	)
Premium arising on issue of equity shares		—		—			—			1,586		—
Foreign currency translation		—		(184	)		—			—		—
Available-for-sale financial assets - net changes in fair value		—		—			(896	)		—		—

Balance at 31 December 2013		1		994			(896	)		3,241		76,269

Balance at 1 January 2014		1		994			(896	)		3,241		76,269
Profit for the period		—		—			—			—		218,187
Dividends paid		—		—			—			—		(135,693	)
Premium arising on issue of equity shares		—		—			—			—		—
Share buyback		—		—			—			—		—
Foreign currency translation		—		(49	)		—			—		—
Available-for-sale financial assets - net changes in fair value		—		—			5,616			—		—

Balance at 30 June 2014		1		945			4,720			3,241		158,763

18	Non-controlling interests


	$‘000
At 1 July 2013		514
Share of profit for the year
Purchase of additional shares in subsidiary		—

At 1 January 2014		514
Share of profit for the year		229
Purchase of additional shares in subsidiary		—

At 30 June 2014		743

The Group controls its non-controlling interest as it has power over the investees; it is exposed, and has rights to, variable returns from its


Page 11

SCHEDULE “C”

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL

POSITION OF THE CORPORATION AS AT JUNE 30, 2014

- and -

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE

INCOME OF THE CORPORATION FOR THE PERIOD ENDED JUNE 30, 2014

- and -

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE

INCOME OF THE CORPORATION FOR THE YEAR ENDED DECEMBER 31, 2013

See attached.

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Financial Position

As at December 31, 2013

$‘000

(unaudited)


	Amaya		Oldford		Adjustments			Notes			Pro Forma
Assets
Current
Cash and cash equivalents		93,640		721,699		(238,982	)		2	(b)		576,358
Short-term deposits and available for sale investments		10,582		329,999								340,581
Income tax and investment tax credits receivable		3,305		—								3,305
Prepaid expenses and deposits		4,173		—								4,173
Accounts receivable		47,460		159,055								206,515
Assets classified as held for sale		38,369		—								38,369
Inventories		7,595		1,680								9,275

		205,124		1,212,434		(238,982	)					1,178,576
Restricted cash		131										131
Acquisition-related intangibles and Goodwill		142,048		640		5,139,190			2	(c)		5,281,878
Intangible assets and Goodwill		20,989		1,137								22,126
Property and equipment		40,521		51,239								91,760
Deferred development costs		3,818										3,818
Receivable under finance lease		14,869										14,869
Deferred income Taxes		13,331										13,331

		440,831		1,265,450		4,900,208						6,606,489

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Financial Position

As at December 31, 2013

$‘000

(unaudited)


	Amaya			Oldford		Adjustments			Notes			Pro Forma
Liabilities
Current
Accounts payable and accrued liabilities		27,477			520,590								548,067
Provisions		5,232			5,139								10,371
Income taxes payable		1,763											1,763
Liabilities classified as held for sale		4,638											4,638
User funds held on deposit		4,453			654,450								658,903

		43,563			1,180,179								1,223,742
Long-term debt		195,186					2,997,747			2	(d)		3,192,933
Deferred purchase price							425,440			2	(e)		425,440
Equipment financing		1,684											1,684
Deferred revenue		249											249
Deferred income Taxes		5,802											5,802

		246,484			1,180,179		3,423,187						4,849,850

Shareholders’ equity
Share Capital		220,683			52		1,595,874			2	(f)		1,816,609
Contributed surplus		4,214			3,552		263,109			2	(g)		270,875
Accumulated other comprehensive income		8,838			4,042		(4,042	)					8,838
Retained Earnings (Deficit)		(39,388	)		77,625		(377,920	)					(339,694	)

		194,347			85,271		1,477,021						1,756,639

		440,831			1,265,450		4,900,208						6,606,490

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Financial Position

As at June 30, 2014

$‘000

(unaudited)


	Amaya		Oldford		Adjustments			Notes			Pro Forma
Assets
Current
Cash and cash equivalents		228,021		917,210		(132,184	)		4	(b)		1,013,047
Short-term deposits and available for sale investments		73,670		74,272								147,942
Income tax and investment tax credits receivable		4,557										4,557
Prepaid expenses and deposits		7,275										7,275
Accounts receivable		51,136		152,655								203,791
Assets classified as held for sale		35,799										35,799
Inventories		9,788		942								10,730

		410,246		1,145,079		(132,184	)					1,423,141
Restricted cash		130										130
Acquisition-related Intangibles and Goodwill		162,630				5,061,413			4	(c)		5,224,043
Intangible assets and Goodwill		22,683		912								23,595
Property and equipment		44,305		51,982								96,287
Deferred development costs		5,012										5,012
Receivable under finance lease		13,374										13,374
Deferred income Taxes		20,566										20,566
Promissory Note		10,000										10,000

		688,946		1,197,973		4,929,228						6,816,148

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Financial Position

As at June 30, 2014

$‘000

(unaudited)


	Amaya			Oldford		Adjustments			Notes			Pro Forma
Liabilities
Current
Accounts payable and accrued liabilities		35,872			351,500								387,372
Provisions		10,621			20,021								30,642
Income taxes payable		1,539											1,539
Liabilities classified as held for sale		3,290											3,290
User funds held on deposit		4,303			646,703								651,006

		55,625			1,018,224		—						1,073,849
Long-term debt		369,069					3,012,731			4	(d)		3,381,800
Deferred purchase price		1,482					426,800			4	(e)		428,282
Equipment financing		2,537											2,537
Deferred revenue		7,469											7,469
Deferred income Taxes		5,344											5,344

		441,526			1,018,224		3,439,531						4,899,281

Shareholders’ equity
Share Capital		223,390			52		1,560,358			4	(f)		1,783,800
Contributed surplus		20,087			10,297		256,365			4	(g)		286,748
Accumulated other comprehensive income		6,582			2,458		(2,458	)					6,582
Retained Earnings (Deficit)		(2,639	)		166,942		(324,566	)					(160,263	)

		247,420			179,749		1,489,698						1,916,867

		688,946			1,197,973		4,929,229						6,816,149

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Comprehensive Income

Six months ended June 30, 2014

$‘000

(unaudited)


	Amaya			Oldford		Adjustments			Notes			Pro Forma
Revenue		83,654			622,833		—						706,487

Expenses
Cost of Products		5,768			—								5,768
Selling		7,541			137,367								144,908
G&A		78,118			241,971								320,089
Financial		9,951			1,993		104,979			5	(a)		116,923
Acquisition-related costs		9,804			—		18,465			5	(b)		28,269

		111,182			381,330		123,444						615,956

Non-Recurring Items		55,439			1,155								56,594
Net earnings (loss) before income taxes		27,911			242,658		(123,444	)					147,126
Income taxes		(8,837	)		3,100								(5,737	)

Net earnings (loss)		36,748			239,559		(123,444	)					152,863

Other Comprehensive Income (loss), net of tax
Foreign currency translation		(2,255	)		2,458		—						203

		(2,255	)		2,458		—						203

Total Comprehensive Income (loss)		34,493			242,017		(123,444	)					153,066

Basic earnings per common share										5	(c)		1.18

Diluted earnings per common share										5	(c)		0.75

AMAYA GAMING GROUP INC.

Pro Forma Consolidated Statement of Comprehensive Income

Year ended December 31, 2013

$‘000

(unaudited)


	Amaya			Oldford			Adjustments			Notes			Pro Forma
Revenue		154,529			1,167,306			—						1,321,835

Expenses
Cost of Products		5,980			—									5,980
Selling		14,590			276,054									290,644
G&A		132,585			448,354									580,939
Financial		21,071			1,156			212,503			3	(a)		234,730
Acquisition-related costs		1,332			—			18,406			3	(b)		19,738

		175,558			725,564			230,909						1,132,030

Non-recurring items		1,502			(7,117	)								(5,615	)
Net earnings (loss) before income taxes		(19,527	)		434,626			(230,909	)					184,190
Income taxes		9,646			5,492									15,138

Net earnings (loss)		(29,173	)		429,134			(230,909	)					169,052

Other Comprehensive Income (loss), net of tax
Foreign currency translation		9,673			4,042			—						13,715

		9,673			4,042			—						13,715

Total Comprehensive Income (loss)		(19,500	)		433,175			(230,909	)					182,766
Basic earnings per common share											3	(c)		1.42

Diluted earnings per common share											3	(c)		0.90

1.	Basis of Presentation

(All figures are in Canadian dollars unless otherwise indicated)

The accompanying unaudited pro forma consolidated statements of financial position of Amaya Gaming Group Inc. (“Amaya”) as at December 31, 2013 and June 30, 2014 and the unaudited pro forma consolidated statement of comprehensive income for the year ended December 31, 2013 and for the six months ended June 30, 2014 (the “pro forma statements”) have been prepared to reflect the cash offer by one of Amaya’s wholly-owned subsidiaries for the acquisition of the Oldford Group Limited (“Oldford”).

The unaudited pro forma statements have been prepared by management in accordance with International Financial Reporting Standards. The pro forma statements may not be indicative of the results that actually would have occurred if the events reflected therein had been in effect on the dates indicated or of the results which may be obtained in the future. In preparing these pro forma financial statements, no adjustments have been made to reflect operating synergies and administrative cost savings that could result from the operations of the combined assets.

Accounting policies used in the preparation of the pro forma statements are in accordance with those disclosed in Amaya’s audited consolidated financial statements as at and for the year ended December 31, 2013 and for six months ended June 30, 2014. The pro forma statements have been prepared from information derived from and should be read in conjunction with the following:

Amaya’s audited financial statements as at and for the year ended December 31, 2013; Oldford’s audited financial statements as at and for the year ended December 31, 2013; Amaya’s unaudited financial statements as at and for the six month period ended June 30, 2014; Oldford’s unaudited financial statements as at and for the six month period ended June 30, 2014.

In the opinion of management, the pro forma statements include all the necessary adjustments for a fair presentation of the ongoing entity in accordance with International Financial Reporting Standards.

2.	Pro forma consolidated statements of financial position assumptions and adjustments as at December 31, 2013

The unaudited pro forma consolidated statements of financial position gives effect to the following assumptions and adjustments as if they had occurred on January 1, 2013:

(a)	Acquisition of Oldford:

The following summarizes the estimated fair value of Oldford’s assets and liabilities assumed by Amaya at the date of acquisition:


Net assets acquired	$‘000
Cash and cash equivalents		721,699
Short-term deposits and available for sale investments		329,999
Accounts receivable		159,055
Inventories		1,680
Acquisition-related Intangibles and Goodwill		5,140,967
Property and equipment		51,239
Accounts payable and accrued liabilities		(520,590	)
Provisions		(5,139	)
User funds held on deposit		(654,450	)

Total Consideration		5,224,461


Consideration for the acquisition	$‘000
Upfront Purchase Price		4,799,021
Deferred Purchase Price		425,440

		5,224,461

The purchase price allocation has been determined from information available to the management of Amaya at this time and incorporates and reflects management’s preliminary assessment of the exchange value and net assets acquired. The allocation of the purchase price to the assets and liabilities of Oldford will be finalized once the fair values of the assets and liabilities have been determined, and accordingly, the above purchase price allocation will change.

(b)	Cash and cash equivalents


	$‘000
Proceeds from Issuance of Common Shares		699,681
Proceeds from Issuance of Convertible Preferred Shares		1,139,356
Issuance of Senior Secured First and Second Lien Term Facility		2,997,820
Proceeds from the issuance of mezzanine debt and an incremental term loan facility		186,481
Upfront Purchase Consideration		-4,799,021
Payment of fees incurred in connection with the acquisition of Oldford		-244,406
Interest paid on long-term debt		-194,871
Repayment of principal		-24,022

Total adjustment to cash and cash equivalents		-238,982

Cash consideration of approximately $244,406,000 was used to pay fees incurred in connection with the financing and the acquisition of Oldford.

Principal repayments and interest paid on long-term debt amount to approximately $24,022,000 and $194,871,000 respectively for the year ended December 31, 2013.

Proceeds from issuance of mezzanine debt and an incremental term loan facility amount to approximately $186,481,000.

(c)	Acquisition-related intangibles and goodwill


	$‘000
Management’s preliminary estimate of acquisition-related intangibles and Goodwill with respect to Oldford transaction		5,139,190

Total adjustment to Acquisition-related Intangibles and Goodwill		5,139,190

The purchase price allocation for the Oldford transaction has been determined from information available to the management of Amaya at this time and incorporates and reflects management’s preliminary assessment of the exchange value and net assets acquired. The allocation of the purchase price to the assets and liabilities of Oldford will be finalized once the final fair values of the assets and liabilities have been determined, and accordingly, the above estimates of acquisition-related intangibles and Goodwill will change.

(d)	Long term debt


	$‘000
Issuance of long-term debt		3,184,301
Related Transaction costs		-129,102
Interest accretion and PIK Interest on long-term debt		17,632
Repayment of principal		-24,022
Value of common share purchase warrants issued in connection with mezzanine debt financing re-allocated to Contributed Surplus		-51,062

Total adjustment to Long-term debt		2,997,747

Proceeds of $3,184,301,000 from the issuance of long-term debt were used to finance the acquisition of Oldford. $24,022,000 of principal and $129,102,000 of transaction costs were paid during the period from January 1, 2013 to December 31, 2013. PIK Interest and accretion of $17,632,000 of transaction costs is included in interest expense. Common share purchase warrants issued in connection with mezzanine debt financing and valued at approximately $51,062,000 are re-allocated to Contributed Surplus.

(e)	Deferred purchase price


	$‘000
Deferred purchase price		425,440

Total adjustment to Deferred purchase price		425,440

Under the terms of the definitive agreement, Oldford shareholders will receive approximately $425,440,000 in deferred purchase price consideration payable upon the earlier of (i) July 31, 2017 and (ii) 30 months following closing of the transaction, based upon the occurrence of certain events.

(f)	Share Capital


	$‘000
Issuance of convertible preferred shares		1,139,356
Issuance of common shares		699,681
Related Transaction costs		-96,898
Convertible preferred share payment in kind (PIK)		69,387
Elimination of Oldford Share Capital		-52
Value of common share purchase warrants issued in connection with the transaction		-215,599

Total adjustment to Share Capital		1,595,874

Approximately $1,139,356,000 was raised through the issuance of convertible preferred shares on a private-placement basis at an initial conversion price of $24 per convertible preferred share.

Approximately $699,681,000 was raised through the issuance of common shares on a bought-deal private-placement basis.

Transaction costs associated with the issuance of convertible preferred shares and common shares is approximately $96,898,000.

Convertible preferred share payment in kind for the year ended December 31, 2013 is approximately $69,387,000.

Common share purchase warrants issued in connection with financing of the transaction are valued at approximately $215,599,000.

(g)	Contributed Surplus


	$‘000
Value of common share purchase warrants issued in connection with the transaction		215,599
Value of common share purchase warrants issued in connection with mezzanine debt financing		51,062
Elimination of Oldford Contributed Surplus		-3,552

Total adjustment to Contributed surplus		263,109

Common share purchase warrants issued in connection with the transaction are valued at approximately $215,599,000.

Common share purchase warrants issued in connection with mezzanine debt financing are valued at approximately $51,062,000.

Translation of Oldford’s financial statements

Oldford’s reporting currency is the United States Dollars. Oldford’s audited statement of financial position as at December 31, 2013 was translated to Canadian Dollars at rate of 1 United State Dollar to 1.0636 Canadian Dollars. Oldford’s audited statement of comprehensive income for the year ended December 31, 2013 was translated to Canadian Dollars at rate of 1 United State Dollar to 1.0299 Canadian Dollars.

3.	Pro forma consolidated statement of comprehensive income assumptions and adjustments for the year ended December 31, 2013

(a)	Financial Expense


	$‘000
Interest expense on long-term debt		194,871
PIK Interest and Interest accretion on long-term debt		17,632

Total adjustment to Financial Expenses		212,503

Interest paid on long-term debt issued in connection with the transaction amounts to approximately $194,871,000 for the year ended December 31, 2013.

PIK Interest and accretion of $17,632,000 of transaction costs is included in financial expense.

(b)	Acquisition-related costs


	$‘000
Acquisition-related costs in connection with the Oldford transaction	$	18,406

Total adjustment to Acquisition-related costs		18,406

Fees incurred in connection with the acquisition of Oldford are approximately $18,406,000.

(c)	Pro forma common shares outstanding:

The earnings per share is based on the following:


	31-Dec-13
Basic weighted average common shares		129,062,322


	31-Dec-13
Diluted weighted average common shares		203,895,254

4.	Pro forma consolidated statement of financial position assumptions and adjustments as at June 30, 2014

The unaudited pro forma consolidated statement of financial position gives effect to the following assumptions and adjustments as if they had occurred on January 1, 2014:

(a)	Acquisition of Oldford:

The following summarizes the estimated fair value of Oldford’s assets and liabilities assumed by Amaya at the date of acquisition:


Net assets acquired	$‘000
Cash and cash equivalents		917,210
Short-term deposits and available for sale investments		74,272
Accounts receivable		152,655
Inventories		942
Acquisition-related Intangibles and Goodwill		5,062,325
Property and equipment		51,982
Accounts payable and accrued liabilities		(351,500	)
Provisions		(20,021	)
User funds held on deposit		(646,703	)

Total Consideration		5,241,162


Consideration for the acquisition	$‘000
Upfront Purchase Price		4,814,362
Deferred Purchase Price		426,800

		5,241,162

The purchase price allocation has been determined from information available to the management of Amaya at this time and incorporates and reflects management’s preliminary assessment of the exchange value and net assets acquired. The allocation of the purchase price to the assets and liabilities of Oldford will be once the fair values of the assets and liabilities have been determined, and accordingly, the above purchase price allocation will change.

(b)	Cash and cash equivalents


	$‘000
Proceeds from Issuance of Common Shares		699,681
Proceeds from Issuance of Convertible Preferred Shares		1,139,356
Issuance of Senior Secured First and Second Lien Term Facility		3,007,404
Proceeds from the issuance of mezzanine debt and an incremental term loan facility		186,760
Upfront Purchase Consideration		-4,814,362
Payment of fees incurred in connection with the acquisition of Oldford		-245,187
Interest paid on long-term debt		-93,786
Repayment of principal		-12,049

Total adjustment to cash and cash equivalents		-132,184

Cash consideration of approximately $245,187,000 was used to pay fees incurred in connection with the financing and the acquisition of Oldford.

Principal repayments and interest paid on long-term debt amount to approximately $12,049,000 and $93,786,000 respectively for the six month period ended June 30, 2014.

Proceeds from issuance of mezzanine debt and an incremental term loan facility amount to approximately $186,760,000.

(c)	Acquisition-related intangibles and goodwill


	$‘000
Management’s preliminary estimate of acquisition-related intangibles and Goodwill with respect to Oldford transaction		5,061,431

Total adjustment to Acquisition-related Intangibles and Goodwill		5,061,431

The purchase price allocation for the Oldford transaction has been determined from information available to the management of Amaya at this time and incorporates and reflects management’s preliminary assessment of the exchange value and net assets acquired. The allocation of the purchase price to the assets and liabilities of Oldford will be finalized after the acquisition has been completed and the final fair values of the assets and liabilities have been determined, and accordingly, the above estimates of acquisition-related intangibles and Goodwill will change.

(d)	Long term debt


	$‘000
Issuance of long-term debt		3,194,164
Related Transaction costs		-129,515
Interest accretion and PIK Interest on long-term debt		11,193
Repayment of principal		-12,049
Value of common share purchase warrants issued in connection with mezzanine debt financing reallocated to Contributed Surplus		-51,062

Total adjustment to Long-term debt		3,012,731

Proceeds of $3,194,164,000 from the issuance of long-term debt were used to finance the acquisition of Oldford. $12,049,000 of principal and $129,515,000 of transaction costs were paid during the period from January 1, 2014 to June 30, 2014. PIK interest and accretion of $11,193,000 of transaction costs is included in interest expense. Common share purchase warrants issued in connection with mezzanine debt financing and valued at approximately $51,062,000 are reallocated to Contributed Surplus.

(e)	Deferred purchase price


	$‘000
Deferred purchase price		426,800

Total adjustment to Deferred purchase price		426,800

Under the terms of the definitive agreement, Oldford shareholders will receive approximately $426,800,000 in deferred purchase price consideration payable upon the earlier of (i) July 31, 2017 and (ii) 30 months following closing of the transaction, based upon the occurrence of certain events.

(f)	Share Capital


	$’000
Issuance of convertible preferred shares		1,139,356
Issuance of common shares		699,681
Related Transaction costs		-97,207
Convertible preferred share payment in kind (PIK)		34,181
Elimination of Oldford Share Capital		-52
Value of common share purchase warrants issued in connection with the transaction		-215,599

Total adjustment to Share Capital		1,560,358

Approximately $1,139,356,000 was raised through the issuance of convertible preferred shares on a private-placement basis at an initial conversion price of $24 per convertible preferred share.

Approximately $699,681,000 was raised through the issuance of common shares on a bought-deal private-placement basis.

Transaction costs associated with the issuance of convertible preferred shares and common shares is approximately $97,207,000.

Convertible preferred share payment in kind for the six months for June 30, 2014 is approximately $34,181,000.

Common share purchase warrants issued in connection with financing of the transaction are valued at approximately $215,599,000.

(g)	Contributed Surplus


	$’000
Value of common share purchase warrants issued in connection with the transaction		215,599
Value of common share purchase warrants issued in connection with mezzanine debt financing		51,062
Elimination of Oldford Contributed Surplus		-10,297

Total adjustment to Contributed surplus		256,365

Common share purchase warrants issued in connection with the transaction are valued at approximately $215,599,000.

Common share purchase warrants issued in connection with mezzanine debt financing are valued at approximately $51,062,000.

Translation of Oldford’s financial statements

Oldford’s reporting currency is the United States Dollars. Oldford’s unaudited statement of financial position as at June 30, 2014 was translated to Canadian Dollars at rate of 1 United State Dollar to 1.0670 Canadian Dollars. Oldford’s unaudited statement of comprehensive income for the six months ended June 30, 2014 was translated to Canadian Dollars at rate of 1 United State Dollar to 1.0968 Canadian Dollars.

5.	Pro forma consolidated statement of comprehensive income assumptions and adjustments for the six months ended June 30, 2014

(a)	Financial Expense


	$‘000
Interest expense on long-term debt		93,786
PIK interest and accretion on long-term debt		11,193

Total adjustment to Financial Expenses		104,979

Interest paid on long-term debt issued in connection with the transaction amounts to approximately $93,786,000 for the six months ended June 30, 2014.

PIK interest and accretion of $11,193,000 of transaction costs is included in financial expense.

(b)	Acquisition-related costs


	$‘000
Acquisition-related costs in connection with the Oldford transaction	$	18,465

Total adjustment to Acquisition-related costs		18,465

Fees incurred in connection with the acquisition of Oldford are approximately $18,465,000.

(c)	Pro forma common shares outstanding:

The earnings per share is based on the following:


	30-Jun-14
Basic weighted average common shares		129,669,931


	30-Jun-14
Diluted weighted average common shares		202,994,254

EX-99.16

Exhibit 99.16



		1500 University Street, Suite 700
April 15, 2014		Montreal QC, H3A 3S8
		www.computershare.com

To: All Canadian Securities Regulatory Authorities

Subject: Amaya Gaming Group Inc.

Dear Sirs:

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:


Meeting Type :		Annual General and Special Meeting

Record Date for Notice of Meeting :		May 13, 2014

Record Date for Voting (if applicable) :		May 13, 2014

Beneficial Ownership Determination Date :		May 13, 2014

Meeting Date :		June 17, 2014

Meeting Location (if available) :		Montreal, QC

Issuer sending proxy related materials directly to NOBO:		Yes

Issuer paying for delivery to OBO:		Yes

Notice and Access (NAA) Requirements:

NAA for Beneficial Holders		No

NAA for Registered Holders		No

Voting Security Details:


Description	CUSIP Number	ISIN

COMMON SHARES	02314F103	CA02314F1036

Sincerely,

Computershare

Agent for Amaya Gaming Group Inc.

EX-99.17

Exhibit 99.17

LOGO

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual and special meeting (the “Meeting”) of the shareholders (the “Shareholders”) of Amaya Gaming Group Inc. (the “Corporation”) will be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec, H3B 4W5, Canada, at 9:00 a.m. (Montréal time), on July 30, 2014, for the purposes of:

(a)	receiving the financial statements of the Corporation for the year ended December 31, 2013 and the report of the auditor thereon;

(b)	electing directors for the ensuing year;

(c)	appointing the auditor of the Corporation and authorizing the directors to fix its remuneration;

(d)

considering and, if deemed advisable, adopting a special resolution, the full text of which is reproduced in Schedule “B” to the accompanying management information circular (the “Information Circular”), authorizing an amendment to the articles of the Corporation (the “Articles”) to change the name of the Corporation to “Amaya Inc.”;

(e)

considering and, if deemed advisable, adopting a special resolution, the full text of which is reproduced in Schedule “C” to the Information Circular, authorizing an amendment to the Articles to add certain provisions intended to facilitate compliance by the Corporation with applicable gaming regulations;

(f)

considering and, if deemed advisable, adopting a special resolution, the full text of which is reproduced in Schedule “D” to the Information Circular, approving and ratifying the new general by-laws of the Corporation as proposed to take into account the coming into force of the Business Corporations Act (Québec), the full text of which is reproduced as Exhibit “A” to Schedule “D” to this Information Circular, all as more fully described in the Information Circular;

(g)

considering and, if deemed advisable, adopting a special resolution, the full text of which is reproduced in Schedule “E” to the Information Circular, authorizing an amendment to the Articles to provide for the appointment, from time to time, by the board of directors of the Corporation of additional directors to a maximum of one third of the number of directors elected at the previous annual meeting of Shareholders;

(h)

pursuant to the rules of the Toronto Stock Exchange (the “TSX”), considering and, if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “F” to the Information Circular, approving amendments to the stock option plan of the Corporation (the “Stock Option Plan”);

(i)

considering and, if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “G” to the Information Circular, approving and ratifying the advance notice by-law, the full text of which is reproduced as Exhibit “A” to Schedule “G” to the Information Circular, all as more fully described in the Information Circular;

(j)

considering and, if deemed advisable, adopting a special resolution, the full text of which is reproduced in Schedule “H” to the Information Circular, authorizing an amendment to the Articles to replace the current class of authorized preferred shares with the creation of a new class of convertible preferred shares (the “Preferred Shares”), all as more fully described in the Information Circular;

(k)

pursuant to the rules of the TSX, considering, and if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “I” to the Information Circular, approving certain terms of the Preferred Shares, particularly in connection with adjustment mechanisms to the initial conversion price of the Preferred Shares of $24 (the “Initial Conversion Price”) per common share of the Corporation (each, a “Common Share”), all as more fully described in the Information Circular;

(l)	pursuant to the rules of the TSX, considering and, if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “J” to the Information Circular, approving the issuance by the

Corporation of common share purchase warrants, 11 million of which are to be issued to certain funds or accounts managed or advised by GSO Capital Partners LP or its affiliates (collectively and together with GSO Capital Partners LP and its affiliates, “GSO”) and 1.75 million of which are to be issued to certain funds or accounts managed or advised by BlackRock Financial Management, Inc. or its affiliates (collectively, “BlackRock”), each with an exercise price of $0.01 and exercisable for a term of 10 years (collectively, the “Warrants”) (the “Issuance of the Warrants”), all as more fully described in the Information Circular;

(m)

pursuant to the rules of the TSX, considering and, if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “K” to the Information Circular, approving the value at which each of the Initial Conversion Price and the per share price of $20 at which Common Shares are to be issued to GSO (each a “Protected Price” and collectively, the “Protected Prices”) at closing of the Acquisition (hereinafter defined) have been set, which Protected Prices may be, at the time of the issuance or conversion, as applicable, less than the market price of the Common Shares minus the maximum discount permitted under the TSX Company Manual;

(n)

pursuant to the rules of the TSX, considering and, if deemed advisable, adopting an ordinary resolution, the full text of which is reproduced in Schedule “L” to the Information Circular, approving the issuance of the Preferred Shares at closing of the acquisition (the “Acquisition”) of all of the outstanding securities of Oldford Group Limited for an aggregate purchase price of US$4.9 billion (the “Purchase Price”), the proceeds of which will be used to finance a portion of the Purchase Price, as the offering shall, upon completion thereof, result in the issuance of securities exceeding 25% of the number of securities of the Corporation which are outstanding, on a non diluted basis, prior to the closing of the Preferred Shares Offering (the “Preferred Shares Offering Resolution”); and

(o)	transacting such other business as may properly be brought before the Meeting.

Further information regarding the matters to be considered at the Meeting is set out in the Information Circular.

The directors of the Corporation have fixed the close of business on June 11, 2014 as the record date for determining Shareholders entitled to receive notice of and to vote at the Meeting.

Montréal, Québec, June 30, 2014.

By order of the Board of Directors

(signed) David Baazov

David Baazov

Chairman of the Board,

President and Chief Executive Officer

IMPORTANT

Shareholders may exercise their rights by attending the Meeting or by completing a form of proxy. If you are unable to attend the Meeting in person, please complete, date and sign the enclosed form of proxy and return it in the envelope provided for that purpose. Proxies, to be valid, must be deposited at the office of the registrar and transfer agent of the Corporation, Computershare Investor Services Inc., located at 100 University Street, 8th Floor, Toronto, Ontario, M5J 2Y1, no later than 9:00 a.m. (Eastern Time) on July 28, 2014. Your Common Shares will be voted in accordance with your instructions as indicated on the form of proxy or, if no instructions are given on the form of proxy, the proxyholder will vote IN FAVOUR of the matters indicated in items (b) to (n) hereinabove.

- 2 -

These securityholder materials are being sent to both registered and non-registered owners of Common Shares. If you are a non-registered owner of Common Shares, and the issuer or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf.

By choosing to send these materials to you directly, the Corporation (and not the intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.

- 3 -

EX-99.18

Exhibit 99.18



		1500 University Street, Suite 700
June 12, 2014	AMENDED	Montreal QC, H3A 3S8
		www.computershare.com

To: All Canadian Securities Regulatory Authorities

Subject: Amaya Gaming Group Inc.

Dear Sirs:

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:


Meeting Type :		Annual General and Special Meeting

Record Date for Notice of Meeting :		June 11, 2014

Record Date for Voting (if applicable) :		June 11, 2014

Beneficial Ownership Determination Date :		June 11, 2014

Meeting Date :		July 30, 2014

Meeting Location (if available) :		Montreal, QC

Issuer sending proxy related materials directly to NOBO:		Yes

Issuer paying for delivery to OBO:		Yes

Notice and Access (NAA) Requirements:

NAA for Beneficial Holders		No

NAA for Registered Holders		No

Voting Security Details:


Description	CUSIP Number	ISIN

COMMON SHARES	02314F103	CA02314F1036

Sincerely,

Computershare

Agent for Amaya Gaming Group Inc.

EX-99.19

Exhibit 99.19

LOGO

8th Floor, 100 University Avenue

Toronto, Ontario M5J 2Y1

www.computershare.com

Security Class

Holder Account Number

Fold

LOGO


This Form of Proxy is solicited by and on behalf of Management. Notes to proxy

1.	Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).

2.	If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you must sign this proxy with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this proxy.

3.	This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.

4.	If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.

5.	The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management.

6.	The securities represented by this proxy will be voted in favour or withheld from voting or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.

7.	This proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before the meeting or any adjournment or postponement thereof.	Fold

8.	This proxy should be read in conjunction with the accompanying documentation provided by Management.

Proxies submitted must be received by 9:00 am, Eastern Time, on July 28, 2014.


VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

• Call the number listed BELOW from a touch tone telephone. 1-866-732-VOTE (8683) Toll Free	• Go to the following web site: www.investorvote.com • Smartphone? Scan the QR code to vote now.	• You can enroll to receive future securityholder communications electronically by visiting www.computershare.com/eDelivery and clicking on “eDelivery Signup”.

If you vote by telephone or the Internet, DO NOT mail back this proxy.

Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

Voting by mail or by Internet are the only methods by which a holder may appoint a person as proxyholder other than the Management nominees named on the reverse of this proxy. Instead of mailing this proxy, you may choose one of the two voting methods outlined above to vote this proxy.

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below.

CONTROL NUMBER

15AP14055_012KEB


+		+


Appointment of Proxyholder
I/We, being holder(s) of Amaya Gaming Group Inc. hereby appoint: Mr. David Baazov, or failing him, Mr. Daniel Sebag	OR	Print the name of the person you are appointing if this person is someone other than the Management Nominees listed herein.

as my/our proxyholder with full power of substitution and to attend, act and to vote for and on behalf of the shareholder in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual and Special Meeting of Shareholders of Amaya Gaming Group Inc. to be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec H3B 4W5, Canada on July 30, 2014 at 9:00 a.m. (Montreal Time), and at any adjournment or postponement thereof.

VOTING RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES.

1. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. David Baazov

02. Daniel Sebag

03. Wesley K. Clark, KBE

04. Divyesh (Dave) Gadhia

05. Harlan Goodson

06. Dr. Aubrey Zidenberg

Fold

For

Withhold

2. Appointment of Auditors

Appointment of Richter S.E.N.C.R.L./L.L.P. as Auditors of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration.

For

Against

For

Against

3. Special Resolution to Change the Name of the Corporation

To adopt the special resolution attached as Schedule “B” (the “Special Resolution to Change the Name of the Corporation”) in the Information Circular authorizing an amendment to the Articles to change the name of the Corporation to “Amaya Inc.”.

4. Special Resolution to Address Gaming Regulations

To adopt the special resolution attached as Schedule “C” (the “Special Resolution to Address Gaming Regulations”) in the Information Circular authorizing an amendment to the Articles to add certain provisions intended to facilitate compliance by the Corporation with applicable gaming regulations.

5. Special Resolution to Approve and Ratify the New General By-Laws

To adopt the special resolution attached as Schedule “D” (the “Special Resolution to Approve and Ratify the New General By-Laws”) in the Information Circular approving and ratifying the new general by-laws of the Corporation as proposed to take into account the entry into force of the Business Corporations Act (Québec)

6. Special Resolution to Facilitate the Appointment of Directors

To adopt the special resolution attached as Schedule “E” (the “Special Resolution to Facilitate the Appointment of Directors”) in the Information Circular authorizing an amendment to the Articles to provide for the appointment, from time to time, by the Board of additional directors to a maximum of one third of the number of directors elected at the previous annual meeting of Shareholders.

7. Ordinary Resolution to Approve and Amend the Stock Option Plan

To adopt the ordinary resolution attached as Schedule “F” (the “Ordinary Resolution to Approve and Amend the Stock Option Plan”) in the Information Circular approving amendments to the Stock Option Plan.

8. Ordinary Resolution to Approve and Ratify the Advance Notice By-Law

To adopt the ordinary resolution attached as Schedule “G” (the “Ordinary Resolution to Approve and Ratify the Advance Notice By-Law”) in the Information Circular to approve and ratify the Advance Notice By-Law.

9. Special Resolution to Create the Preferred Shares

To adopt the special resolution attached as Schedule “H” (the “Special Resolution to Create the Preferred Shares”) in the Information Circular authorizing an amendment to the Articles to create a new class of convertible preferred shares (the “Preferred Shares”).

10. Ordinary Resolution to Approve Certain Terms of the Preferred Shares

To adopt the ordinary resolution attached as Schedule “I” (the “Ordinary Resolution to Approve Certain Terms of the Preferred Shares”) in the Information Circular approving certain terms of the Preferred Shares, particularly in connection with adjustments to the Initial Conversion Price of the Preferred Shares of $24 per Common Share.

11. Ordinary Resolution to Approve the Issuance of the Warrants

To adopt the ordinary resolution attached as Schedule “J” (the “Ordinary Resolution to Approve the Issuance of the Warrants”) in the Information Circular approving the issuance by the Corporation of Warrants, 11 million of which are to be issued to GSO and 1.75 million of which are to be issued to BlackRock, each with an exercise price of $0.01 and exercisable for a term of 10 years from the date of issuance.

12. Ordinary Resolution to Approve the Protected Prices

To adopt the ordinary resolution attached as Schedule “K” (the “Ordinary Resolution to Approve the Protected Prices”) in the Information Circular approving the value at which each of the Initial Conversion Price and the price at which Common Shares are to be issued to GSO on a private-placement basis at closing of the Acquisition (collectively, the “Protected Prices”) have been set, which Protected Prices may be equal to, at the time of the grant or issuance, as the case may be, less than the market price of the Common Shares less the maximum discount permitted under the TSX Company Manual.

Fold

13. Ordinary Resolution to Approve the Preferred Shares Offering

To adopt the ordinary resolution attached as Schedule “L” (the “Ordinary Resolution to Approve the Preferred Shares Offering”) in the Information Circular approving the issuance of the Preferred Shares at closing of the Acquisition, as the Preferred Shares shall result in the issuance of securities exceeding 25% of the number of securities of the Corporation which are outstanding prior to the closing of the Preferred Shares Offering.


	Signature(s)	Date
Authorized Signature(s) – This section must be completed for your instructions to be executed.
I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated above, this Proxy will be voted as recommended by Management.		MM / DD / YY


Interim Financial Statements – Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨		Annual Financial Statements – Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨		Information Circular – Mark this box if you would like to receive the Information Circular by mail for the next securityholders’ meeting.		¨

If you are not mailing back your proxy, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.


¢		A G J Q		0 5 0 4 9 2		A R 1		+

15AP14055_012KFD

EX-99.20

Exhibit 99.20

LOGO

8th Floor, 100 University Avenue

Toronto, Ontario M5J 2Y1

www.computershare.com

Security Class

Holder Account Number

Intermediary

Fold

LOGO


NON-REGISTERED (BENEFICIAL) SECURITYHOLDERS

1.	We are sending to you the enclosed proxy-related materials that relate to a meeting of the holders of the series or class of securities that are held on your behalf by the intermediary identified above. Unless you attend the meeting and vote in person, your securities can be voted only by management, as proxy holder of the registered holder, in accordance with your instructions.

2.	We are prohibited from voting these securities on any of the matters to be acted upon at the meeting without your specific voting instructions. In order for these securities to be voted at the meeting, it will be necessary for us to have your specific voting instructions. Please complete and return the information requested in this VIF to provide your voting instructions to us promptly.

3.	If you want to attend the meeting and vote in person, please write your name in the place provided for that purpose in this form. You can also write the name of someone else whom you wish to attend the meeting and vote on your behalf. Unless prohibited by law, the person whose name is written in the space provided will have full authority to present matters to the meeting and vote on all matters that are presented at the meeting, even if those matters are not set out in this form or the information circular. Consult a legal advisor if you wish to modify the authority of that person in any way. If you require help, please contact the Registered Representative who services your account.

4.	This VIF should be signed by you in the exact manner as your name appears on the VIF. If these voting instructions are given on behalf of a body corporate set out the full legal name of the body corporate, the name and position of the person giving voting instructions on behalf of the body corporate and the address for service of the body corporate.

5.	If this VIF is not dated, it will be deemed to bear the date on which it is mailed by management to you.

6.	When properly signed and delivered, securities represented by this VIF will be voted as directed by you, however, if such a direction is not made in respect of any matter, the VIF will direct the voting of the securities to be made as recommended in the documentation provided by Management for the meeting.

7.	This VIF confers discretionary authority on the appointee to vote as the appointee sees fit in respect of amendments or variations to matters identified in the notice of meeting or other matters as may properly come before the meeting or any adjournment thereof.

8.	Your voting instructions will be recorded on receipt of the VIF.

9.	By providing voting instructions as requested, you are acknowledging that you are the beneficial owner of, and are entitled to instruct us with respect to the voting of, these securities.

10. 11.	If you have any questions regarding the enclosed documents, please contact the Registered Representative who services your account. This VIF should be read in conjunction with the information circular and other proxy materials provided by Management.	Fold

VIFs submitted must be received by 9:00 am, Eastern Time, on July 28, 2014.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

If you vote by telephone or the Internet, DO NOT mail back this VIF.

Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

Voting by mail or by Internet are the only methods by which a holder may choose an appointee other than the Management appointees named on the reverse of this VIF. Instead of mailing this VIF, you may choose one of the two voting methods outlined above to vote this VIF.

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below.

CONTROL NUMBER

15AP14055_012KIB


+		+


Appointee(s)
I/We, being holder(s) of Amaya Gaming Group Inc. hereby appoint: Mr. David Baazov, or failing him, Mr. Daniel Sebag	OR	If you wish to attend in person or appoint someone else to attend on your behalf, print your name or the name of your appointee in this space (see Note #3 on reverse).

as my/our appointee to attend, act and to vote in accordance with the following direction (or if no directions have been given, as the appointee sees fit) and all other matters that may properly come before the Annual and Special Meeting of Shareholders of Amaya Gaming Group Inc. to be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec H3B 4W5, Canada on July 30, 2014 at 9:00 a.m. (Montreal Time), and at any adjournment or postponement thereof.

VOTING RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES.

1. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. David Baazov

02. Daniel Sebag

03. Wesley K. Clark, KBE

04. Divyesh (Dave) Gadhia

05. Harlan Goodson

06. Dr. Aubrey Zidenberg

Fold

For

Withhold

2. Appointment of Auditors

Appointment of Richter S.E.N.C.R.L./L.L.P. as Auditors of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration.

For

Against

For

Against

3. Special Resolution to Change the Name of the Corporation

4. Special Resolution to Address Gaming Regulations

5. Special Resolution to Approve and Ratify the New General By-Laws

6. Special Resolution to Facilitate the Appointment of Directors

7. Ordinary Resolution to Approve and Amend the Stock Option Plan

8. Ordinary Resolution to Approve and Ratify the Advance Notice By-Law

9. Special Resolution to Create the Preferred Shares

10. Ordinary Resolution to Approve Certain Terms of the Preferred Shares

11. Ordinary Resolution to Approve the Issuance of the Warrants

12. Ordinary Resolution to Approve the Protected Prices

Fold

13. Ordinary Resolution to Approve the Preferred Shares Offering


	Signature(s)	Date
Authorized Signature(s) - This section must be completed for your instructions to be executed.
If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this VIF with signing capacity stated.		MM / DD / YY


Interim Financial Statements – Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨		Annual Financial Statements – Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨

If you are not mailing back your VIF, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.


¢		A G J Q		0 5 0 4 9 2		A R 1		+

15AP14055_012KJC

EX-99.21

Exhibit 99.21

AMAYA GAMING GROUP INC.

(the “Corporation”)

OFFICER’S CERTIFICATE


TO:		Autorité des marchés financiers
		Ontario Securities Commission
		Alberta Securities Commission
		British Columbia Securities Commission
		The Manitoba Securities Commission
		Financial and Consumer Affairs Authority of Saskatchewan


RE:		Special Meeting of shareholders of the Corporation to be held on July 30, 2014 (the “Meeting”) - Abridgement of time prescribed in subsection 2.2(1) and 2.5(1) of National Instrument 54-101 – *Communication with Beneficial Owners of Securities of a Reporting Issuer* (“NI 54-101”) in accordance with Section 2.20 of NI 54-101

The undersigned, Robert Mincoff, Director of Compliance and Assistant Secretary of the Corporation, hereby certifies, for and on behalf of the Corporation, and not in his personal capacity, that the Corporation:

(a)

has arranged to have “proxy-related materials” for the Meeting sent in compliance with NI 54-101 to all “beneficial holders” at least 21 days before the date fixed for the Meeting;

(b)

has arranged to have carried out all of the requirements of NI 54-101 in addition to those described in subparagraph (a) of section 2.20 of NI 54-101; and

(c)

is relying upon section 2.20 of NI 54-101 in connection with the abridgment of the time periods specified in Sections 2.2(1) and 2.5(1) of NI 54-101 in respect of the Meeting.

The terms “proxy-related materials” and “beneficial owner” as used in this certificate have the meanings given to them under NI 54-101.

DATED this 7^th day of July, 2014.

(signed) Robert Mincoff

Robert Mincoff

Director of Compliance and Assistant Secretary

EX-99.22

Exhibit 99.22

AMAYA GAMING GROUP INC.

(the “Corporation”)

REPORT OF VOTING RESULTS

(Pursuant to Section 11.3 of National Instrument 51-102 Continuous Disclosure Obligations)

This report describes the matter voted upon and the outcome of the vote at the annual and special meeting of shareholders of the Corporation (the “Meeting”) held on July 30, 2014. The matter set out below is described in greater detail in the management information circular of the Corporation dated June 30, 2014 (the “Management Information Circular”).


Item Voted Upon	Result of Vote
1. Election of directors proposed in the Management information circular

David Baazov	—	elected by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes withheld.

Daniel Sebag	—	elected by the shareholders of the Corporation with 92.11% of the votes cast in favour and 7.89% of the votes withheld.

Wesley K. Clark	—	elected by the shareholders of the Corporation with 90.45% of the votes cast in favour and 9.55% of the votes withheld.

Divyesh (Dave) Gadhia	—	elected by the shareholders of the Corporation with 90.49% of the votes cast in favour and 9.51% of the votes withheld.

Harlan Goodson	—	elected by the shareholders of the Corporation with 90.49% of the votes cast in favour and 9.51% of the votes withheld.

Dr. Aubrey Zidenberg	—	elected by the shareholders of the Corporation with 100% of the votes cast in favour.

	As such, each of the directors listed as nominees in the Management Information Circular were elected directors of the Corporation until the next Annual Meeting.

2. Appointment of Richter S.E.N.C.R.L./L.L.P. as auditors of the corporation for the ensuing year and authorizing the directors to fix their remuneration (the “Appointment of Auditors and Remuneration Authorization”)	—	The Appointment of Auditors and Remuneration Authorization was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes withheld.
	As such, Richter S.E.N.C.R.L./L.L.P. were appointed as auditors and the directors were authorized to fix their remuneration at the Meeting.


3. A special resolution to change the name of the Corporation (the “Name Change Resolution”)	—	The Name Change Resolution was approved by the shareholders of the Corporation with 100% of the votes cast in favour.

	As such, the Name Change Resolution was adopted at the Meeting.

4. A special resolution to address gaming regulations (the “Gaming Regulations Resolution”)	—	The Gaming Regulations Resolution was approved by the shareholders of the Corporation with 100% of the votes cast in favour.

	As such, the Gaming Regulations Resolution was adopted at the Meeting.

5. A special resolution to approve and ratify the new general by-laws (the “General By-Laws Resolution”)	—	The General By-Laws Resolution was approved by the shareholders of the Corporation with 100% of the votes cast in favour.

	As such, the General By-Laws Resolution was adopted at the Meeting.

6. A special resolution to facilitate the appointment of directors (the “Appointment of Directors Resolution”)	—	The Appointment of Directors Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Appointment of Directors Resolution was adopted at the Meeting.

7. An ordinary resolution to approve and amend the stock option plan (the “Stock Option Plan Resolution”).	—	The Stock Option Plan Resolution was approved by the shareholders of the Corporation with 94.61% of the votes cast in favour and 5.39% of the votes cast against.

	As such, the Stock Option Plan Resolution was adopted at the Meeting.

8. An ordinary resolution to approve and ratify the advance notice by-law (the “Advance Notice By-Law Resolution”).	—	The Advance Notice By-Law Resolution was approved by the shareholders of the Corporation with 95.38% of the votes cast in favour and 4.62% of the votes cast against.

	As such, the Advance Notice By-Law Resolution was adopted at the Meeting.

9. A special resolution to create the preferred shares (the “Preferred Shares Resolution”)	—	The Preferred Shares Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Preferred Shares Resolution was adopted at the Meeting.


10. An ordinary resolution to approve certain terms of the preferred shares (the “Preferred Share Terms Resolution”)	—	The Preferred Share Terms Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Preferred Share Terms Resolution was adopted at the Meeting.

11. An ordinary resolution to approve the issuance of warrants (the “Warrant Resolution”)	—	The Warrant Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Warrant Resolution was adopted at the Meeting.

12. An ordinary resolution to approve the protected prices (the “Protected Prices Resolution”)	—	The Protected Prices Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Protected Prices Resolution was adopted at the Meeting.

13. An ordinary resolution to approve the preferred shares offering (the “Preferred Shares Offering Resolution”)	—	The Preferred Shares Offering Resolution was approved by the shareholders of the Corporation with 99.99% of the votes cast in favour and 0.01% of the votes cast against.

	As such, the Preferred Shares Offering Resolution was adopted at the Meeting.

DATED this 30^th day of July 2014.

AMAYA GAMING GROUP INC.


By:	(s) Daniel Sebag
	Name:	Daniel Sebag

	Title:	Chief Financial Officer

EX-99.23

Exhibit 99.23



		1500 Robert-Bourassa Blvd., 7th Floor
April 2, 2015		Montreal QC, H3A 3S8
		www.computershare.com

To: All Canadian Securities Regulatory Authorities

Subject: AMAYA INC.

Dear Sir/Madam:

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:


Meeting Type :		Annual General and Special Meeting

Record Date for Notice of Meeting :		April 29, 2015

Record Date for Voting (if applicable) :		April 29, 2015

Beneficial Ownership Determination Date :		April 29, 2015

Meeting Date :		June 03, 2015

Meeting Location (if available) :		Montreal, Qc

Issuer sending proxy related materials directly to NOBO:		Yes

Issuer paying for delivery to OBO:		Yes

Notice and Access (NAA) Requirements:

NAA for Beneficial Holders		No

NAA for Registered Holders		No

Voting Security Details:


Description	CUSIP Number	ISIN

COMMON SHARES	02314M108	CA02314M1086

COMMON SHARES 144A RESTRICTED	02314M504	US02314M5040

Sincerely,

Computershare

Agent for AMAYA INC.

EX-99.24

Exhibit 99.24


April 30, 2015		1500 Robert-Bourassa Blvd., 7th Floor
		Montreal QC, H3A 3S8
	AMENDED	www.computershare.com

To: All Canadian Securities Regulatory Authorities

Subject: AMAYA INC.

Dear Sir/Madam:

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:


Meeting Type :		Annual General and Special Meeting
Record Date for Notice of Meeting :		April 29, 2015
Record Date for Voting (if applicable) :		April 29, 2015
Beneficial Ownership Determination Date :		April 29, 2015
Meeting Date :		June 22, 2015
Meeting Location (if available) :		Montreal, Qc
Issuer sending proxy related materials directly to NOBO:		Yes
Issuer paying for delivery to OBO:		Yes
Notice and Access (NAA) Requirements:
NAA for Beneficial Holders		No
NAA for Registered Holders		No

Voting Security Details:


Description	CUSIP Number	ISIN
COMMON SHARES	02314M108	CA02314M1086
COMMON SHARES 144A RESTRICTED	02314M504	US02314M5040

Sincerely,

Computershare

Agent for AMAYA INC.

EX-99.25

Exhibit 99.25

LOGO

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

AND

MANAGEMENT INFORMATION CIRCULAR OF

AMAYA INC.

For the Annual and Special Meeting of Shareholders

to be held on June 22, 2015

at 2:00 p.m.

May 14, 2015

LOGO

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual and special meeting (the “Meeting”) of shareholders (the “Shareholders”) of Amaya Inc. (“Amaya” or the “Corporation”) will be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec, H3B 4W5, Canada, at 2:00 p.m. (Eastern Time), on June 22, 2015, for the purposes of:

(a)	receiving the audited consolidated financial statements of the Corporation for the year ended December 31, 2014 and the report of the auditor thereon;

(b)	electing directors for the ensuing year;

(c)	appointing the auditor of the Corporation and authorizing the directors to fix its remuneration;

(d)

considering and, if deemed advisable, approving an ordinary resolution, the full text of which is reproduced in Schedule “B” to the accompanying management information circular (the “Information Circular”), ratifying the adoption of a new equity incentive plan of the Corporation in the form set out at Schedule “D” to the Information Circular and amending the terms of the current stock option plan of the Corporation (the “Stock Option Plan”) to limit the number of shares issuable thereunder to the number of options currently outstanding thereunder;

(e)	considering and, if deemed advisable, approving an ordinary resolution of disinterested shareholders, the full text of which is reproduced in Schedule “E” to the Information Circular, approving amendments to the Stock Option Plan to extend the expiry date of certain options granted thereunder; and

(f)	transacting such other business as may properly be brought before the Meeting.

Further information regarding the matters to be considered at the Meeting is set out in the Information Circular.

The directors of the Corporation have fixed the close of business on April 29, 2015 as the record date for determining Shareholders entitled to receive notice of and to vote at the Meeting.

Montréal, Québec, May 14, 2015.

By order of the Board of Directors

(s) David Baazov

David Baazov

Chairman of the Board of Directors,

President and Chief Executive Officer

IMPORTANT

Shareholders are encouraged to vote. Please complete, date and sign the enclosed form of proxy or voting instruction form and return it in the envelope provided for that purpose. Proxies, to be valid, must be deposited at the office of the registrar and transfer agent of the Corporation, Computershare Investor Services Inc., located at 100 University Street, 8^th Floor, Toronto, Ontario, M5J 2Y1, no later than 2:00 p.m. (Eastern Time) on June 18, 2015, or, in the event the Meeting is adjourned or postponed, then not less than 48 hours (excluding Saturdays, Sundays and holidays) before the adjourned meeting is reconvened or the postponed meeting is convened. If you appoint David Baazov or Daniel Sebag as your proxyholder, your common shares of the Corporation will be voted in accordance with your instructions in the form of proxy or voting instruction form or, if no such instructions are given, such proxyholders will vote IN FAVOUR of the matters indicated in items (b) to (e) hereinabove. Shareholders may also vote by telephone or internet by following the instructions provided in the enclosed form of proxy. If you choose to vote by telephone or internet, your vote must also be cast no later than 2:00 p.m. (Eastern Time) on June 18, 2015, or, in the event the Meeting is adjourned or postponed, then not less than 48 hours (excluding Saturdays, Sundays and holidays) before the adjourned meeting is reconvened or the postponed meeting is convened.

These Shareholder materials are being sent to both registered and non-registered owners of common shares of the Corporation (the “Common Shares”). If you are a non-registered owner of Common Shares, and the Corporation or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding your securities on your behalf.

TABLE OF CONTENTS


INTRODUCTION		1

NOTICE TO AMAYA SHAREHOLDERS IN THE UNITED STATES		1

NON-IFRS MEASURES		1

CURRENCY		1

FORWARD-LOOKING STATEMENTS		1

VOTING INFORMATION AND GENERAL PROXY MATTERS		2

BUSINESS OF THE MEETING		5

A.	PRESENTATION OF THE FINANCIAL STATEMENTS	5

B.	ELECTION OF DIRECTORS	5

C.	APPOINTMENT OF AUDITOR	10

D.	APPROVAL OF NEW EQUITY INCENTIVE PLAN AND STOCK OPTION PLAN AMENDMENT	10

E.	APPROVAL OF STOCK OPTION PLAN AMENDMENT	15

STATEMENT OF EXECUTIVE COMPENSATION		18

DIRECTOR COMPENSATION		30

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS		32

DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE		32

INDEBTEDNESS OF DIRECTORS AND OFFICERS		32

MANAGEMENT CONTRACTS		32

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS		33

STATEMENT OF CORPORATE GOVERNANCE PRACTICES		33

AUDIT COMMITTEE INFORMATION		38

RECEIPT OF SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING		40

ADDITIONAL INFORMATION		40

APPROVAL OF THE INFORMATION CIRCULAR		40

SCHEDULE “A” CHANGE OF AUDITOR REPORTING PACKAGE		A-1

SCHEDULE “B” ORDINARY RESOLUTION TO APPROVE THE NEW EQUITY INCENTIVE PLAN AND AMEND THE STOCK OPTION PLAN		B-1

SCHEDULE “C” BOARD MANDATE		C-1

SCHEDULE “D” NEW EQUITY INCENTIVE PLAN		D-1

SCHEDULE “E” ORDINARY RESOLUTION TO AMEND THE STOCK OPTION PLAN		E-1

MANAGEMENT INFORMATION CIRCULAR

INTRODUCTION

This management information circular (this “Information Circular”) is provided in connection with the solicitation of proxies for use at the annual and special meeting (the “Meeting”) of shareholders (the “Shareholders”) of Amaya Inc. (the “Corporation” or “Amaya”) to be held on June 22, 2015, at the time and place and for the purposes stated in the accompanying notice of meeting (the “Notice of Meeting”) and any adjournment thereof. Unless otherwise indicated, the information contained in this Information Circular is given as of May 14, 2015.

NOTICE TO AMAYA SHAREHOLDERS IN THE UNITED STATES

Amaya is a corporation existing under the laws of Québec, Canada. The solicitation of proxies and the transactions contemplated herein involve securities of a Canadian issuer and are being effected in accordance with provincial and Canadian corporate and securities laws. Shareholders should be aware that requirements under such provincial and Canadian laws differ from requirements under United States corporate and securities laws relating to United States corporations. The proxy rules under the United States Securities Exchange Act of 1934, as amended, are not applicable to the Corporation or this solicitation and therefore this solicitation is not being effected in accordance with such corporate and securities laws.

NON-IFRS MEASURES

Certain terms used or incorporated by reference in this Information Circular, such as EBITDA, are not measures defined under International Financial Reporting Standards (“IFRS”), do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. EBITDA and other non-IFRS measures, as computed by Amaya, may not be comparable to similar measures as reported by other reporting issuers in similar or different industries.

EBITDA as used by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests.

CURRENCY

References to “dollars”, “CDN$” and “$” refer to Canadian dollars, “US$” refer to United States dollars and references to “£” refer to British pound sterling. All currency amounts referred to in this Information Circular are expressed in Canadian dollars, unless stated otherwise.

FORWARD-LOOKING STATEMENTS

This Information Circular contains certain information that may constitute forward-looking information within the meaning of applicable securities laws, which Amaya refers to in this Information Circular as forward-looking statements. These statements reflect Amaya’s current expectations related to future events or its future results, performance, achievements, business prospects or opportunities and products and services development, and future trends affecting the Corporation. All such statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “would”, “should”, “believe”, “objective”, “ongoing” or the negative of these words or other variations or synonyms of these words or comparable terminology and similar expressions.

Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Amaya’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes

are appropriate in the circumstances. Amaya’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Amaya can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail under the “Risk Factors and Uncertainties” section in Amaya’s annual information form for the year ended December 31, 2014 (the “2014 AIF”) and in Amaya’s Management’s Discussion and Analysis for the period ended March 31, 2015 (the “Q1 2015 MD&A”): the heavily regulated industry in which the Corporation carries on its business; online gaming generally; current and future legislation with respect to online gaming; potential changes to the gaming regulatory scheme; legal and regulatory requirements; significant barriers to entry; competition; impact of inability to complete future acquisitions or to integrate businesses successfully; ability to develop and enhance existing solutions; risks of foreign operations generally; protection of proprietary technology and intellectual property rights; lengthy and variable sales cycle; ability to recruit and retain management and other qualified personnel; defects in the Corporation’s solutions, products or services; losses due to fraudulent activities; impact of currency fluctuations; management of growth; contract awards; service interruptions of Internet service providers; ability of Internet infrastructure to meet applicable demand; systems, networks or telecommunications failures or cyber-attacks; regulations that may be adopted with respect to the Internet and electronic commerce; refinancing risks; customer and operator preferences and changes in the economy; changes in ownership of customers or consolidation within the gaming industry; litigation costs and outcomes; expansion into new gaming markets; relationships with distributors; and natural events.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those expressly or impliedly expected or estimated in such statements. Shareholders and investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur. Although the Corporation cautions that the foregoing list of significant risk factors, as well as those risk factors presented under the heading “Risk Factors and Uncertainties” and elsewhere in the 2014 AIF and the Q1 2015 MD&A, are not exhaustive, Shareholders and investors should carefully consider them and the uncertainties they represent and the risks they entail. The forward-looking statements contained in this Information Circular are expressly qualified by this cautionary statement. Unless otherwise indicated by the Corporation, forward-looking statements in this Information Circular describe Amaya’s expectations as of May 14, 2015 and, accordingly, are subject to change after such date. The Corporation does not undertake to update or revise any forward-looking statements, except in accordance with applicable securities laws.

Additional information relating to Amaya can be located under the Corporation’s profile on SEDAR at www.sedar.com.

VOTING INFORMATION AND GENERAL PROXY MATTERS

Solicitation of Proxies

The enclosed proxy is being solicited by the management of the Corporation and the expenses of this solicitation will be borne by the Corporation. The solicitation will be conducted primarily by mail but proxies may also be solicited personally by officers, employees or agents of the Corporation, without additional compensation. The Corporation shall directly deliver proxy documents to registered owners and non-registered owners of common shares of the Corporation (“Common Shares”) which are non-objecting beneficial owners through the Corporation’s registrar and transfer agent, Computershare Investor Services Inc. (“Computershare”), and the Corporation shall bear the cost of such delivery. The Corporation will also reimburse brokers and other persons holding Common Shares on their behalf or on behalf of nominees for reasonable costs incurred in sending the proxy documents to non-registered owners who are objecting beneficial owners.

Voting Process

The voting process is different depending on whether you are a registered or non-registered owner of Common Shares and, if you are a non-registered owner of Common Shares, whether you are a non-objecting beneficial owner or objecting beneficial owner.

If you have Common Shares registered in your own name, you are a registered owner. If you do not hold Common Shares in your own name, you are a non-registered owner. If your Common Shares are listed in an account statement provided to you by a broker, then it is likely that those Common Shares will not be registered in your name, but under the broker’s name or under the name of an agent of the broker such as CDS Clearing and Depository Services Inc., the nominee for many Canadian brokerage firms, or its nominee.

There are two kinds of non-registered owners: (i) objecting beneficial owners, i.e., those who object to their name being made known to the issuers of shares which they own, and (ii) non-objecting beneficial owners, i.e., those who do not object to their name being made known to the issuers of the shares which they own. Non-objecting beneficial owners will receive a voting instruction form from the Corporation’s registrar and transfer agent, Computershare. This is to be completed and returned to Computershare in the envelope provided.

Securities regulation requires brokers or agents to seek voting instructions from objecting beneficial owners in advance of the Meeting. Objecting beneficial owners should be aware that brokers or agents can only vote Common Shares if instructed to do so by the objecting beneficial owner. Your broker or agent (or their agent, Broadridge Financial Solutions, Inc.) will have provided you with a voting instruction form or form of proxy for the purpose of obtaining your voting instructions. Every broker has its own mailing procedures and provides instructions for voting. You must follow those instructions carefully to ensure your Common Shares are voted at the Meeting.

If you are an objecting beneficial owner receiving a voting instruction form or proxy from a broker or agent, you cannot use that proxy to vote in person at the Meeting. To vote your Common Shares at the Meeting, the voting instruction form or proxy must be returned to the broker or agent well in advance of the Meeting, as instructed by the broker or agent. If you wish to attend and vote your Common Shares in person at the Meeting, follow the instructions for doing so provided by your broker or agent.

Record Date

The record date for determining those Shareholders entitled to receive notice and to vote at the Meeting is the close of business on April 29, 2015 (the “Record Date”). Only registered and non-registered owners of Common Shares as of the close of business on the Record Date are entitled to receive notice of and to vote at the Meeting. No person becoming a registered or non-registered owner after the Record Date shall be entitled to receive notice of the Meeting, nor can any registered or non-registered owner vote Common Shares they acquire after the Record Date at the Meeting. The failure of any Shareholder to receive notice of the Meeting does not deprive the Shareholder of the right to vote at the Meeting. As of the Record Date there were 133,740,731 Common Shares issued and outstanding.

Appointment of Proxyholders

The persons named as proxyholders in the enclosed form of proxy or voting instruction form, David Baazov or Daniel Sebag, are directors and officers of the Corporation. You are entitled to appoint a person, who need not be a Shareholder, other than the persons designated in the enclosed form of proxy, to represent you at the Meeting. If you are a registered or non-objecting beneficial owner, such right may be exercised by inserting in the blank space provided in the form of proxy or voting instruction form the name of the person to be designated or by completing another form of proxy or voting instruction form and, in either case, depositing the form of proxy or voting instruction form with the registrar and transfer agent of the Corporation, Computershare located at 100 University Street, 8^th Floor, Toronto, Ontario, M5J 2Y1, at any time before the proxy deadline, being 2:00 p.m. (Eastern Time) on June 18, 2015 or, in the event the Meeting is adjourned or postponed, then not less than 48 hours (excluding Saturdays, Sundays and holidays) before the adjourned meeting is reconvened or the postponed meeting is convened. Objecting beneficial owners should follow the instructions provided by their broker or agent and must return the form of proxy or voting instruction form as directed by their broker or agent sufficiently in advance of the proxy deadline to enable their broker or agent to act on it before the proxy deadline. The Corporation reserves the right to accept late proxies and to waive the proxy deadline with or without notice, but is under no obligation to accept or reject any particular late proxy.

Revocation of Proxies

You may revoke your proxy by providing new voting instructions in a new proxy or voting instruction form with a later date. Any new voting instructions, however, will only take effect if received prior to the proxy deadline.

Registered and non-objecting beneficial owners may also revoke their proxy without providing new voting instructions by giving a notice in writing signed by such owner, or by his or her attorney authorized in writing to the registrar and transfer agent of the Corporation, Computershare, located at 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, no later than the close of business on the last business day preceding the day of the Meeting or any adjournment thereof, or to the Chairman of the Meeting on the day of the Meeting or any adjournment thereof or in any other manner permitted by law; provided that if the registered or non-objecting beneficial owner is not an individual, the notice in writing must be signed by a duly authorized officer of such owner. Registered owners may attend the Meeting and vote in person and, if they do so, any voting instructions previously given by them for such Common Shares will be revoked. Objecting beneficial owners must contact their broker or agent in order to revoke their voting instructions and/or provide new voting instructions.

Exercise of Voting Rights by Proxies

The persons named as proxies will vote or withhold from voting the Common Shares in respect of which they are appointed or vote for or against any particular question, in accordance with the instructions of the Shareholder appointing them. In the absence of such instructions, such Common Shares will be voted in favour of all the matters identified in the attached Notice of Meeting. The enclosed form of proxy confers discretionary authority upon the persons named therein to vote as they see fit with respect to amendments or variations to matters identified in the Notice of Meeting and to other matters which may properly come before the Meeting or any adjournment or postponement thereof, whether or not the amendment or variation or other matter that comes before the Meeting is or is not routine or is contested. As at the date of this Information Circular, the management of the Corporation knows of no such amendment, variation or other matter expected to come before the Meeting other than the matters referred to in the Notice of Meeting.

Except with respect to the election of directors, to be approved resolutions submitted to a vote of the Shareholders at the Meeting must be passed by a majority of the votes cast by the holders of Common Shares present at the Meeting in person or represented by proxy, with the resolution approving amendments to the current stock option plan of the Corporation (as amended from time to time, the “Stock Option Plan”) to extend the expiry date of certain options thereunder having to be approved by a majority of the votes on a disinterested shareholder basis.

Voting in Person at the Meeting

Registered owners may attend and vote in person at the Meeting. Non-objecting beneficial owners wishing to attend and vote in person at the Meeting should insert their name in the space provided in the voting instruction form and deposit it with Computershare, at any time before the proxy deadline. Objecting beneficial owners wishing to attend and vote in person at the Meeting should follow the instructions provided by their broker or agent. If you are a Canadian resident objecting beneficial owner, you need only insert your name in the space provided for the proxyholder appointment in the voting instruction form or proxy form, and return it as instructed by your broker or agent and you should not complete the voting section of the proxy form or voting information form, as you will vote in person at the Meeting. If you are an objecting beneficial owner resident in the United States, you will likely be instructed to mark the appropriate box on the other side of the voting instruction form to request a legal proxy to be issued and mailed to you by your broker or agent, and you will need to send the voting instruction form to your broker or agent, receive the legal proxy from your broker or agent and deposit the legal proxy with Computershare prior to the deadline.

Interest of Certain Persons in Matters to Be Acted Upon

No person who has been a director or an executive officer of the Corporation nor any proposed nominee for election as a director of the Corporation at any time since the beginning of its last completed financial year, or any associate or affiliate of any such director, officer or proposed nominee, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, except as set forth in this Information Circular.

Voting Securities and Principal Holders Thereof

As at April 29, 2015, 133,740,731 Common Shares are issued and outstanding, being the only class of shares of the Corporation entitled to be voted at the Meeting. To the knowledge of the board of directors of the Corporation (the “Board”) and management of the Corporation, as at April 29, 2015, no person owned or exercised control or direction

over more than 10% of the issued and outstanding Common Shares, except for the Corporation’s Chief Executive Officer, David Baazov, who held 24,463,599, representing approximately 18.3% of all of the issued and outstanding Common Shares as of that date.

BUSINESS OF THE MEETING

The Meeting will be constituted as an annual and special meeting. The audited consolidated financial statements of the Corporation for the year ended December 31, 2014 and the auditor’s report thereon will be presented to the Shareholders at the Meeting, but no vote thereon or with respect thereto is required or proposed to be taken. Shareholders will be asked to consider and vote on:

A.	the election of the directors of the Corporation who will serve until the next annual meeting of Shareholders or until their successors are appointed;

B.	the appointment of the auditor of the Corporation who will serve until the end of the next annual meeting of Shareholders or until its successor is appointed, and authorizing the Board to fix its remuneration;

considering and, if deemed advisable, approving an ordinary resolution, the full text of which is reproduced in Schedule “B” (the “Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan”) ratifying the adoption of a new equity incentive plan of the Corporation (the “New Equity Incentive Plan”) in the form set out at Schedule “D” to this Information Circular and amending the terms of the Stock Option Plan to limit the number of shares issuable thereunder to the number of options currently outstanding thereunder;

considering and, if deemed advisable, approving an ordinary resolution of disinterested shareholders, the full text of which is reproduced in Schedule “E” (the “Ordinary Resolution to Amend the Stock Option Plan”) to the Information Circular, approving amendments to the Stock Option Plan to extend the expiry date of certain options granted thereunder; and

E.	to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

A.	Presentation of the Financial Statements

As indicated above, the audited consolidated financial statements of the Corporation for the year ended December 31, 2014 and the auditor’s report thereon will be presented to the Shareholders at the Meeting, but no vote with respect thereto is required or proposed to be taken.

B.	Election of Directors

The articles of the Corporation (the “Articles”) provide that the Board shall consist of not less than three and not more than fifteen directors. The number of directors currently in office is six. Each director of the Corporation elected will hold office until the next annual meeting of the Shareholders or until the election of his successor, unless he resigns or his office otherwise becomes vacant.

Majority Voting

The Corporation has adopted a majority voting policy pursuant to which any nominee for a director position who has more votes cast by ballot at a meeting of shareholders of the Corporation at which directors are to be elected (or, if no ballot is conducted, votes represented by proxies validly deposited prior to that meeting) “withheld” from his or her election than are cast in favour of his or her election at that meeting must, immediately following that meeting, tender his or her resignation to the Board for consideration. Directors other than those who received more votes withheld than were voted in favour of their election shall consider, and within 90 days determine, whether or not to accept the resignation. The resignation shall be accepted absent exceptional circumstances and is effective when accepted by the Board. A press release disclosing the directors’ determination shall be issued promptly following such determination, and if the resignation is not accepted will include the reasons for doing so. Majority voting would not, however, apply in the event a director’s election is contested.

Nominees

Management of the Corporation proposes to nominate the persons whose names are set forth below to act as directors of the Corporation. Except where authority to vote on the election of directors is withheld, the persons named in the accompanying form of proxy intend to vote IN FAVOUR of the election of each of the six nominees whose names are hereinafter set forth. If prior to the Meeting, any of the nominees shall for any reason become unable or unwilling to serve as a director, it is intended that the discretionary power granted by the form of proxy shall be used to vote for any other person or persons identified by the Board to serve as directors, unless the Shareholder has specified in the form of proxy that his, her or its Common Shares are to be withheld from voting on the election of directors. The Board and management of the Corporation have no reason to believe that any of such nominees will be unable or unwilling to serve, for any reason, if elected to office.

The following table and the notes thereto state the names of all persons proposed to be nominated for election as directors, all other positions and offices with the Corporation now held by them, their principal occupations or employment, their periods of service as directors of the Corporation and the number of Common Shares beneficially owned or over which control or direction is exercised by each of them, in each case as at April 29, 2015. Each director will hold office until the next annual meeting of Shareholders or until his successor is duly elected, unless prior thereto the director resigns or the director’s office becomes vacant.


Name of Proposed Directors	Position in the Corporation	Principal Occupation	Director Since	Common Shares, Directly or Indirectly, Beneficially Owned⁽¹⁾
David Baazov Montréal, Québec, Canada	President, Chief Executive Officer and Chairman of the Board	President, Chief Executive Officer and Chairman of the Board of Amaya Inc.	January 1, 2006	24,463,599
Daniel Sebag Montréal, Québec, Canada	Chief Financial Officer, Treasurer and Director	Chief Financial Officer, Amaya Inc.	May 11, 2010	350,000
Gen. Wesley K. Clark Little Rock, Arkansas, USA	Director⁽²⁾⁽³⁾	Chairman and Chief Executive Officer, Wesley K. Clark & Associates, LLC (strategic consulting firm)	May 11, 2010	15,000
Divyesh (David) Gadhia Burnaby, British Columbia, Canada	Director⁽²⁾⁽³⁾	Chairman, Spud.ca (local farmers and food producers network) and President, Atiga Investments Inc. (investment firm)	May 11, 2010	35,000
Harlan Goodson Sacramento, California, USA	Director⁽²⁾⁽³⁾	Attorney, The Law Office of Harlan W. Goodson (law firm)	May 11, 2010	—
Dr. Aubrey Zidenberg Toronto, Ontario, Canada	Director	President and Chief Executive Officer, Casino Amusements Canada	July 30, 2014	—

Notes:

(1)	The information as to the number of Common Shares beneficially owned or over which control is exercised is provided to the best of the knowledge of the Corporation based on publicly available information.

(2)	Member of the corporate governance, nominating and compensation committee (the “Corporate Governance, Nominating and Compensation Committee”).

(3)	Member of the audit committee (the “Audit Committee”).

The proposed directors, as a group, beneficially own, directly or indirectly, or exercise direction or control over, 24,863,599 Common Shares, representing approximately 18.6% of the issued and outstanding Common Shares as at April 29, 2015.

Biographies

David Baazov

Mr. David Baazov, 34, is the Chairman of the Board and has been the President and Chief Executive Officer of Amaya since 2006, and is responsible for overseeing the day-to-day business affairs of the Corporation and devising and implementing the Corporation’s business plan and strategies. Mr. Baazov started Amaya’s business in the mid-2000’s, led the Corporation through a successful listing on the TSX Venture Exchange (“TSXV”) in July 2010 and subsequent graduation to the Toronto Stock Exchange (“TSX”) in 2013, and has since turned the Corporation into a global gaming leader through a combination of organic growth and strategic acquisitions, including through the Rational Group Acquisition (as defined under “Statement of Executive Compensation – Summary Compensation Table”), which resulted in Amaya becoming the world’s largest publicly traded online gaming company. The industry and business community have recognized Mr. Baazov with certain awards, including Ernst & Young’s 2013 Québec EY Entrepreneur of the Year for the Information Technology category. A panel of Canadian technology analysts and readers of Cantech Letter (www.cantechletter.com), an online magazine focused on innovation sector companies listed on the TSX and the TSXV, selected Mr. Baazov as the TSX Venture Tech Executive of the Year in 2012, and in each of 2013 and 2014 as the TSX Tech Executive of the Year. From 2000 to 2006, Mr. Baazov was the founder of a business marketing company and served as the Vice President of Sales of Vortek Systems Inc., a supplier and distributor of computer hardware and accessories.

Daniel Sebag, C.A.

Mr. Daniel Sebag, 50, joined Amaya in July 2007 as Chief Financial Officer and is a current director and the Treasurer of Amaya. Mr. Sebag is a Chartered Accountant and specializes in the areas of cost management and financial reporting systems. He currently oversees the Corporation’s financial reporting and treasury functions. Between 1999 and 2007, Mr. Sebag was a faculty lecturer at McGill University in Montreal, Québec, Canada where he led executive seminars in accounting and finance at its International Executive Institute, including the Directors Education Program and the Advanced Management Course. He has also taught advanced accounting courses to students in the McGill University MBA and Chartered Accountancy programs. From 1993 to 2007, Mr. Sebag served as a financial, accounting and information systems consultant to several multinational companies, including Bombardier, Ericsson, Transat AT and Air Liquide. Mr. Sebag earned a Bachelor’s of Science degree in Psychology from McGill University in 1987 and a Specialized Graduate Diploma in Accounting from McGill University in 1991.

Divyesh (David) Gadhia, C.A.

Harlan Goodson

Mr. Harlan Goodson, 68, is a current director and served as the Director of California’s Division of Gambling Control from 1999 to 2003, during which he led the implementation of California’s Tribal-State Class III gaming compacts. Prior to forming his own law practice, The Law Office of Harlan W. Goodson, in Sacramento, California, Mr. Goodson was with the national law firm of Holland and Knight, LLP for four years where his practice concentrated on Gaming Law and Gaming Regulation and Governmental Affairs. Mr. Goodson’s biography was published in the 2000 edition of Who’s Who in American Law and in 2002, his work gained him international distinction when he was the recipient of the International Masters of Gaming Law inaugural Regulator of the Year award in 2001. Prior to being appointed to the position of Director of California’s Division of Gambling Control, Mr. Goodson worked in the California State Senate as a legislative consultant for Senator Bill Lockyer from 1994 to 1999. While serving as a consultant in the state legislature, Mr. Goodson drafted legislation in the areas of criminal law, correctional law, juvenile law and insurance

law. Since 1996, Mr. Goodson has been an adjunct law professor teaching classes on the legislative process and statutory interpretation at John F. Kennedy University, School of Law. He has been a national speaker at conferences, symposia, law schools and before governmental bodies on the subjects of gaming regulation, Tribal government gaming, and Tribal-State relations. Mr. Goodson is a member of the California State Bar, the International Masters of Gaming Law and the International Association of Gaming Advisors. In 2007, Mr. Goodson also served as a Judge Pro Tempore for the Superior Court in Sacramento, California. Mr. Goodson has also been listed in America’s Best Lawyers annually since 2005 and was selected by his peers as the Northern California 2012 Attorney of the Year for Gaming Law.

General Wesley K. Clark

General Wesley K. Clark, 70, is a current director and serves as Chairman and Chief Executive Officer of Wesley K. Clark & Associates, a strategic consulting firm, since its founding in 2004. General Clark is, and has also been, a Co-Chairman of Growth Energy, an organization that represents producers and supporters of ethanol, since January 2009, senior fellow at UCLA’s Burkle Center for International Relations since 2006, Advisor at the Blackstone Group since 2013, Trustee of International Crisis Group since 2004, Founding Chair of City Year Little Rock/North Little Rock, an AmeriCorps program, which is a national service organization that unites young adults, since 2004, and Chairman of Enverra Inc., a banking and strategic advisory firm, since 2010, as well as serving on a number of private and public company boards. General Clark has authored four books and serves as a founding member of the Clinton Global Initiative, and Director of the Atlantic Council. General Clark retired a four star general after 38 years in the United States Army. He graduated first in his class at West Point and completed degrees in Philosophy, Politics and Economics at Oxford University (B.A. and M.A.) as a Rhodes Scholar. While serving in Vietnam, he commanded an infantry company in combat, where he was severely wounded and evacuated home on a stretcher. He later commanded at the battalion, brigade and division level, and served in a number of significant staff positions, including service as the Director Strategic Plans and Policy (J-5). In his last assignment as Supreme Allied Commander Europe he led NATO forces to victory in Operation Allied Force, saving 1.5 million Albanians from ethnic cleansing. His awards include the Presidential Medal of Freedom, Defense Distinguished Service Medal (five awards), Silver star, bronze star, purple heart, honorary knighthoods from the British and Dutch governments, and numerous other awards from other governments, including award of Commander of the Legion of Honor (France).

Aubrey Zidenberg

Dr. Aubrey Zidenberg, 62, is a current director and has served and currently serves as the President and Chief Executive Officer of Casino Amusements Canada, which offers commercial gaming industry experience to both the private sector and governments, since 1976. Dr. Zidenberg is a gaming industry specialist with extensive experience in the development, implementation and operation of international gaming, tourism and entertainment projects since 1975, including, without limitation, in the areas of commercial gaming, operations and regulatory compliance, and has advised and consulted in these areas in both the government and the private sectors. He has worked internationally with companies such as Penn National Gaming, The Bahamas Amusement Corporation, Summa Corporation, Resorts International, Trump Organization, Playboy Casinos, Carnival Hotels & Casinos, Harrah’s and Hard Rock International. Since 2011, Dr. Zidenberg has been an International Vice President of B’nai Brith, an international human rights organization which has operated in Canada since 1875, and currently chairs its Special Advisory Council to the League for Human Rights. Dr. Zidenberg was a Member of the Board of the Responsible Gambling Council of Canada for over 15 years, registered with the Alcohol and Gaming Commission of Ontario and is a recipient of the 2002 Canadian Gaming Industry Award of Excellence. In 2010, Dr. Zidenberg created and developed the First Nation Canadian Gaming Awards program. Dr. Zidenberg is currently the Chair of the York Regional Police – Investigative Services Community Advisory Council and has served in such position since 2013. A noted community leader, Dr. Zidenberg received an Honorary Doctorate of Laws degree from Assumption University in Windsor, Ontario in 2007 for his human rights work, was presented with the Queen Elizabeth II Golden Jubilee Medal in 2003 and the Queen Elizabeth II Diamond Jubilee Medal in 2013, in each case for his dedicated service to community and country, was knighted Chevalier de France in 2012 and received the York Regional Police Service Board 2014 Civic Leadership Award in 2015. Dr. Zidenberg earned a B.A. from York University in 1975.

Record of Attendance of Directors at Board Meetings

The following table sets forth the record of attendance of directors at meetings of the Board, the Audit Committee and the Corporate Governance, Nominating and Compensation Committee, during the year ended December 31, 2014.


Director	Meetings of Directors	Audit Committee	Corporate Governance, Nominating and Compensation Committee
David Baazov	7/7	N/A	N/A
Daniel Sebag	7/7	N/A	N/A
Wesley K. Clark	6/7	3/4	1/2
Divyesh Gadhia	7/7	4/4	2/2
Harlan Goodson	7/7	4/4	2/2
Aubrey Zidenberg⁽¹⁾	4/7	N/A	N/A

Note:

(1)	Dr. Zidenberg became a member of the Board on July 30, 2014.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

Except as disclosed below and to the knowledge of the Corporation, none of the proposed directors of the Corporation is, or within 10 years before the date hereof, has been:

(a)	a director, chief executive officer or chief financial officer of any company (including the Corporation) that

(i)

was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer, or

(ii)

was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;

(b)

(c)	has become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromises with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.

Notwithstanding the foregoing, General Clark (i) ceased to be a director of Adam Aircraft Industries less than one year prior to its filing for Chapter 7 bankruptcy protection under applicable U.S. bankruptcy laws in February 2008; (ii) ceased to be Chairman of Summit Global Logistic Inc. less than one year prior to its filing for Chapter 11 bankruptcy protection under applicable U.S. bankruptcy laws in January 2008 (which was later converted to Chapter 7 status in November 2008); (iii) ceased to be a director of NutraCea Inc. less than one year prior to its filing for Chapter 11 bankruptcy protection under applicable U.S. bankruptcy laws in November 2009; and (iv) ceased to be a director of Rodman & Renshaw LLC less than one year prior to its filing, along with its parent, Direct Markets Holdings Corp., and certain affiliates thereof, for Chapter 7 bankruptcy under applicable U.S. bankruptcy laws in January 2013.

To the knowledge of the Corporation, none of the proposed directors of the Corporation have been subject to:

(a)	any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(b)	any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

C.	Appointment of Auditor

At the Meeting, Shareholders will be asked to approve a resolution to appoint the auditor of the Corporation until the close of the next annual meeting of the Shareholders or its successor is appointed, and to authorize the directors to fix its remuneration.

Effective September 17, 2014, the Corporation accepted the resignation of Richter LLP, Chartered Accountants, Montréal, Québec (“Richter”), as the auditor of the Corporation, and appointed Deloitte LLP, Chartered Accountants, Montréal, Québec (“Deloitte”), as the new auditor of the Corporation. Richter had first been appointed as auditor of the Corporation in 2008.

As required pursuant to National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”), a copy of the complete reporting package, including the Corporation’s notice of change of auditor, dated September 26, 2014, and letters of acknowledgement from each of Richter and Deloitte, dated October 1, 2014 and September 30, 2014, respectively, was filed on SEDAR and is also attached hereto as Schedule “A”. There has been no reportable disagreement between the Corporation and Richter and no qualified opinion or denial of opinion by Richter within the meaning of NI 51-102.

The Board, upon advice of the Audit Committee, unanimously recommends that Shareholders vote IN FAVOUR of the appointment of Deloitte as auditor of the Corporation, to hold office until the close of the next annual meeting of the Shareholders or its successor is appointed, and authorizing the directors to fix its remuneration. The appointment of Deloitte must be approved by a majority of the votes cast on the matter at the Meeting.

If you appoint David Baazov or Daniel Sebag as your proxyholder, your Common Shares will be voted in accordance with your instructions in the form of proxy or voting instruction form or, if no such instructions are given, such proxyholders will vote IN FAVOUR of the appointment of Deloitte as auditor of the Corporation, to hold office until the close of the next annual meeting of the Shareholders or its successor is appointed, and authorizing the directors to fix its remuneration.

D.	Approval of New Equity Incentive Plan and Stock Option Plan Amendment

Background

In 2010, in connection with the initial public offering of the Corporation, the Board adopted the Stock Option Plan as part of the incentive compensation program of the Corporation. The Stock Option Plan is designed to promote the long-term interests of the Corporation and its Shareholders by fostering a proprietary interest in the Corporation among the directors, executives and key employees of the Corporation, and attracting and retaining qualified executives and key employees. At the last annual and special meeting of Shareholders, held on July 30, 2014, the Shareholders passed a resolution approving certain amendments to the Stock Option Plan, including, among other things, changing the Stock Option Plan from a fixed plan to a “10% rolling” plan with respect to the number of Common Shares reserved for issuance thereunder. See “Statement of Executive Compensation – Incentive Plan Awards – Equity-Based Incentive Plans for a summary description of the Stock Option Plan.

Since the initial adoption of the Stock Option Plan in 2010, options issued pursuant to the Stock Option Plan (“Options”) have been exercised to acquire 2,789,161 Common Shares. As at May 13, 2015, Options to acquire 9,413,503 Common Shares have been granted and are outstanding under the Stock Option Plan, representing approximately 7% of the Corporation’s total issued and outstanding Common Shares.

On May 14, 2015, upon a recommendation of the Corporate Governance, Nominating and Compensation Committee, the Board passed a resolution to adopt the New Equity Incentive Plan, subject to, and effective upon, Shareholder approval. The New Equity Incentive Plan will provide flexibility to the Corporation to grant, in addition to stock options, other forms of equity-based incentive awards to attract, retain and motivate qualified directors, employees and consultants of the Corporation and its subsidiaries. Provided that the New Equity Incentive Plan is approved by the Shareholders at the Meeting, all future grants of equity-based awards will be made pursuant to, or as otherwise permitted by, the New Equity Incentive Plan, and the Stock Option Plan will be amended such that no further Options will be granted thereunder as of the date of the Meeting. The Stock Option Plan will remain in effect only in respect of outstanding Options.

The purpose of the New Equity Incentive Plan is to, among other things: (i) provide the Corporation with a mechanism to attract, retain and motivate qualified directors, officers, employees and consultants of the Corporation, including its subsidiaries, (ii) reward directors, officers, employees and consultants that have been granted awards under the New Equity Incentive Plan for their contributions toward the long term goals and success of the Corporation, and (iii) enable and encourage such directors, officers, employees and consultants to acquire shares of the Corporation as long term investments and proprietary interests in the Corporation.

At the Meeting, Shareholders will be asked to consider and, if deemed advisable, pass the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan, the form of which is attached as Schedule “B” to this Information Circular, approving the New Equity Incentive Plan in the form set out at Schedule “D”, the summary terms of which are described below under “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan”, and approving the Stock Option Plan amendment to limit the number of shares issuable thereunder to the number of Options currently outstanding.

As such, the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan will be placed before the Shareholders. This approval of the New Equity Incentive Plan will be effective for three years from the date of the Meeting, at which time unallocated options or awards under the New Equity Incentive Plan must then be resubmitted for approval by the Shareholders. Options previously granted under the Stock Option Plan will continue to be unaffected by the approval or disapproval of the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan, as such Options will remain governed by the Stock Option Plan.

The Board considers the approval of the New Equity Incentive Plan and Stock Option Plan amendment to be in the best interests of the Corporation and its Shareholders and accordingly, the Board unanimously recommends that Shareholders vote IN FAVOUR of the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan. The Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan must be approved by a majority of the votes cast on the matter at the Meeting in order to be adopted.

If you appoint David Baazov or Daniel Sebag as your proxyholder, your Common Shares will be voted in accordance with your instructions in the form of proxy or voting instruction form or, if no such instructions are given, such proxyholders will vote IN FAVOUR of the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan.

Key Terms of the New Equity Incentive Plan

Below is a summary of the key terms of the New Equity Incentive Plan, which is qualified in its entirety by reference to the full text of the New Equity Incentive Plan, attached hereto as Schedule “D”.

Common Shares Subject to the New Equity Incentive Plan

Subject to the adjustment provisions provided for in the New Equity Incentive Plan, including any stock exchange, the total number of Common Shares reserved for issuance pursuant to awards granted under the New Equity Incentive Plan and the Stock Option Plan shall not exceed 10% of the issued and outstanding Common Shares from time to time. To the extent any awards under the New Equity Incentive Plan or the Stock Option Plan are cancelled for any reason prior to exercise in full or are surrendered to the Corporation, except surrenders relating to the payment of the purchase price of any such award or the satisfaction of the tax withholding obligations relating to any such award, the Common Shares subject to such awards (or portion(s) thereof) shall be added back to the number of shares reserved for issuance under the New Equity Incentive Plan. The number of Common Shares issuable to insiders under the New Equity Incentive Plan and all other security-based compensation arrangements cannot exceed 10% of the issued and outstanding Common Shares at any time. The number of Common Shares issued to insiders within any one year period and all other security-based compensation arrangements, including, but not limited to, the New Equity Incentive Plan, cannot exceed 10% of the issued and outstanding Common Shares. Furthermore, the aggregate number of Common Shares issuable to eligible persons who are directors but not otherwise employees of the Corporation, including its subsidiaries, under all of the Corporation’s security based compensation arrangements shall not exceed 1% of the issued and outstanding Common Shares, and within any one financial year of the Corporation, the aggregate fair value

on the date of grant of all awards granted to any director under all of the Corporation’s security based compensation arrangements shall not exceed $100,000; provided that such limits shall not apply to deferred share units granted to a director in lieu of any cash retainer or meeting fees and provided further that deferred share units shall not be included in determining the aggregate fair value on the date of grant of deferred share units granted within any one financial year.

Administration of the New Equity Incentive Plan

The plan administrator of the New Equity Incentive Plan (the “Plan Administrator”) will be determined by the Board, and will initially be the Corporate Governance, Nominating and Compensation Committee, but may in the future be administered by the Board itself or delegated to such other committee as may be established by the Board from time to time. The Plan Administrator will determine which employees, directors, officers or consultants are eligible to receive awards under the New Equity Incentive Plan. In addition, the Plan Administrator will interpret the New Equity Incentive Plan and may adopt administrative rules, regulations, procedures and guidelines governing the New Equity Incentive Plan or any awards granted under the New Equity Incentive Plan as it deems to be appropriate.

Types of Awards

The following types of awards may be made under the New Equity Incentive Plan: stock options, restricted share units, performance share units, deferred share units, restricted shares or other share-based awards. All of the awards described below are subject to the conditions, limitations, restrictions, exercise price, vesting and forfeiture provisions determined by the Plan Administrator, in its sole discretion, subject to such limitations provided in the New Equity Incentive Plan, and will generally be evidenced by an award agreement. In addition, subject to the limitations provided in the New Equity Incentive Plan and in accordance with applicable law, the Plan Administrator may accelerate or defer the vesting or payment of awards, cancel or modify outstanding awards, and waive any condition imposed with respect to awards or Common Shares issued pursuant to awards.

Stock Options

A stock option is a right to purchase Common Shares upon the payment of a specified exercise price as determined by the Plan Administrator at the time the stock option is granted. Subject to certain adjustments and whether the Common Shares are then trading on any stock exchange, the exercise price shall not be less than the highest closing price of the Common Shares on any stock exchange on which the Common Shares are then listed on the date of grant (the “Market Price”). Subject to the discretion of the Plan Administrator, stock options granted under the New Equity Incentive Plan will vest in four equal amounts on a yearly basis over the four years following the grant date. Subject to any accelerated termination as set forth in the New Equity Incentive Plan, each stock option expires on the date that is the earlier of ten years from the date of grant or such earlier date as may be set out in the participant’s award agreement.

Unless otherwise specified by the Plan Administrator at the time of granting a stock option, the exercise notice of such option must be accompanied by payment in full of the purchase price for the Common Shares underlying the options to be purchased. The exercise price must be fully paid by certified cheque, bank draft or money order payable to the Corporation or by such other means as might be specified from time to time by the Plan Administrator, which may include (i) through an arrangement with a broker approved by the Corporation (or through an arrangement directly with the Corporation) whereby payment of the exercise price is accomplished with the proceeds of the sale of Common Shares deliverable upon the exercise of the stock option, (ii) through any cashless exercise process as may be approved by the Plan Administrator, or (iii) such other consideration and method of payment for the issuance of Common Shares to the extent permitted by applicable securities laws, or any combination of the foregoing methods of payment. No Common Shares will be issued or transferred upon the exercise of stock options in accordance with the terms of the grant until full payment therefor has been received by the Corporation.

Restricted Share Units

A restricted share unit is a unit equivalent in value to a Common Share credited by means of a bookkeeping entry in the books of the Corporation which entitles the holder to receive Common Shares after a specified vesting period determined by the Plan Administrator, in its sole discretion. Upon settlement, holders will receive one fully paid and non-assessable Common Share in respect of each vested restricted share unit.

Performance Share Units

A performance share unit is a unit equivalent in value to a Common Share credited by means of a bookkeeping entry in the books of the Corporation which entitles the holder to receive Common Shares based on the achievement of performance goals established by the Plan Administrator over a period of time. The performance goals may be based upon the achievement of corporate, divisional or individual goals, and may be applied relative to performance of an index or comparator group, in each case as determined by the Plan Administrator. The Plan Administrator may modify the performance goals as necessary to align them with the corporate objectives of the Corporation. The performance goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur). Upon settlement, holders will receive fully paid and non-assessable Common Shares in proportion to the number of vested performance share units held and the level of performance achieved.

Restricted Shares

A restricted share is a fully paid and non-assessable Common Share that is subject to restrictions on transfer and a risk of forfeiture for a period of time, and which shall be held by the Corporation or its designee in escrow until such time as the restricted period lapses. The Plan Administrator shall have the authority to determine at the time of grant, in its sole discretion, the duration of the restricted period and other restrictions applicable to the restricted Common Shares. Except for the restrictions applicable to the restricted Common Shares, during the restricted period, the holder shall have all the rights and privileges of a holder of Common Shares as to the restricted Common Shares, including the right to vote.

Deferred Share Units

A deferred share unit is a unit equivalent in value to a Common Share credited by means of a bookkeeping entry in the books of our company which entitles the holder to receive Common Shares on a future date, generally upon termination of service to our company. Upon settlement, holders will receive one fully paid and non-assessable Common Share in respect of each vested deferred share unit.

Other Share-Based Awards

The Plan Administrator may, subject to the provisions of the New Equity Incentive Plan and applicable law, grant other share-based awards to any director, officer, employee or consultant, other than those described above. Such awards are to be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Shares (including securities convertible into Common Shares).

Dividend Equivalents

Restricted share units, performance share units, deferred share units and, if so determined by the Plan Administrator in its discretion, other Common Share-based awards, shall be credited with dividend equivalents in the form of additional restricted share units, performance share units, deferred share units and other share-based awards, as applicable. Dividend equivalents shall vest in proportion to the awards to which they relate. Such dividend equivalents shall be computed by dividing: (i) the amount obtained by multiplying the amount of the dividend declared and paid per Common Share by the number of restricted share units, performance share units and deferred share units, as applicable, held by the participant on the record date for the payment of such dividend, by (ii) the Market Price at the close of the first business day immediately following the dividend record date, with fractions computed to three decimal places.

Black-out Periods

If an award expires during, or within five business days after, a trading black-out period imposed by the Corporation to restrict trades in its securities, then, notwithstanding any other provision of the New Equity Incentive Plan, unless the delayed expiration would result in tax penalties, the award shall expire ten business days after the trading black-out period is lifted by the Corporation.

Terminations

All awards granted under the New Equity Incentive Plan will expire on the date set out in the applicable award agreement, subject to early expiry in certain circumstances, provided that in no circumstances will the duration of an award granted under the New Equity Incentive Plan exceed 10 years from its date of grant.

Termination of Employment or Services

The following table describes the impact of certain events that may, unless otherwise specified by the Plan Administrator at the grant date, lead to the early expiry of awards granted under the New Equity Incentive Plan:


Event		Provisions
For all Participants – in the case of death or disability		• Acceleration of portion of next instalment due to vest • Forfeiture of all remaining unvested awards 30 days after the date of death or disability

Employees

Termination for cause		• Forfeiture of all unvested and vested awards

Termination other than for cause		• Forfeiture of all unvested awards • Exercise of vested options until the earlier of (i) 90 days after termination and (ii) expiry date

Voluntary resignation		• Forfeiture of all unvested awards • Exercise of vested options until the earlier of (i) 90 days after resignation and (ii) expiry date

Consultants

Voluntary resignation or termination due to breach of consulting agreement or arrangement		• Forfeiture of all unvested and vested awards

Termination other than for breach of consulting agreement or arrangement		• Forfeiture of all unvested awards • Exercise of vested options until the earlier of (i) 90 days after termination and (ii) expiry date

Directors – ceasing to hold office other than due to death or disability		• Forfeiture of all unvested awards • Exercise of vested options until the earlier of (i) 90 days following termination and (ii) expiry date

Change in Control

Except as provided in an employment or written agreement, if an employee is terminated within 12 months following a change in control, all awards vest and options may be exercised until the earlier of (i) 90 days after termination and (ii) the expiry date of the option. However, the New Equity Incentive Plan provides that in connection with a change in control, the Plan Administrator may (i) cause awards to be converted or exchanged into or for rights or other securities in any entity participating in or resulting from the change in control, (ii) cause any unvested or unearned awards to become fully vested or earned or free of restriction upon or immediately prior to the occurrence of such change in control, or (iii) replace the awards with other rights. Subject to certain exceptions, a change in control means (i) any transaction pursuant to which a person or group acquires more than 50% of the outstanding Common Shares, (ii) the sale of all or substantially all of the assets or the dissolution of the Corporation, (iii) the acquisition of the Corporation via consolidation, merger, exchange of securities, purchase of assets, amalgamation, statutory arrangement or otherwise, (iv) individuals who comprise the Board at the last annual meeting of Shareholders (the “Incumbent Board”) cease to constitute at least a majority of the Board, unless the election, or nomination for election by the Shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, in which case such new director shall be considered as a member of the Incumbent Board, or (v) such event the Board determines as being a change in control.

Non-Transferability of Awards

Subject to certain exceptions provided under the New Equity Incentive Plan (including the assignment of awards to certain Permitted Assigns (as defined under National Instrument 45-106 Prospectus and Registration Exemptions, as amended from time to time)), and unless otherwise provided by the Plan Administrator, no assignment or transfer of awards granted under the New Equity Incentive Plan, whether voluntary, involuntary, by operation of law or otherwise, is permitted.

Amendments to the New Equity Incentive Plan

The Plan Administrator may also from time to time, without notice and without approval of the holders of voting shares, amend, modify, change, suspend or terminate the New Equity Incentive Plan or any awards granted pursuant thereto as it, in its discretion, determinates appropriate, provided that (i) no such amendment, modification, change, suspension or termination of the New Equity Incentive Plan or any award granted pursuant thereto may materially impair any rights of a holder or materially increase any obligations of a holder under the New Equity Incentive Plan without the consent of such holder, unless the Plan Administrator determines such adjustment is required or desirable in order to comply with any applicable securities laws or stock exchange requirements, and (ii) any amendment that would cause an award held by a Foreign Taxpayer (as such term is defined in the New Equity Incentive Plan) to be subject to the additional tax penalty under Section 409A(1)(b)(i)(II) of the United States Internal Revenue Code of 1986, as amended, shall be null and void ab initio.

Notwithstanding the above, none of the following amendments shall be made to the New Equity Incentive Plan without the approval of the Shareholders:

(a)

increasing the percentage of Common Shares reserved for issuance under the New Equity Incentive Plan, except pursuant to the provisions in the New Equity Incentive Plan which permit the Plan Administrator to make equitable adjustments in the event of transactions affecting the Corporation or its capital;

(b)

increasing or removing the 10% limits on Common Shares issuable or issued to insiders;

(c)

reducing the exercise price of an award except pursuant to the provisions in the New Equity Incentive Plan which permit the Plan Administrator to make equitable adjustments in the event of transactions affecting the Corporation or its capital;

(d)

extending the term of an award beyond the original expiry date (except in connection with a black-out period as described above);

(e)

permitting an award to be exercisable beyond 10 years from the date of grant (except in connection with a black-out period as described above);

(f)

increasing or removing the limits on the participation of non-employee directors;

(g)

permitting awards to be transferred to a person other than a Permitted Assign or for normal estate settlement purposes; or

(h)

deleting or otherwise limiting the amendments which require approval of the Shareholders.

Except for the items listed above, amendments to the New Equity Incentive Plan will not require Shareholder approval. Such amendments include: (i) amending the general vesting provisions or restricted period of an award, (ii) amending the provisions for early termination of awards in connection with a termination of employment or service, (iii) adding covenants of the Corporation for the protection of the participants, (iv) amendments that are desirable as a result of changes in law in any jurisdiction where a participant resides, and (v) curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error.

E.	Approval of Stock Option Plan Amendment

All outstanding Options granted pursuant to the terms of the Stock Option Plan have five-year terms to expiry. Since the initial adoption of the Stock Option Plan in 2010, however, it has been the Corporation’s practice and policy to impose routine and special black-out periods on certain employees and directors during which such individuals are prohibited from trading in securities of the Corporation, which, until a recent revision to the Corporation’s Disclosure,

Confidentiality and Trading Policy, included the exercise of Options (as opposed to only the sale of the underlying Common Shares). Given the Corporation’s business plan, particularly its growth through strategic acquisitions, the Corporation has in recent years imposed numerous special black-out periods. When coupled with routine quarterly black-out periods and other trading restrictions to which its employees and directors may otherwise be subject from time to time, there have been, and continue to be, extensive periods during which such individuals have experienced difficulties, delays or an inability to realize the full or any partial benefit of their respective Options. In acknowledgement of these practical difficulties, and with a desire to maintain an ongoing incentive to its employees and directors, on May 14, 2015, the Board approved an amendment to the Stock Option Plan, conditional upon acceptance by the TSX and approval by Shareholders, to extend the expiry date of all outstanding Options for twenty-four (24) months from their original expiry dates. This extension would be automatic for Canadian Taxpayers, but Foreign Taxpayers (as such terms are defined in the amendment to the Stock Option Plan) must elect to have such extension apply to any or all of their Options by giving written notice to the Corporation of such election prior to the expiry of their Options. In the case of Foreign Taxpayers, the extension would be subject to Board approval.

The following table provides summary information on the impact of such extension on outstanding Options held by directors and officers of the Corporation and its subsidiaries, and other eligible participants under the Stock Option Plan, as at May 13, 2015, in each case assuming the automatic extension for Canadian Taxpayers and the election by all Foreign Taxpayers to have the extension apply to all of their Options.

Grant Date

Number of
Options

Exercise
Price ($)

Current Expiry Date

New Expiry Date

Directors

July 21, 2010

30,000

1.00

July 21, 2015

July 21, 2017

September 4, 2012

37,500

4.20

September 4, 2017

September 4, 2019

January 10, 2013

10,000

4.90

January 10, 2018

January 10, 2020

September 8, 2014

24,000

31.30

September 8, 2019

September 8, 2021

Officers

July 21, 2010

500,000

1.00

July 21, 2015

July 21, 2017

September 13, 2010

50,000

1.30

September 13, 2015

September 13, 2017

January 17, 2011

50,000

2.50

January 17, 2016

January 17, 2018

July 4, 2011

60,000

2.71

July 4, 2016

July 4, 2018

April 26, 2012

90,000

4.20

April 26, 2017

April 26, 2019

July 17, 2012

20,000

4.20

July 17, 2017

July 17, 2019

August 14, 2012

140,000

4.20

August 14, 2017

August 14, 2019

September 4, 2012

350,000

4.20

September 4, 2017

September 4, 2019

November 30, 2012

450,000

4.24

November 30, 2017

November 30, 2019

January 10, 2013

4,875

4.90

January 10, 2018

January 10, 2020

July 16, 2013

83,000

6.05

July 16, 2018

July 16, 2020

December 20, 2013

70,000

7.55

December 20, 2018

December 20, 2020

January 1, 2014

600,000

7.95

January 1, 2019

January 1, 2021

February 26, 2014

80,000

8.43

February 26, 2019

February 26, 2021

August 18, 2014

25,000

28.65

August 18, 2019

August 18, 2021

September 8, 2014

275,000

31.30

September 8, 2019

September 8, 2021

September 12, 2014

65,000

35.05

September 12, 2019

September 12, 2021

October 10, 2014

225,000

27.50

October 10, 2019

October 10, 2021

October 20, 2014

950,000

20.00

October 20, 2019

October 20, 2021

October 25, 2014

50,000

32.83

October 25, 2019

October 25, 2021

Grant Date

Number of
Options

Exercise
Price ($)

Current Expiry Date

New Expiry Date

Other Eligible Participants

July 21, 2010

504,600

1.00

July 21, 2015

July 21, 2017

December 23, 2010

15,000

2.60

December 23, 2015

December 23, 2017

January 17, 2011

22,500

2.50

January 17, 2016

January 17, 2018

May 30, 2011

40,000

3.38

May 30, 2016

May 30, 2018

July 4, 2011

5,000

2.71

July 4, 2016

July 4, 2018

July 14, 2011

160,000

2.85

July 14, 2016

July 14, 2018

September 26, 2011

11,500

2.16

September 26, 2016

September 26, 2018

April 26, 2012

158,700

4.20

April 26, 2017

April 26, 2019

July 9, 2012

40,000

4.20

July 9, 2017

July 9, 2019

July 17, 2012

124,000

4.20

July 17, 2017

July 17, 2019

August 14, 2012

23,000

4.20

August 14, 2017

August 14, 2019

November 30, 2012

251,178

4.24

November 30, 2017

November 30, 2019

December 3, 2012

45,000

4.35

December 3, 2017

December 3, 2019

May 30, 2013

9,375

6.00

May 30, 2018

May 30, 2020

July 16, 2013

27,875

6.05

July 16, 2018

July 16, 2020

September 13, 2013

29,000

6.33

September 13, 2018

September 13, 2020

December 20, 2013

108,500

7.55

December 20, 2018

December 20, 2020

February 26, 2014

62,500

8.43

February 26, 2019

February 26, 2021

August 18, 2014

2,625,900

28.65

August 18, 2019

August 18, 2021

September 8, 2014

16,000

31.30

September 8, 2019

September 8, 2021

October 10, 2014

775,500

27.50

October 10, 2019

October 10, 2021

October 17, 2014

6,500

27.91

October 17, 2019

October 17, 2021

November 10, 2014

35,000

32.91

November 10, 2019

November 10, 2021

January 28, 2015

77,500

32.73

January 28, 2020

January 28, 2022

If the proposed amendment to the Stock Option Plan to provide for a two-year extension of expiry periods is not approved, Options previously granted under the Stock Option Plan will continue to be subject to their respective original expiry terms and the Board will consider alternatives to the proposed amendment.

The Board considers the approval of the amendment to the Stock Option Plan to provide for a two-year extension of expiry dates of outstanding Options to be in the best interests of the Corporation and its Shareholders and accordingly, the Board unanimously recommends that Shareholders vote IN FAVOUR of the Ordinary Resolution to Amend the Stock Option Plan. As required by the TSX, to be effective, the Ordinary Resolution to Amend the Stock Option Plan must be approved by a majority of the disinterested shareholders. For this purpose, votes cast with respect to Common Shares beneficially owned by insiders of the Corporation and their respective associates who hold Options (the “Insider Participants”) will be excluded. To the knowledge of the Corporation, as at May 13, 2015, there were 24,863,599 Common Shares beneficially owned by Insider Participants, in respect of which votes will not be counted for the purposes of the Ordinary Resolution to Amend the Stock Option Plan.

STATEMENT OF EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

General

The responsibility for determining the principles for compensation of executives and other key employees of the Corporation rests with the Board. The Board has established the Corporate Governance, Nominating and Compensation Committee, which takes the principal role in establishing the Corporation’s executive compensation plans and policies. The Corporate Governance, Nominating and Compensation Committee assists the Board in discharging the Board’s oversight responsibilities relating to the compensation and retention of key senior management employees at a fair and competitive compensation, including in establishing appropriate performance incentives. The Corporate Governance, Nominating and Compensation Committee has not to date formally engaged any outside agents to assist in establishing policies or performing any kind of benchmarking or market analysis. Benchmarking or market analysis was conducted internally to ensure that executive compensation is competitive with those found in such benchmarking or analysis. To ensure that the benchmarking includes the most appropriate companies, the Corporate Governance, Nominating and Compensation Committee considers comparable companies, including, but not limited to, companies of a similar size that compete with the Corporation for executives of similar talents and experience.

In 2012, the Corporation used three peer group companies for compensation benchmarking: Multimedia Games Inc., Ainsworth Game Technology Limited and Sportingbet PLC, which trade on the NASDAQ, Australian Securities Exchange and London Stock Exchange respectively. For 2013, the Board reduced total compensation for the Chief Executive Officer and other Named Executive Officers (as defined under “Statement of Executive Compensation – Summary Compensation Table”) and a study was therefore not conducted. In 2014, the base salaries of the Chief Executive Officer, the Chief Financial Officer and of the Executive Vice-President, Corporate Development and General Counsel were increased following the completion of the Rational Group Acquisition, based on the results of compensation benchmarking which included the following companies: 888 Holdings PLC, Ladbrokes Betting & Gaming Ltd., William Hill PLC, Expedia, Inc., NCR Corporation and Bally Technologies, Inc.

The Corporate Governance, Nominating and Compensation Committee currently consists of Mr. Harlan Goodson, General Wesley K. Clark and Mr. Divyesh Gadhia, all of whom are independent directors (as determined based on the standards set forth under “Statement of Corporate Governance Practices – Board”). The members of the Corporate Governance, Nominating and Compensation Committee are experienced in leadership and in dealing with compensation matters by virtue of having previously held senior executive or similar positions requiring direct involvement in establishing compensation philosophies and policies.

The Corporation has adopted a policy restricting its Named Executive Officers (as defined under “Statement of Executive Compensation – Summary Compensation Table”), directors and employees from purchasing financial instruments that are designed to hedge or offset a decrease in market value of equity securities. To the best of management’s knowledge, none of the Named Executive Officers or directors have purchased such financial instruments.

Duties and Responsibilities of the Corporate Governance, Nominating and Compensation Committee

In addition to the corporate governance and nominations duties of the Corporate Governance, Nominating and Compensation Committee, the committee is responsible for, among other things, assisting the Board in discharging its oversight responsibilities relating to the compensation and retention of key senior management employees with the skills and expertise needed to enable the Corporation to achieve its goals and strategies at a fair and competitive compensation, including appropriate performance incentives. These responsibilities include, without limitation; (i) reviewing, assessing and recommending to the Board compensation payable to the Chief Executive Officer and other members of senior management; (ii) reviewing and overseeing the administration of compensation and incentives policies, plans and programs; and (iii) reviewing executive and director compensation disclosure to be made in the Corporation’s management information circulars.

Basis of Executive Compensation

Currently, compensation is based upon an individual’s performance, level of expertise, responsibilities and length of service to the Corporation, with Options issued pursuant to the Stock Option Plan as an incentive for performance and

cash bonuses awarded for contributions to achievement of certain milestones by Amaya and its subsidiaries. At the Meeting, Shareholders will be asked to consider and, if deemed appropriate, approve the New Equity Incentive Plan which would replace, in respect of future grants, the Stock Option Plan. The New Equity Incentive Plan was approved by the Board upon recommendation of the Corporate Governance, Nominating and Compensation Committee, with the objective of providing the Corporation with the flexibility to grant, in addition to stock options, other forms of equity-based incentive awards such as restricted share units, performance share units, deferred share units and other Common Share-based awards as the Board may determine from time to time to eligible participants.

Equity-based compensation allows compensation of participants while providing greater incentives for participants to further develop and promote the success of the Corporation, as well as aligning the interests of participants with those of Shareholders, generally through ownership of Common Shares or equity-based awards. The New Equity Incentive Plan will be used to provide equity-based awards in consideration of the level of responsibility of the executive as well as their impact and contribution to the longer-term operating performance of Amaya. See “Statement of Executive Compensation – Compensation Discussion and Analysis – Equity-Based Awards” and “Statement of Executive Compensation – Incentive Plan Awards – Equity-Based Incentive Plans”.

Structure of Executive Compensation

The Corporation’s executive compensation program has three principal components: base salary, incentive bonuses and equity-based awards.

Base salaries for all employees of the Corporation are established for each position and negotiated with members of executive and senior management, and based on several factors, including industry knowledge, qualifications and previous experience. Both individual and corporate performances are taken into account.

Incentive bonuses, in the form of cash payments, are designed to add a variable component of compensation based on corporate and individual performances for executives and certain employees.

Equity-based awards, under the Stock Option Plan, consist only of Options. The New Equity Incentive Plan, if approved by the Shareholders at the Meeting, will provide for other types of equity-based awards such as restricted share units, performance share units, deferred share units and other Common Share-based awards as the Board may determine, the key terms of which are summarized under “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan – Types of Awards”.

Executive compensation is reviewed by the Board annually. The Corporate Governance, Nominating and Compensation Committee assesses and makes recommendations to the Board with regard to the competitiveness and appropriateness of the compensation packages of the Chief Executive Officer and other executives of the Corporation as well as such other employees of the Corporation or any of its subsidiaries as may be identified to the Committee by the Board.

Corporate objectives considered for the adjustment of executive compensation have been based on achieving certain financial metrics, such as EBITDA targets of the consolidated operations of the Corporation, as well as such other criteria as the Board or the Corporate Governance, Nominating and Compensation Committee may from time to time determine. Personal performance measures have included individual and overall contributions to the business, determined at the discretion of the Corporate Governance, Nominating and Compensation Committee.

Base Salary

Base salaries were determined following an assessment of each executive’s experience, past performance, level of responsibility and importance of the position to the Corporation, individual performance and performance of the Corporation relative to the industry. The Corporate Governance, Nominating and Compensation Committee may recommend the Board to make adjustments to salary levels, if warranted, after an evaluation of factors, including, but not limited to, performance of the executive and of the Corporation, current salary and competitiveness of compensation relative to that paid to individuals holding equivalent positions at comparable companies.

The Corporate Governance, Nominating and Compensation Committee annually reviews and revises the position description of the Chief Executive Officer and recommends annual performance goals and criteria for the Chief

Executive Officer, evaluates the performance of the Chief Executive Officer against such position description and applicable performance goals and criteria and sets the Chief Executive Officer’s level of compensation based on this evaluation.

The Chief Executive Officer may recommend base salary adjustments to the Corporate Governance, Nominating and Compensation Committee for senior executives other than himself. The Corporate Governance, Nominating and Compensation Committee recommends to the Board the base salary adjustment for the Chief Executive Officer and other senior executives taking into consideration past performance and also the long-term goals of the Corporation.

Incentive Bonus

The objective of the annual performance bonus is to reward the executives for reaching strategic objectives and short-term goals. It is designed to encourage the attainment of superior results according to financial objectives approved annually by the Board. Target bonuses are typically expressed as a percentage of base salary and are payable if and when the appropriate goals are met, and in some cases, with set minimum amounts.

The key purpose of incentive bonuses are to (i) align and reward individual contributions to Amaya’s objectives to ensure execution of key elements of Amaya’s business plan, (ii) promote collaboration and teamwork while recognizing individual contributions and accomplishments, and (iii) complement other forms of compensation to remain competitive in Amaya’s industry and with other industries.

The strategic objectives and incentive bonuses for each Named Executive Officer are approved by the Corporate Governance, Nominating and Compensation Committee and may not be identical for any given period.

Risks Associated with the Corporation’s Compensation Policies and Practices

Executive compensation consists of both fixed and variable components. The fixed (or salary) component of compensation is designed to provide a steady income so that executives do not feel pressured to focus exclusively on short term gains, or annual stock price performance which may be to the detriment of long term appreciation and other business metrics. The variable or equity-based awards component of compensation is designed to reward both individual performance and overall corporate performance, as well as promoting alignment of interests between the executives and the Corporation. The Corporation believes that the variable component of compensation is sufficient to motivate executives to achieve short and long term corporate objectives while the fixed element is also sufficient to discourage executives from taking unnecessary or excessive risks in doing so.

Equity-Based Awards

Equity-based compensation allows the Corporation, among other things, to promote the interests of the Corporation and its subsidiaries by (i) providing certain executives and employees of the Corporation with greater incentives to further develop and promote the success of the Corporation and thus create value for its Shareholders, (ii) further aligning the interests of the executives and employees of the Corporation with those of its Shareholders generally through ownership of Common Shares or right to receive Common Shares, and (iii) assisting the Corporation in attracting, retaining and motivating its executives and employees. More specifically, incentive stock options are granted to participants whose skill, performance and loyalty towards the Corporation are vital to its success, image, reputation and activities.

The Corporate Governance, Nominating and Compensation Committee reviews and recommends to the Board compensation policies and processes and any new incentive compensation and equity compensation plans of the Corporation or changes to any such plans, and is responsible for the administration of all incentive and equity compensation plans of the Corporation, subject to applicable policies adopted by the Board. The Corporate Governance, Nominating and Compensation Committee also reviews and approves any performance measures respecting incentive compensation payable to executives and key employees, and makes recommendations to the Board on any performance measures regarding incentive compensation payable to the Chief Executive Officer. Previous grants of incentive stock options may be taken into account by the Corporate Governance, Nominating and Compensation Committee when considering new grants.

Until the date of this Information Circular and until such time as the New Equity Incentive Plan is approved, the Corporation’s grants of equity-based awards to applicable participants and employees were made pursuant to the Stock Option Plan.

As at May 13, 2015, Options to acquire 9,413,503 Common Shares have been granted and are outstanding under the Stock Option Plan and, based on the number of Common Shares issued and outstanding as at the same date, there are 3,965,769 Options unallocated and available for grant under the Stock Option Plan. See “Statement of Executive Compensation – Incentive Plan Awards – Outstanding Share-based Awards and Option-based Awards”.

At the Meeting, Shareholders will be asked to consider, and if deemed advisable, to pass (i) the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan (see “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan”), and (ii) the Ordinary Resolution to Amend the Stock Option Plan (see “Business of the Meeting – Approval of Stock Option Plan Amendment”). If such resolutions are approved, the Corporation will have additional flexibility with respect to equity-based awards and the Stock Option Plan, as amended, will then remain in effect only in respect of outstanding Options, and no further Options will be granted under the Stock Option Plan.

Performance Graph

The Common Shares of the Corporation commenced trading on the TSXV on July 21, 2010 and, effective October 1, 2013, the Corporation graduated from the TSXV to the TSX. The following graph compares the total cumulative return on $100 invested on July 21, 2010 in Common Shares with the total cumulative return on the S&P/TSX Composite Total Return Index, for the period from July 21, 2010 through December 31, 2014.

LOGO

Source: S&P Dow Jones Indices (http://ca.spindices.com/indices/equity/sp-tsx-composite-index)

The trend shown in the performance graph above represents a strong cumulative total shareholder return on an absolute basis and relative to the performance of the index used for comparison. Compensation for the Amaya employees is not tied to the return on Common Shares. Rather, compensation is based upon an individual’s performance, level of expertise, responsibilities and length of service to the Corporation, with equity-based awards granted as an incentive for performance and cash bonuses awarded for contributions to achievement of certain milestones by Amaya and its subsidiaries. Corporate objectives considered for the adjustment of executive compensation have been based on achieving certain financial targets, such as EBITDA targets of the consolidated operations of the Corporation, as well as such other criteria as the Board or the Corporate Governance, Nominating and Compensation Committee may from time to time determine. Personal performance measures include individual and overall contributions to the business.

Summary Compensation Table

The following table provides a summary of the compensation earned by the “Named Executive Officers” of the Corporation, being its President and Chief Executive Officer, its Chief Financial Officer and the three other most highly compensated executive officers of the Corporation, including any of its subsidiaries, who each earned total compensation that exceeded $150,000 in 2014.


Name and principal position	Year		Salary ($)			Share- based awards ($)		Option- based awards⁽¹⁾($)			Non-equity incentive plan compensation ($)				Pension value ($)			All other compensation ($)			Total compensation ($)
Name and principal position	Year		Salary ($)			Share- based awards ($)		Option- based awards⁽¹⁾($)			Annual incentive bonus		Long- term incentive plans		Pension value ($)			All other compensation ($)			Total compensation ($)
David Baazov, President and Chief Executive Officer		2014		583,333	⁽²⁾		—		56,514			—		—		—			—			639,847
		2013		375,000			—		244,897			—		—		—			—			619,897
		2012		337,100			—		—			—		—		—			—			337,100
Daniel Sebag, Chief Financial Officer		2014		445,313	⁽³⁾		—		87,428			—		—		—			—			532,741
		2013		240,000			—		—			—		—		—			—			240,000
		2012		222,200			—		97,959			—		—		—			—			320,159
Marlon D. Goldstein, Executive Vice-President, Corporate Development and General Counsel⁽⁴⁾⁽⁵⁾		2014		386,610			—		1,032,229			220,920		—		—			—			1,639,759
Mauro Franic, Chief Operating Officer, Cadillac Jack, Inc.⁽⁴⁾⁽⁶⁾		2014		278,474			—		131,402			278,011		—		7,130	⁽⁷⁾		—			877,017
		2013		254,128			—		—			254,128		—		6,630	⁽⁷⁾		—			514,886
		2012		234,882			—		504,305			249,875		—		7,350	⁽⁷⁾		1,500,103	⁽⁸⁾		2,496,515
Rafael Ashkenazi, Chief Operating Officer, Rational Group^(9)10)(11)		2014		299,282	⁽¹²⁾		—		156,836	⁽¹³⁾		209,498		—		—			—			665,616

Notes:

(1)

The fair value of each granted Option was determined using the Black-Scholes option pricing model, according to IFRS 2 of the Handbook of the Canadian Institute of Chartered Accountants. The Corporation believes that this method produces a meaningful and reasonable estimate of fair value. The key assumptions used in the Black-Scholes option pricing model for calculating the value of the Options granted are as follows: risk free rate of 1.07 – 2.15% per annum, expected life of 3.25 – 3.75 years, a volatility of 52 – 60% and no dividend yield.

(2)	Effective September 8, 2014, Mr. Baazov’s base salary increased from $375,000 to $1,000,000.

(3)	Effective September 8, 2014, Mr. Sebag’s base salary increased from $375,000 to $600,000.

(4)	Mr. Franic and Mr. Goldstein are paid in United States dollars, therefore each element of their compensation was converted to Canadian dollars using an average exchange rate for the year ended December 31, 2014 of 1.1046.

(5)	Effective January 1, 2015, Mr. Goldstein’s base salary increased from US$350,000 to US$600,000.

(6)

Cadillac Jack, Inc. (“Cadillac Jack”) became a subsidiary of Amaya in November 2012. On March 30, 2015, the Corporation announced that it entered into a definitive agreement to sell Cadillac Jack (the “CJ Sale”) for approximately US$382 million comprising cash consideration of US$370 million, subject to adjustment, and a US$12 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date. Subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions, the Corporation anticipates closing the CJ Sale in 2015.

(7)	These amounts were paid by Cadillac Jack to match certain amounts previously contributed by Mr. Franic under the CJ 401(k) Plan (as defined under “Pension Plan Benefits”).

(8)	This amount represents the aggregate of $613,718 paid as a retention bonus; and $886,385 paid in consideration for non-compete provisions, each paid by Cadillac Jack subsequent to its acquisition by Amaya.

(9)

Rational Group Ltd. (“Rational Group”) became an indirect subsidiary of Amaya in August 2014, upon completion of the acquisition by a wholly-owned subsidiary of the Corporation of Oldford Group Limited (now known as Amaya Group Holdings (IOM) Limited), parent company of Rational Group, the owner and operator of the PokerStars and Full Tilt brands (the “Rational Group Acquisition”), on August 1, 2014.

(10)	Mr. Ashkenazi is paid in British pounds sterling, therefore each element of his compensation was converted to Canadian dollars using an average exchange rate for the year ended December 31, 2014 of 1.819.

(11)	In April 2015, Mr. Ashkenazi left Rational Group and became the Senior Vice President, Strategy for Amaya.

(12)	Mr. Ashkenazi’s base salary for the 2014 fiscal year pursuant to his employment agreement with Rational Group was £394,875. He was entitled to an annual incentive bonus of £276,413 and to other compensation in the aggregate amount of £90,953.

(13)	This grant of Options was approved by the TSX in connection with the Rational Group Acquisition. The exercise price of such Options is equal to a price per share that is lower than the fair market value of the Common Shares at the date of grant.

Employment Agreements

Set forth below are general summaries of the material terms of the employment agreements of each Named Executive Officer, which are qualified in their entirety by the full text of their respective employment agreement.

Employment Agreement of Mr. David Baazov, President and Chief Executive Officer

Pursuant to the terms of his employment agreement, Mr. David Baazov is employed as the Corporation’s Chief Executive Officer for an indefinite term at a base salary of $1,000,000 per annum, and has a target annual bonus opportunity of not less than 50% but not more than 100% of his base salary (or such higher percentage as may be agreed to by Mr. Baazov and the Corporation, and approved by the Board). Any bonus payment is based on satisfaction of performance criteria to be established by the Board, including certain financial targets, such as EBITDA targets of the Corporation, as well as such other criteria as the Board may from time to time decide. Mr. Baazov is also entitled to participate in the Stock Option Plan or any other incentive plan as the Corporation may from time to time adopt. The number and type of awards to which Mr. Baazov is entitled, and the terms and conditions thereof, are determined by the Corporate Governance, Nominating and Compensation Committee in its discretion and in accordance with the Stock Option Plan or any other incentive plan, as applicable. Mr. Baazov’s employment agreement contains standard non-solicitation provisions which survive one year following termination of employment, and standard confidentiality obligations which survive indefinitely.

Employment Agreement of Mr. Daniel Sebag, Chief Financial Officer

Pursuant to the terms of his employment agreement, Mr. Daniel Sebag is employed as the Corporation’s Chief Financial Officer for an indefinite term at a base salary of $600,000 per annum, and has a target annual bonus opportunity of not less than 50% but not more than 100% of his base salary (or such higher percentage as may be agreed to by Mr. Sebag and the Corporation, and approved by the Board). Any bonus payment is based on satisfaction of performance criteria to be established by the Board, including certain financial targets, such as EBITDA targets of the Corporation, as well as such other criteria as the Board may from time to time decide. Mr. Sebag is also entitled to participate in the Stock Option Plan or any other incentive plan as the Corporation may from time to time adopt. The number and type of awards to which Mr. Sebag is entitled, and the terms and conditions thereof, are determined by the Corporate Governance, Nominating and Compensation Committee in its discretion and in accordance with the Stock Option Plan or any other incentive plan, as applicable. Mr. Sebag’s employment agreement contains standard non-solicitation provisions which survive one year following termination of employment, and standard confidentiality obligations which survive indefinitely.

Employment Agreement of Mr. Marlon D. Goldstein, Executive Vice President, Corporate Development and General Counsel

Mr. Marlon D. Goldstein is the Executive Vice President of Corporate Development and General Counsel of the Corporation and his employment agreement is for an initial term of five years, automatically renewing for subsequent one year terms, unless sooner terminated in accordance with the terms therein, at a base salary of US$600,000 per annum. Mr. Goldstein has as a target annual bonus opportunity of up to 100% of his base salary (or such higher percentage as may be agreed to by Mr. Goldstein and the Corporation, and approved by the Board). Any bonus payment is based on satisfaction of performance criteria to be established by the Board, including certain financial targets, such as EBITDA targets of the Corporation, as well as such other criteria as the Board may from time to time decide. Pursuant to his employment agreement, Mr. Goldstein received 600,000 Options in January 2014, and an additional award of 200,000 Options in September 2014. Mr. Goldstein is also entitled to be granted additional equity-based awards under the Stock Option Plan or any other incentive plan as the Corporation may from time to time adopt. The number and type of awards to which Mr. Goldstein is entitled, and the terms and conditions thereof, are determined by the Corporate Governance, Nominating and Compensation Committee in its discretion and in accordance with the Stock Option Plan or any other incentive plan, as applicable, provided that all options to purchase Common Shares granted to Mr. Goldstein shall vest in accordance with the vesting schedule set out in his employment agreement. Mr. Goldstein’s employment agreement contains non-solicitation provisions which survive one year following termination of employment, and confidentiality obligations which survive indefinitely.

Employment Agreement of Mr. Mauro Franic, Chief Operating Officer, Cadillac Jack

Pursuant to the terms of his employment agreement, Mr. Mauro Franic is employed as Cadillac Jack’s Chief Operating Officer for a term of five years, automatically renewing for subsequent one year terms, unless sooner terminated in accordance with the terms therein, at a base salary of US$235,000 per annum and is eligible for an annual bonus of up to 100% of his base salary. Any bonus payment is within the sole discretion of the Board and is based upon a review of Mr. Franic’s performance, Cadillac Jack’s performance, and is linked to EBITDA targets of Cadillac Jack, as well as such other criteria as the Board may from time to time decide. Mr. Franic is also entitled to participate in the Stock Option Plan and is entitled to additional Option grants for as long as he remains actively employed by Cadillac Jack (and excluding any notice period). Such Options shall have an exercise price determined in accordance with the Stock Option Plan. Mr. Franic’s employment agreement contains non-competition and non-solicitation provisions which survive two years following termination of employment, and confidentiality obligations which survive termination of the employment agreement.

Employment Agreement of Mr. Rafael Ashkenazi, Chief Operating Officer, Rational Group

Pursuant to the terms of his employment agreement, Mr. Rafael Ashkenazi is employed as Rational Group’s Chief Operating Officer for a term of two years, automatically renewing for subsequent one year terms, unless terminated by either Mr. Ashkanezi or Rational Group upon a six month prior notice, or unless sooner terminated in accordance with the terms of his employment agreement. Mr. Ashkenazi’s base salary is set at £394,875 per annum, and he is eligible to participate in Rational Group’s discretionary performance-based cash bonus scheme based on individual and company performance. Pursuant to his employment agreement, Mr. Ashkenazi received, upon completion of the Rational Group Acquisition, 225,000 Options at an exercise price of $20, subject to the terms and conditions set forth in the Stock Option Plan and Mr. Ashkenazi’s Option grant agreement. Mr. Ashkenazi is also entitled to participate in the Stock Option Plan or any other incentive plan as Rational Group may adopt, and is entitled to additional grants of equity-based securities on an annual basis as determined by the compensation committee of Rational Group, the whole in accordance with the Stock Option Plan or any other incentive plan pursuant to which such grants are made. Although Mr. Ashkenazi is eligible to participate in Rational Group’s pension scheme, he has elected not to do so, and receives an “investment allowance” equal to an aggregate amount of 7% of his annual base salary, payable monthly, in lieu thereof pursuant to applicable law and subject to applicable taxes. The employment agreement of Mr. Ashkenazi contains standard non-competition and non-solicitation provisions which respectively survive six months and one year following termination of employment, and standard confidentiality obligations which survive indefinitely. In April 2015, Mr. Ashkenazi left Rational Group and became the Senior Vice President, Strategy at Amaya.

Termination and Change of Control Benefits

In addition to standard termination provisions, including upon death or disability, the terms of the employment agreement of each of the Chief Executive Officer, the Chief Financial Officer and the Executive Vice-President, Corporate Development and General Counsel of the Corporation stipulate that their respective employment may be terminated at any time for cause, upon a decision of the Board made at a duly called meeting to which the concerned executive was invited. Each employment agreement also provides that such executive may terminate his employment with the Corporation after providing the Corporation with 30-days’ prior written notice. If the Corporation terminates the employment of Mr. Baazov, Mr. Sebag or Mr. Goldstein without cause (as such term is defined in their respective employment agreements), or if any of Mr. Baazov, Mr. Sebag or Mr. Goldstein terminates his employment with the Corporation for good reason (as such term is defined in their respective employment agreements), such executive will be entitled to receive (i) an amount equal to three (3) times his annual base salary, plus the higher of (A) the bonus to which he was eligible for any of the three (3) preceding fiscal years, or (B) the actual bonus paid to him for any of the three (3) preceding fiscal years, and (ii) 100% of the then-unvested equity awards held by such executive will immediately vest (provided that if an outstanding equity award is to vest based on the achievement of performance criteria, then such equity award will vest as to 100% of the amount of the equity award assuming the relevant performance criteria had been achieved at the highest applicable target levels for the relevant performance period(s)) (collectively, the “Termination Benefits”).

The terms of the employment agreement of Mr. Franic, the Chief Operations Officer of Cadillac Jack, stipulate that his employment may be terminated at any time for cause (as such term is defined in his employment agreement), and that he may himself terminate his employment with the Corporation provided he gives thirty (30) days prior notice. If the

Corporation terminates the employment of Mr. Franic without cause, or if Mr. Franic terminates his employment with the Corporation for good reason (as such term is defined in his employment agreement), Mr. Franic will be entitled to receive an amount equal to one and one half (1.5) times his annual base salary for the immediately preceding fiscal year.

The terms of the employment agreement of Mr. Ashkenazi in his capacity as former Chief Operations Officer of Rational Group, provide that after the expiration of the initial two year term, his employment may be terminated by Rational Group upon a six month prior notice, provided that Rational Group can also terminate Mr. Ashkenazi’s employment at any time by paying to Mr. Ashkenazi an amount equal to one half (0.5) times his annual base salary in lieu of any required notice period, plus any accrued benefits and the pro rata portion of any bonus to which Mr. Ashkenazi was entitled for the preceding year. Rational Group can also terminate Mr. Ashkenazi’s employment in connection with the occurrence of, or pursuant to, certain cause-related events set out in his employment agreement.

If the employment of Mr. Baazov, Mr. Sebag or Mr. Goldstein is terminated in connection with a change of control of the Corporation, such executive will be entitled to receive the same Termination Benefits provided if terminated without cause. If the employment of Mr. Franic is terminated in connection with a change of control of Cadillac Jack, (i) his Options that are scheduled to vest on November 30, 2015, to the extent unvested, shall vest and become immediately exercisable, and (ii) his Options that are scheduled to vest on November 30, 2016, to the extent unvested, shall vest and become exercisable on November 30, 2015. Mr. Ashkenazi’s employment agreement is silent with respect to the effect of termination in connection with a change of control. A “change of control”, for the purpose of such employment agreements, generally means the occurrence of (a) an amalgamation, arrangement, merger, takeover bid, consolidation or other transaction as a result of which the Corporation is not the surviving or continuing corporation or entity (subject to certain exceptions, including transactions with wholly-owned subsidiaries, and transactions in which there is no substantial change in the Shareholders and the outstanding Options are assumed or replaced by the successor or continuing corporation); (b) a dissolution or liquidation of the Corporation; (c) the sale of all or substantially all of the assets of the Corporation; (d) a business combination (going private transaction); or (e) any other transaction or series of related transactions which does not result in the Shareholders immediately prior to such transaction or series of related transactions holding 50% or more of the voting power of the surviving or continuing entity following such transaction or series of related transactions.

If the employment of any of the Named Executive Officers is terminated without cause, his right to exercise any vested stock Options granted under the Stock Option Plan ends on the 90^th day following the date when they ceased being in active services or employment with the Corporation. If their employment is terminated with cause, any Options granted under the Stock Option Plan will be deemed to have been cancelled immediately on the date in which they are required to stop reporting to work. For the treatment of equity-based awards granted under the New Equity Incentive Plan in similar circumstances, if such plan is approved by the Shareholders at the Meeting, see “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment”.

The following table sets out the amounts that would have been payable to the Named Executive Officers as of December 31, 2014 had their employment been terminated by the Corporation for reasons other than for cause (or, in the case of Mr. Ashkenazi, for reasons other than those cause-related events set out in his employment agreement).


Name		Severance ($)
David Baazov		3,000,000
Daniel Sebag		1,800,000
Marlon D. Goldstein		1,988,280
Mauro Franic		417,711
Rafael Ashkenazi		610,536

Incentive Plan Awards

Outstanding Share-based Awards and Option-based Awards

The following table sets forth information concerning all awards outstanding as of December 31, 2014 for each Named Executive Officer under the Stock Option Plan. There is no share-based award plan offered strictly to executive officers.


Name	Option-based Awards								Share-based Awards
Name	Number of securities underlying unexercised Options (#)		Option exercise price ($)			Option expiration date	Value of unexercised in-the-money Options⁽¹⁾ ($)		Number of shares or units of shares that have not vested (#)		Market or payout value of share-based awards that have not vested ($)		Market or payout value of vested share-based awards not paid out or distributed ($)
David Baazov,		250,000		4.20		September 4, 2017		6,087,500		—		—		—
President and Chief Executive Officer		200,000		1.00		July 21, 2015		5,510,000		—		—		—
Daniel Sebag, Chief Financial Officer		75,000		31.30		September 8, 2019		—		—		—		—
		100,000		4.20		September 4, 2017		2,435,000
		300,000		1.00		July 21, 2015		8,265,000		—		—		—
Marlon D. Goldstein,		200,000		31.30		September 8, 2019		—		—		—		—
Executive Vice-President, Corporate Development and General Counsel		600,000		7.95		January 1, 2019		12,360,000		—		—		—
Mauro Franic, Chief Operating Officer, Cadillac Jack		300,000		4.24		November 30, 2017		7,293,000		—		—		—
Rafael Ashkenazi, Chief Operating Officer, Rational Group		225,000		20.00	⁽²⁾	October 20, 2019		1,923,750		—		—		—

Notes:

(1)	These amounts are calculated based on the difference between the closing price of Common Shares on the TSX of $28.55 on December 31, 2014 and the exercise price of the respective Options.

(2)	This grant of Options was approved by the TSX in connection with the Rational Group Acquisition. The exercise price of such Options is equal to a price per share that is lower than the fair market value of the Common Shares at the date of grant.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth information for each Named Executive Officer concerning the value vested of the options-based awards during the year ended December 31, 2014, as if such Options were exercised by the particular Named Executive Officer as of each respective vesting date during such period.


Name	Option-based awards Value vested during the year ($)⁽¹⁾		Share-based awards Value vested during the year ($)		Non-equity incentive plan compensation Value vested during the year ($)
David Baazov, President and Chief Executive Officer		1,687,500		—		—
Daniel Sebag, Chief Financial Officer		675,000		—		—
Marlon D. Goldstein, Executive Vice-President, Corporate Development and General Counsel		4,406,250		—		—
Mauro Franic, Chief Operations Officer, Cadillac Jack		3,450,000		—		—
Rafael Ashkenazi, Chief Operating Officer, Rational Group		—		—		—

Note:

(1)	These amounts are calculated based on the difference between the closing price of Common Shares on the TSX on the respective vesting dates during the year ended December 31, 2014 and the exercise price of the respective Options as if such options had been exercised on such vesting dates.

Equity-Based Incentive Plans

At the Meeting, Shareholders will be asked to approve (i) the Ordinary Resolution to Approve the New Equity Incentive Plan and Amend the Stock Option Plan (see “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan”), and (ii) the Ordinary Resolution to Amend the Stock Option Plan (see “Business of the Meeting – Approval of Stock Option Plan Amendment”). If such resolutions are approved, future grants of equity-based awards by the Corporation will from then on be made pursuant to the New Equity Incentive Plan only, and the Stock Option Plan, as amended, will remain in effect exclusively in respect of outstanding Options granted thereunder.

The Stock Option Plan

Pursuant to the Stock Option Plan, the Board may, from time to time, in its discretion, and in accordance with the requirements of the TSX, grant non-transferable Options to purchase Common Shares. The Stock Option Plan is a “10% rolling” stock option plan pursuant to which unallocated Options thereunder must be re-approved by Shareholders by ordinary resolution every three years. Set forth below is a summary of certain key terms of the Stock Option Plan.

Eligibility

All directors, officers, employees and consultants of the Corporation or any of its subsidiaries are eligible to receive Options under the Stock Option Plan. The aggregate number of Common Shares issued to insiders of the Corporation within any one year period, or issuable to insiders of the Corporation at any time, under all security-based compensation arrangements of the Corporation, may not exceed 10% of the total number of issued and outstanding Common Shares of the Corporation at such time. The number of Common Shares that are, at any time, issuable within any 12-month period under the Stock Option Plan on the exercise of Options or pursuant to other security-based compensation arrangements of the Corporation, (i) to any one participant shall not exceed 5% of the then issued and outstanding Common Shares of the Corporation, (ii) to any consultant shall not exceed 2% of the then issued and outstanding Common Shares of the Corporation, and (iii) to any employee conducting investor relations activities shall not exceed an aggregate of 2% of the then issued and outstanding Common Shares of the Corporation to all employees conducting investor relations activities.

Term, Vesting and Exercise Price of Options

Options granted under the Stock Option Plan may have a term of up to five years. The exercise price of the Options is fixed at the date of grant and is based on the closing price of the Common Shares on the TSX on the day prior to the date of grant. Generally, and unless otherwise determined by the Board in its discretion, Options vest in equal annual amounts on each of the first, second, third and fourth anniversaries of the date of grant.

Termination of Options

If an optionee ceases to be in active employment or service with the Corporation or one of its subsidiaries (for any reason other than death, disability or termination for cause), the rights of such optionee to exercise any vested Options granted to him or her under the Stock Option Plan shall cease on the ninetieth (90^th) day following the date when such optionee ceased to be in active employment or service with the Corporation or any of its subsidiaries, provided that, within such ninety (90) day period, the optionee may only exercise such Options to the extent that he or she was entitled to exercise them on the day immediately preceding the date he or she ceased to be in active employment or service with the Corporation or one of its subsidiaries.

If an optionee is terminated for cause, such optionee’s right to exercise any Options granted to him or her under the Stock Option Plan shall be deemed to have ceased and the Options shall be deemed to have been cancelled on the day immediately preceding the earlier of the date on which the Corporation gives the participant notice of his termination or the date on which the Corporation requires the participant to stop reporting to work.

Upon the death of an optionee, all unvested Options shall vest immediately provided that such optionee was in active employment or service with the Corporation or under disability at the time of such death. Any Options granted to such optionee under the Stock Option Plan will be exercisable for a period of up to one year following death. In the event of the disability of an optionee, any Options granted to such optionee under the Stock Option Plan will continue to vest and all vested Options will be exercisable in accordance with the terms of such Options.

Upon the occurrence of a “change of control” event (as defined in the Stock Option Plan), at the option of the Corporation, any or all outstanding Options may be assumed by the successor or continuing entity (if any), or the successor or continuing entity may provide substantially similar consideration to optionees as was provided to Shareholders at the time of the occurrence of the “change of control”. In the event that the successor or continuing entity refuses to assume or substitute any outstanding Options, the Corporation will so notify the optionees in writing and the optionees will have ten (10) business days following the date of such notice was given to exercise the vested Options as at the date of such notice, failing which such vested Options will be deemed to expire. Notwithstanding the foregoing, (i) in the case of a takeover bid, the optionees may elect to exercise all or any of the Options (whether vested or not at the time) for the purposes of tendering such Common Shares under such formal bid, and (ii) in the case of a business combination (going private transaction), the Corporation may terminate, subject to the completion of such business combination, all of the then outstanding Options by giving at least ten (10) days prior written notice of such termination to each of the optionees and paying to each of the optionees at the time of the completion of the business combination an amount equal to the fair market value of the Options.

Amendment and Termination of the Stock Option Plan

Subject to applicable law, the Board may at any time suspend or terminate the Stock Option Plan, provided that no such termination may cause prejudice to any Options granted prior to the termination of the Stock Option Plan. The Board may at any time and from time to time amend the Stock Option Plan to, among other things, (i) amend the eligibility criteria and the limits for participating in the Stock Option Plan; (ii) amend the conditions for granting and exercising Options; (iii) make additions, amendments or deletions to the Stock Option Plan in order to comply with the legislation governing the Stock Option Plan or the requirements of a regulatory body or stock exchange; (iv) correct or rectify any ambiguity, incorrect stipulation or omission in the text of the Stock Option Plan; (v) make any amendments in respect of the administration of the Stock Option Plan; (vi) amend the vesting provisions of the Stock Option Plan or any Option; (vii) amend the content of a grant agreement; (viii) amend the conditions governing the cancellation of Options; (ix) amend the conditions for the adjustment of Options; (x) amend the provisions governing the tax treatment of Options granted; or, (xi) amend the provisions regarding the legislation applicable to the Stock Option Plan.

Notwithstanding the foregoing, shareholder approval is required for the following amendments to the Stock Option Plan: (i) amendments to increase the maximum number of Common Shares issuable pursuant to the exercise of Options; (ii) any reduction in the exercise price or a cancellation of Options; (iii) an extension to the term of an Option;

(iv) an amendment allowing introduction or re-introduction of non-employee directors on a discretionary basis; and (v) amendments that would permit any optionee to transfer or assign their Options other than for ordinary estate settlement purposes.

The New Equity Incentive Plan

For a summary of the key terms of the New Equity Incentive Plan, see “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan”. A copy of the New Equity Incentive Plan is appended to this Information Circular as Schedule “D”.

Pension Plan Benefits

The Corporation had no deferred compensation plans or pension plans, defined contribution or otherwise, in place at any time during the year ended December 31, 2014. However, Mr. Franic participates in the Cadillac Jack 401(k) plan, effective January 1, 2002, as amended on July 1, 2014 (the “CJ 401(k) Plan”), pursuant to which he, along with other eligible employees of Cadillac Jack, is entitled to certain benefits. Although Mr. Ashkenazi is eligible to participate in Rational Group’s pension scheme, he has elected not to do so, and receives an “investment allowance” equal to an aggregate amount of 7% of his annual base salary, payable monthly, in lieu thereof pursuant to applicable law and subject to applicable taxes.

The CJ 401(k) Plan was adopted by Cadillac Jack to provide certain employees with the opportunity to save for retirement on a tax-advantaged basis. All employees of Cadillac Jack, other than (i) union employees whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining, (ii) certain non-resident employees who have no earned income from sources within the United States, and (iii) leased employees, are eligible to participate in the CJ 401(k) Plan. Eligible participants in the CJ 401(k) Plan may elect to contribute a portion of their compensation (generally defined as a participant’s total compensation that is subject to income tax and paid to such participant by Cadillac Jack during a relevant year) to the CJ 401(k) Plan, and Cadillac Jack may also make contributions to the CJ 401(k) Plan on behalf of eligible participants, subject to certain limits imposed by applicable law. The following types of contributions may be made under the CJ 401(k) Plan: (i) employee salary deferrals, whereby an eligible participant may elect to reduce his or her compensation by a specific percentage or dollar amount and have that amount contributed to the CJ 401(k) Plan on a pre-tax basis as a salary deferral, (ii) employee rollover contributions, whereby an eligible participant may be permitted, at the discretion of Cadillac Jack, to deposit into the CJ 401(k) Plan distributions received by such participant from other retirement plans and certain individual retirement accounts on a “rollover” basis, which may result in tax savings for such participant, and (iii) employer matching contributions, whereby Cadillac Jack may make discretionary matching contributions equal to a uniform percentage of an eligible participant’s salary deferrals, which percentage is determined by Cadillac Jack annually. The aggregate amount of contributions that may be made to a participant’s account during the 2014 fiscal year could not exceed the lesser of $52,000 or 100% of such participant’s annual compensation (provided that the recognized annual compensation in respect of a participant for the purpose of the CJ 401(k) plan is capped, by law, at $260,000 for the 2014 fiscal year). Employer matching contributions are subject to a vesting schedule which is based on participants’ years of services with Cadillac Jack.

In case of termination of a participant’s employment with Cadillac Jack for reasons other than death, disability or retirement at normal retirement age (being 65 years old in the case of the CJ 401(k) Plan), such participant will be entitled to receive only the vested portion of its account balance in the CJ 401(k) Plan. Upon termination of a participant’s employment with Cadillac Jack on or after normal retirement age, or in the event of termination due to disability, all amounts in such terminated participant’s account in the CJ 401(k) Plan will become fully vested and will be distributed to the participant as of the date of termination. If a participant remains employed after having attained the normal retirement age, he or she can often defer the receipt of benefits until his or her actual termination of employment, but generally not later than age 70¹⁄₂. In the event of death of a participant while such participant was still employed by Cadillac Jack, the aggregate of such participant’s account balance in the CJ 401(k) Plan will be distributed to such participant’s beneficiary (as determined in accordance with the CJ 401(k) Plan) as a death benefit. All distributions from the CJ 401(k) Plan are made in a single lump-sum payment to the participant (or, in the event of a distribution upon death, to the participant’s beneficiary), provided that participants may, subject to certain conditions, delay the distribution of their vested account balance.

Participants in the CJ 401(k) Plan are not entitled to assign their interest, including any vested interest, in their CJ 401(k) Plan account. Cadillac Jack has the right to terminate the CJ 401(k) Plan at any time, in which case no further contributions will be made to the CJ 401(k) Plan and all amounts credited to participants’ accounts will become 100% vested and will be distributed to participants as soon as practicable.

The following table presents certain statutory information regarding the benefits received by Mr. Franic pursuant to the CJ 401(k) Plan for the year ended December 31, 2014:

Name

Accumulated value

at start of year

(US$)

Compensatory

(US$)

Accumulated value

at year end

(US$)

Mauro Franic,

Chief Operating Officer,

Cadillac Jack, Inc.

7,130

17,500

DIRECTOR COMPENSATION

Director Compensation Table

The following table sets forth information concerning all amounts of compensation provided to the directors of the Corporation who are not members of the management of the Corporation for the year ended December 31, 2014.


Name	Fees earned ($)		Share-based awards ($)		Option-based awards⁽¹⁾ ($)		Non-equity incentive plan compensation ($)		Pension value ($)		All other compensation ($)		Total ($)
Wesley K. Clark		54,277		—		9,308		—		—		—		63,585
Aubrey Zidenberg		45,702		—		10,533								56,235
Divyesh Gadhia		54,277		—		9,308		—		—		—		63,585
Harlan Goodson		59,445		—		9,308		—		—		—		68,753

Note:

(1)

The fair value of each granted Option was determined using the Black-Scholes option pricing model, according to IFRS 2 of the Handbook of the Canadian Institute of Chartered Accountants. The Corporation believes that this method produces a meaningful and reasonable estimate of fair value. The key assumptions used in the Black-Scholes option pricing model for calculating the value of the Options granted are as follows: risk free rate of 1.07 - 2.15% per annum, expected life of 3.25 - 3.75 years, a volatility of 52 - 60% and no dividend yield.

Narrative Discussion

From January 1, 2014 until September 8, 2014, the annual retainers for the non-management directors remained unchanged at $45,000, with the Chairman of the Audit Committee receiving an annual retainer of $52,500. In addition, for the same time period, each non-management director was entitled to a fee of $1,250 for each meeting of the Board or each committee which they attended in person and $625 for meetings of the Board or committee which they attended telephonically. As of September 8, 2014, however, the Corporation increased the annual retainers for all non-management directors to $75,000 and no additional fees were paid to the directors for attendance at meetings, whether in person or telephonically. Additional fees may, however, be paid to the directors of the Corporation in connection with certain specific projects or mandates, namely in connection with assisting the Corporation, in their capacity as directors, with gaming regulatory and certain other corporate compliance matters. For example, Mr. Goodson, in his capacity as a director, also serves on the compliance committee of the Corporation, a committee charged with overseeing all aspects of compliance with gaming regulatory and certain other corporate compliance matters (the “Compliance Committee”), as well as one of the Corporation’s wholly-owned subsidiary’s compliance committee. All directors are entitled to be reimbursed for reasonable travel expenses incurred with respect to their attendance at meetings of the Board. Furthermore, each director is eligible to receive Options under the Stock Option Plan.

During the year ended December 31, 2014, the Corporation granted each of Messrs. Clark, Gadhia and Goodson Options to purchase up to 6,000 Common Shares and granted Dr. Zidenberg Options to purchase up to 16,000 Common Shares. The aggregate cash compensation paid to the directors of the Corporation for services rendered in their capacities as directors during the financial year ended December 31, 2014, was $213,701.

The Corporate Governance, Nominating and Compensation Committee recommends director compensation levels to the Board, including compensation to be paid to the Chair of the Board and those acting as committee chairs, and shall set compensation levels that adequately reflect the applicable responsibilities being assumed.

Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth information concerning all awards outstanding as of December 31, 2014 for each individual who acted as director of the Corporation but who was not a member of the management of the Corporation for the year ended December 31, 2014.


Name	Option-based Awards							Share-based Awards
Name	Number of securities underlying unexercised Options (#)		Option exercise price ($)		Option expiration date	Value of unexercised in-the-money Options⁽¹⁾ ($)		Number of shares or units of shares that have not vested (#)		Market or payout value of share-based awards that have not vested ($)		Market or payout value of vested share-based awards not paid out or distributed ($)
Wesley K. Clark		6,000		31.30	September 8, 2019		—		—		—		—
		12,500		4.20	September 4, 2017		304,375		—		—		—
		10,000		1.00	July 21, 2015		275,500		—		—		—
Aubrey Zidenberg		6,000		31.30	September 8, 2019		—
Aubrey Zidenberg		10,000		4.90	January 10, 2018		236,500
Divyesh Gadhia		6,000		31.30	September 8, 2019		—		—		—		—
		12,500		4.20	September 4, 2017		304,375		—		—		—
		10,000		1.00	July 21, 2015		275,500		—		—		—
Harlan Goodson		6,000		31.30	September 8, 2019		—		—		—		—
		12,500		4.20	September 4, 2017		304,375		—		—		—
		10,000		1.00	July 21, 2015		275,500		—		—		—

Note:

(1)	These amounts are calculated based on the difference between the closing price of Common Shares on the TSX of $28.55 on December 31, 2014 and the exercise price of the respective Options.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth information for each individual who acted as director of the Corporation but who was not a member of the management of the Corporation concerning the value vested of the options-based awards during the year ended December 31, 2014.


Name	Option-based awards Value vested during the year⁽¹⁾ ($)	Non-equity incentive plan compensation Value vested during the year ($)
Wesley K. Clark	84,375	—
Aubrey Zidenberg	7,075	—
Divyesh Gadhia	84,375	—
Harlan Goodson	84,375	—

Note:

(1)	These amounts are calculated based on the difference between the closing price of Common Shares on the TSX on the respective vesting dates during the year ended December 31, 2014 and the exercise price of the respective Options as if such Options had been exercised on such vesting dates.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The table below summarizes information in relation to the Common Shares reserved for issuance under the Stock Option Plan as of December 31, 2014. The Stock Option Plan is the only equity-based incentive plan of the Corporation under which equity securities are currently authorized for issuance. At the Meeting, Shareholders will be asked to consider, and if deemed advisable, to approve the New Equity Incentive Plan, the key terms of which are summarized in this Information Circular under “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan”, along with the proposed amendment to the Stock Option Plan in connection therewith, and the other proposed amendments to the Stock Option Plan, the details of which are provided under “Business of the Meeting – Approval of Stock Option Plan Amendment”.


Plan	Number of securities to be issued upon exercise of outstanding Options	Weighted average exercise price of outstanding Options	Number of securities remaining available for future issuance under the Stock Option Plan (excluding securities reflected in the first column)⁽¹⁾
Stock Option Plan	9,428,905	$16.76	3,924,499

Note:

(1)	This amount does not take into account the amount of Common Shares that will be reserved for issuance under the New Equity Incentive Plan upon approval thereof by the Shareholders at the Meeting.

DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE

The Corporation has purchased a directors’ and officers’ liability insurance policy with an annual aggregate limit of $150,000,000 (the “Primary Liability Policy”) as well as $70,000,000 of additional coverage in excess of the Primary Liability Policy, as well as primary coverage for certain exclusions contained in the Primary Liability Policy for itself, any of its subsidiaries and its and their directors and officers. The premium paid by the Corporation in the financial year ended December 31, 2014, in respect of the directors and officers of the Corporation as a group was $1,440,000. No part of the premium was paid by any director or officer. The deductible in respect of any claim ranges from $0 to $1,000,000 depending on the nature of the claim.

Moreover, the Corporation has entered into indemnification agreements with its directors and officers for liabilities and costs in respect of any action or suit against them in connection with the execution of their duties, subject to customary limitations prescribed by applicable law.

The Corporate Governance, Nominating and Compensation Committee is responsible for assessing the directors and officers insurance policy of the Corporation and making recommendations to the Board for its renewal or amendment or the replacement of the insurer.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

As of May 14, 2015, no executive officer, director, proposed nominee for election as a director or employee, former or present, of the Corporation was indebted to the Corporation including in respect of indebtedness to others where the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement provided by the Corporation.

MANAGEMENT CONTRACTS

Management functions of the Corporation and its subsidiaries are not, to any degree, performed by a person or persons other than the directors or executive officers of the Corporation or its subsidiaries.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

To the Corporation’s knowledge, no material transaction involving the Corporation or any of its subsidiaries has been entered into since the beginning of the Corporation’s most recently completed financial year, or are proposed to be entered into, in which any director or executive officer of the Corporation, or any person who beneficially owns, or controls or directs, directly or indirectly, more than 10% of the Common Shares or any director or executive officer of such persons or of any subsidiary of the Corporation or any proposed director of the Corporation and each of their associates or affiliates has had or expects to have a direct or indirect material interest.

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

The Board is of the view that maintaining effective corporate governance practices is an important factor which contributes to the general success of the Corporation. The Board has adopted specific policies regarding corporate governance, including without limitation a mandate for the Board (the “Board Mandate”), and charters for each of its committees, position descriptions for the roles of Chief Executive Officer, Chair of the Board and Lead Director, a code of business conduct, corporate governance guidelines, and a whistleblower policy. A copy of the Board Mandate is also appended as Schedule “C”. Copies of the Board Mandate, the charters for the Board committees as adopted and amended from time to time, the position descriptions for the roles of Chief Executive Officer, Chair of the Board and Lead Director and the corporate governance guidelines, as these are adopted and amended from time to time, as well as such other policies that may be adopted by the Corporation from time to time, may be, in each case as required by applicable law or as the Corporation otherwise determines, available on the Corporation’s website at www.amaya.com, and the disclosure provided under this section of this Information Circular pertaining to these matters, is qualified in its entirety by reference to the full text thereof.

Board

Pursuant to the Board Mandate, the Board is to be constituted at all times of a majority of individuals who meet or exceed the independence requirements of the NASDAQ Stock Market LLC (the “NASDAQ Rules”) and who are “independent” within the meaning of National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”). The Board considers all relevant facts and circumstances in making a determination of independence for each director and, as appropriate, imposes independence requirements more stringent than those provided for by NASDAQ Rules and/or NI 58-101 to the extent required by Canadian or U.S. securities laws, including rules and policies promulgated by the U.S. Securities and Exchange Commission and the TSX. Generally, pursuant to such requirements, a director is considered “independent” of the issuer if he or she has no direct or indirect relationship with the issuer which could, in the view of the issuer’s board of directors, be reasonably expected to interfere with the exercise of the director’s independent judgment, provided that if certain relationships specified in such requirements are in effect the individual is deemed to be not independent. Currently, the Board is comprised of six directors, namely Messrs. Baazov, Sebag, Gadhia, Clark and Goodson and Dr. Zidenberg, of whom four, namely Messrs. Gadhia, Clark and Goodson and Dr. Zidenberg, have been affirmatively determined by the Board to be independent for the purposes of the NASDAQ Rules and NI 58-101. Messrs. Baazov and Sebag are not considered independent as each of them is an executive officer of the Corporation.

The Board is of the opinion that its current size is adequate and facilitates the efficiency of its deliberations, while ensuring a diversity of opinion and experience. The Corporation believes that each and every proposed director is eager to fulfil his obligations and assume his responsibilities in the best interests of the Corporation and the Shareholders. The independent directors of the Board shall regularly meet independently of management, including after Board meetings on an as-needed basis during the year.

Mr. Baazov is the Chairman of the Board and chairs meetings of the Board. Mr. Baazov is a member of the Corporation’s management and, therefore, is not independent. The Board believes that Mr. Baazov’s role as Chief Executive Officer and a significant Shareholder and his guidance of its successful development since assuming the role of Chief Executive Officer makes him uniquely suited to fulfill his role as Chairman of the Corporation.

To provide independent leadership for the independent directors, the Board has appointed Mr. Gadhia, an independent director, as Lead Director. In addition to the appointment of a Lead Director, the Board also provides leadership for its independent directors by formal Board meetings, encouraging independent directors to bring forth agenda items, and

providing independent directors with access to senior management, outside advisors, and unfettered access to information regarding the Corporation’s activities. The relatively small size of the Board facilitates this process. In addition, as of June 30, 2014, the Corporation’s then existing compensation committee became the current Corporate Governance, Nominating and Compensation Committee, which is currently composed of all independent directors.

Directorships

Listed in the table below are the current directors of the Corporation who serve on the boards of directors of other reporting issuers (or the equivalent, including public companies of the United States):


Name of Director	Current Role with the Corporation	Other Current Directorships
Wesley K. Clark	• Director	• Bankers Petroleum Ltd. • BNK Petroleum, Inc. • Rentech Inc. • Petromanas Energy Inc. • root9B Technologies, Inc. • The Grilled Cheese Truck, Inc.
Aubrey Zidenberg	• Director	• Innova Gaming Group Inc.

Position Descriptions

The Corporation has adopted formal position descriptions for the Chair of the Board, the Chief Executive Officer and the Lead Director.

Chair of the Board

The primary responsibility of the Chair of the Board is to provide leadership to the Board to enhance Board effectiveness, including supervising management of the Corporation and overseeing the relationships between the Board, Shareholders and other stakeholders of the Corporation.

In general, the Chair fulfills his or her responsibility by, among other things: (i) overseeing the Board’s discharge of its duties and the delegation of responsibilities to all Board committees; (ii) organizing and presenting the agenda for Board meetings; (iii) assisting in reviewing and monitoring the long term business plan, strategies and policies of the Corporation and the achievement of their objectives; (iv) presiding over meetings of the Board; and (v) facilitating appropriate communication with management, senior officers and shareholders.

Chief Executive Officer

The primary responsibility of the Chief Executive Officer is to lead the Corporation by providing a strategic direction for the growth and profitable operation of the Corporation.

The Chief Executive Officer will be expected, in fulfilling his or her primary responsibilities, to: (i) oversee the appropriate management of day-to-day business affairs of the Corporation; (ii) develop and implement the Corporation’s business plan and strategies; (iii) keep the Board informed in a timely and candid manner of the progress of the Corporation towards the achievement of its established goals and of all material deviations from such goals or objectives; and (iv) take steps to build an effective management team.

Lead Director

The primary responsibility of the Lead Director, who must be an independent director, is to facilitate the functioning of the Board and to facilitate its exercise of independent judgment in fulfilling its responsibilities when the Chair of the Board is not an independent director. The Lead Director’s other responsibilities include: (i) acting as a liaison between the Chair of the Board and the independent directors, including serving as an independent contact for directors on matters deemed to be inappropriate to be discussed initially with the Chair of the Board or in other situations where the Chair of the Board is not available, (ii) communicating the views of the independent directors, Shareholders and other stakeholders of the Corporation to the Board Chair and senior management, and (iii) presiding over in camera independent director meeting.

Orientation and Continuing Education

The Corporate Governance, Nominating and Compensation Committee is currently responsible for the oversight of the orientation of new directors to familiarize them with the Corporation’s business and operations, including the Corporation’s reporting structure, strategic plans, significant financial, accounting and risk issues and compliance programs and policies, management and the external auditors, as well as ongoing educational opportunities for all directors.

The Board believes that it is important to orient new directors to the operations of the Corporation’s business and their role as a director and committee member, if applicable. To this end, management provides new members with, among other things, past Board materials and other private and public documents concerning the Corporation (including, but not limited to, the code of business conduct, whistleblower policy, confidentiality, disclosure and trading policy, the Board mandate and committee charters, corporate governance guidelines and position descriptions for the Chief Executive Officer, Chairman of the Board and Lead Director), provides for tours at Amaya’s expense at its facilities, and meetings with senior executives. Management also provides new directors with access to all of the Corporation’s background documents and records, including by-laws, corporate policies, organization structure and prior board and committee minutes. In addition, management makes a presentation to new directors regarding the nature and operations of our business.

To facilitate ongoing education, the directors are encouraged to communicate with management and the auditors, to keep themselves current with industry trends and developments and changes in legislation with the Corporation’s assistance, to attend industry seminars and to observe the Corporation’s operations first-hand. Although the Board oversees ongoing educational opportunities, no formal continuing education program currently exists for our directors; however, we encourage our directors to attend, enrol or participate in courses and/or seminars dealing with financial literacy, corporate governance and related matters and have agreed to pay the cost of such courses and seminars. Each of our directors also has the responsibility for ensuring that he or she maintains the skill and knowledge necessary to meet his or her obligations as a director. Individual directors are encouraged to identify their continuing education needs through a variety of means, including discussions with management and at Board and committee meetings. In addition, independent directors Mr. Goodson, Mr. Gadhia and Dr. Zidenberg have extensive experience in the gaming industry. Mr. Goodson is also a member of the Corporation’s Compliance Committee, as is Ben Soave, an advisor to Amaya’s Board and former Chief Superintendent of the Royal Canadian Mounted Police.

The Corporation’s management ensures that the Board has timely access to the information it needs to carry out its duties. Directors receive a comprehensive package of information prior to each Board and Committee meeting.

Ethical Business Conduct

The Corporation has adopted a written code of business conduct (the “Code”) for the Corporation’s directors, officers and employees. The Code constitutes written standards that are designed to deter wrongdoing and promote, among other things: (i) honest and ethical conduct, including the handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) avoidance of conflicts of interest, including disclosure to a director or officer of the Corporation of any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest; (iii) safeguarding of the Corporation’s confidential information and integrity and protection of business information; (iv) maintenance of a healthy and safe work environment that is free of discrimination and harassment; (v) protection of employee privacy and personal information; (vi) dealing responsibly with persons outside the Corporation, including compliance with anti-corruption laws and lobbying legislation; (vii) compliance with other applicable governmental laws, rules and regulations; (viii) the prompt reporting to a director or officer (or if appropriate, to the Autorité des marchés financiers) of violations of the Code; and (ix) accountability and responsibility by all directors, officers and employees for adherence to the Code.

The Corporation monitors compliance with the Code and recommends disclosures as and when appropriate and required in accordance therewith. In addition, the Corporation reviews the Code with a view of complying with all applicable rules and regulations, receiving regular reports from management with respect to compliance with the Code, and satisfying itself that management has established a system to disclose the Code (and any amendments thereto) to the extent required. The Code is filed on SEDAR at www.sedar.com under the Corporation’s profile.

A director is required to disclose to the other directors information regarding any transaction or agreement in respect of which such director has a material interest and to abstain from voting on any matter in respect of such transaction or agreement. The director shall excuse himself or herself from the portion of any meeting at which such transaction of agreement is discussed. The Board does not monitor compliance with the Code but it regularly assesses compliance by its queries to management at Board meetings.

In addition to the Code, Amaya has adopted an Anti-Bribery and Anti-Corruption Policy for all employees, directors and officers of the Corporation. On January 24, 2014, Amaya hired Marlon D. Goldstein as its new Executive Vice-President, Corporate Development and General Counsel. Mr. Goldstein’s duties include overseeing the Corporation’s legal team. Subsequent to Mr. Goldstein’s hiring, the Corporation created a Compliance Committee charged with overseeing all aspects of compliance with gaming regulatory and other corporate compliance matters.

The Board monitors compliance with the Code by reserving the right to audit compliance with the Code and through the Corporation’s existing “whistleblower” policy, which provides a procedure for the submission of information by persons relating to possible violations of the Code.

Nomination of Directors and Succession

The Corporate Governance, Nominating and Compensation Committee, which is composed entirely of independent directors (as determined based on the standards set forth under “Statement of Corporate Governance Practices – Board”), is responsible for, among other things, identifying, recruiting and recommending to the Board qualified nominees for election as directors of the Corporation, reviewing the size of the Board from time to time and reviewing on an annual basis the competencies, skills and personal qualities of each existing director, and those competencies, skills and personal qualities that are required of directors in order to add value to the Corporation in light of the opportunities and risks facing the Corporation, the Corporation’s proposed strategy, the independence of the Board and the Corporation’s other corporate governance guidelines and policies.

In considering potential nominees for election as directors, the Corporate Governance, Nominating and Compensation Committee considers a number of factors, including those set out above, together with the independence, background, employment and qualifications of potential nominees and the alignment of such potential nominees’ competencies, skills and personal qualities with the Corporation’s needs. The Corporate Governance, Nominating and Compensation Committee recommends to the Board a proposed list of nominees for election as directors by the Shareholders in connection with each meeting of Shareholders at which directors are to be elected.

The Corporation’s corporate governance guidelines provide that no person shall be appointed or elected as a director after reaching 75 years of age. However, the Board has decided not to adopt term limits for the directors, believing that such a policy would have the effect of forcing directors off the Board who have developed, over a period of service, increased insight of the Corporation and, therefore can be expected to provide an increasing contribution to the Board. The Board recognizes the value of some turnover in Board membership and the Corporate Governance, Nominating and Compensation Committee is mandated annually to consider and recommend changes the composition of the Board.

The Corporate Governance, Nominating and Compensation Committee also has responsibility for reviewing, with the Chair of the Board and the Chief Executive Officer, the succession plans relating to the position of Chief Executive Officer and generally with respect to other senior positions, and to make recommendations to the Board with respect to the selection of individuals to occupy these positions, including reviewing plans in respect of an unexpected incapacitation of the Chief Executive Officer.

Board Mandate

The Board is responsible for the stewardship of the business and affairs of the Corporation, including, without limitation, the appointment of management, strategic planning, monitoring of financial performance, financial reporting and risk management.

The Board is responsible for, among other things: (i) approving the appointment of the Chief Executive Officer and all other senior management, and approving their compensation; (ii) satisfying itself as to the integrity of the management team and that they create a culture of integrity throughout the Corporation; (iii) approving its composition and size, selection of the Chair of the Board, candidates nominated for election to the Board, committee and committee chair appointments, committee charters and director compensation; and (iv) reviewing, questioning and approving the mission of the Corporation and its strategy, objectives and goals. In addition, the Board is responsible for: (i) monitoring of the Corporation’s performance and progress towards its strategic and operational goals; (ii) overseeing the identification and management of the Corporation’s principal business risks; (iii) approving and monitoring compliance with significant policies and procedures by which the Corporation operates; (iv) overseeing communications with Shareholders, employees, financial analysts, governments, regulatory authorities, media and Canadian and international communities; and (v) overseeing the accurate, timely and complete disclosure of all financial and other information or developments that have a significant and material impact on the Corporation.

Compensation

In addition to the items listed above under “Statement of Corporate Governance Practices – Nomination of Directors” the Board, after reviewing recommendations of the Corporate Governance, Nominating and Compensation Committee, is responsible for approving executive and director compensation, including with respect to: (i) compensation of the Corporation’s Chief Executive Officer and other members of senior management, and (ii) compensation disclosure in the annual report on executive compensation for inclusion in the Corporation’s management information circular. The Corporate Governance, Nominating and Compensation Committee has authority to retain independent compensation advisors and considers the independence of its external compensation advisors.

Refer to section “Statement of Executive Compensation – Compensation Discussion and Analysis – General” for additional details regarding the role and activities of the Corporate Governance, Nominating and Compensation Committee.

Other Board Committees

The Board has two committees: the Audit Committee and the Corporate Governance, Nominating and Compensation Committee. The Board has established these committees to assist it in fulfilling its mandate and to satisfy various regulatory obligations. The Board oversees the establishment and operation of all of its committees and the appointment, compensation and conduct of their members. In addition to these regular committees, the Board may appoint ad hoc committees periodically to address certain issues. Refer to section “Audit Committee Information” for a description of the function of the Audit Committee.

Assessments

The Board receives recommendations from the Corporate Governance, Nominating and Compensation Committee, but retains responsibility for examining its size and composition on an annual basis. In addition, the Board has established a process for assessing, on an annual basis, the performance and effectiveness of the Board as a whole and each of its committees. This process is overseen by the Corporate Governance, Nominating and Compensation Committee and takes into consideration: (i) the solicitation and receipt of comments from directors; (ii) the Board Mandate; (iii) the charter of each of the Corporate Governance, Nominating and Compensation Committee and the Audit Committee (the “Audit Committee Charter”); and (iv) the performance of each individual director. The Corporate Governance, Nominating and Compensation Committee considers the performance of directors in determining whether to recommend that they be nominated for re-election. These assessments are currently done on an informal basis through discussion at committee and Board meetings due to the size of the Board and its committees.

As Chief Executive Officer of Amaya, Mr. Baazov is responsible for devising and implementing the general business strategies of the Corporation and reporting progress to the Board. As Chair, Mr. Baazov is responsible for preparing the agenda of the Board meetings and presiding over the meetings. The Chairpersons of the Board’s Audit and Corporate Governance, Nominating and Compensation Committees are responsible for leadership of their respective committees, including preparing the agenda, presiding over the meetings, making committee assignments and reporting to the Board.

Diversity

The Corporation values and welcomes a diversity of views and perspectives on the Board. The Corporation believes in diversity and values the benefits diversity can bring to the Board, including diversity of personal characteristics such as age, gender, character, geographic residence, business experience (including financial skills and literacy), functional expertise, demonstrated leadership, stakeholder expectations and culture. The composition of the Board is intended to reflect a diverse mix of skills, experience, knowledge and backgrounds, including an appropriate number of women directors.

However, the Corporation has not otherwise adopted a written policy for identifying and nominating women directors and does not have targets regarding the number or percentage of women on the Board. The Corporate Governance, Nominating and Compensation Committee recruits and considers candidates for director having regard for the background, employment and qualifications of possible candidates and the alignment of such candidate’s talents, competencies, skills and personal qualities with the Corporation’s needs and does not believe it is appropriate to fix targets that would prioritize a candidate on the basis of gender or other personal characteristics. The Committee does not specifically consider the level of representation of women on the Board in identifying and nominating candidates for election or re-election to the Board as its focus is on the recruitment of candidates with the competencies, skills and personal qualities to add the highest value to the Board, rather than on the gender or other personal characteristics of particular candidates.

The Corporation is focused on finding executive talent to grow and expand its business. As such, it focuses on recruiting and retaining executive talent needed to develop and implement the Corporation’s strategy, objectives and goals without regard for the gender of potential candidates for executive officer positions. For this same reason, the Corporation has not adopted a target regarding women in executive officer positions. Currently, none of the Board members or executive officers of the Corporation are women.

AUDIT COMMITTEE INFORMATION

Purpose

The Audit Committee is established to fulfil applicable public company obligations respecting audit committees and to assist the Board in discharging its oversight responsibilities with respect to financial reporting to ensure the transparency and integrity of the Corporation’s published financial information. The Audit Committee’s responsibilities include overseeing: (i) the integrity of the Corporation’s financial statements and financial reporting process, including the audit process and the Corporation’s internal controls over financial reporting, disclosure controls and procedures and compliance with other related legal and regulatory requirements; (ii) the qualifications, independence, retention, compensation and work of the Corporation’s external auditors; (iii) the work of the Corporation’s financial management and internal auditors; (iv) enterprise risk management, privacy and data security; and (e) the auditing, accounting and financial reporting process generally. The Audit Committee is also responsible for pre-approving all non-audit services, procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and the confidential anonymous submission by employees of the Corporation and its subsidiaries of concerns regarding questionable accounting or auditing matters and for any additional matters delegated to the Audit Committee by the Board.

The Audit Committee has the right, for the purposes of performing its duties, to maintain direct communication with the Corporation’s external auditor and the Board, to inspect all books and records of the Corporation and its subsidiaries, to seek any information it requires from any employee of the Corporation and its subsidiaries, and to retain independent outside counsel or other advisors.

The Audit Committee is required to be comprised of a minimum of three directors, each of whom must be “independent” and “financially literate” (or words of similar import or meaning) and otherwise qualified within the meaning of applicable securities law and the rules of any applicable stock exchange. At least one member of the Audit Committee will also qualify as an “audit committee financial expert”, as defined by the applicable rules of the United States Securities and Exchange Commission. The Audit Committee meets regularly and as often as it deems necessary to perform the duties and discharge its responsibilities in a timely manner, but is required to meet at least four times a year.

Audit Committee Charter

The current Audit Committee Charter was adopted on April 22, 2015. The full text of the Audit Committee Charter is available on the Corporation’s website at www.amaya.com, and the disclosure provided under this section of this Information Circular, i.e., “Audit Committee Information”, is qualified in its entirety by reference to the full text thereof.

Composition

The Audit Committee is comprised of Messrs. Goodson, Clark and Gadhia, each of whom is “independent” and “financially literate” within the meaning of applicable securities law and the rules of applicable stock exchanges.

Relevant Education and Experience

Each member of the Corporation’s Audit Committee has an understanding of the generally accepted accounting principles applied by the Corporation, i.e., IFRS, and has the ability to understand a set of financial statements that presents a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements and its internal controls and procedures for financial reporting.

All three members of the Corporation’s Audit Committee serve or have served on a number of other boards of directors and have acquired financial education and/or experience that would result in them being “financially literate”.


Name of Director	Relevant Financial Education and Experience	Other Current Directorships
Harlan Goodson	• Lawyer • Accounting courses • Former audit committee member of a NASDAQ-listed company	• None
Divyesh Gadhia	• Chartered Accountant	• None
Wesley K. Clark	• Participated in review of financial statements while being a director on various boards • Investment banking experience and holds certain securities licenses	• Bankers Petroleum Ltd. • BNK Petroleum, Inc. • Rentech Inc. • Petromanas Energy Inc. • root9B Technologies, Inc. • The Grilled Cheese Truck, Inc.

Pre-approval Policies and Procedures for Audit Services

The Audit Committee has established a practice of approving audit and non-audit services provided by the external auditor. The Audit Committee has delegated to its Chairman, Mr. Goodson, the authority, to be exercised between regularly scheduled meetings of the Audit Committee, to pre-approve audit and non-audit services provided by the independent auditor. All such pre-approvals are reported by the Chairman at the next meeting of the Audit Committee following the pre-approval.

External Auditor Service Fees

On September 17, 2014, the Corporation changed its independent external auditor and the Board appointed Deloitte as successor auditor in replacement of Richter. The aggregate fees billed by Richter, until September 17, 2014, for the fiscal years ended December 31, 2014 and 2013, respectively, were as follows:


Description	2014 ($)		2013 ($)
Audit Fees^(a)		0		250,000
Audit – Related Fees^(b)		0		0
Tax Fees^(c)		0		0
All Other Fees^(d)		116,805		0

The aggregate fees billed by Deloitte beginning on September 17, 2014, for the fiscal year ended December 31, 2014, were as follows:


Description	September 17, 2014 to December 31, 2014 ($)
Audit Fees^(a)		1,845,000
Audit – Related Fees^(b)		51,000
Tax Fees^(c)		166,000
All Other Fees^(d)		0

Notes:

(a)

(b)

(c)	“Tax Fees” means the aggregate fees billed for professional services rendered by the Corporation’s external auditor for tax compliance and assistance with various other tax related questions.

(d)	“All Other Fees” means the aggregate fees billed in the last fiscal year for products and services provided by the Corporation’s previous external auditor, Richter, other than the services reported under clauses (a), (b) and (c), above.

RECEIPT OF SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

Under the Business Corporations Act (Québec), a registered holder or beneficial owner of Common Shares that will be entitled to vote at the next annual meeting of Shareholders may submit to the Corporation, before January 30, 2016, a proposal in respect of any matter to be raised at such meeting.

ADDITIONAL INFORMATION

Additional information relating to the Corporation is available on SEDAR at www.sedar.com under the Corporation’s profile. Copies of the Corporation’s latest audited financial statements and any interim financial statements as well as MD&As are also available on request from the Secretary of the Corporation. Comparative financial information of the Corporation is provided in its financial statements and MD&As for the Corporation’s most recently completed financial year.

APPROVAL OF THE INFORMATION CIRCULAR

The content and transmission of this Information Circular have been approved by the Board.

Montréal, Québec, May 14, 2015.

(s) David Baazov

David Baazov

Chairman of the Board,

President and Chief Executive Officer

SCHEDULE “A”

CHANGE OF AUDITOR REPORTING PACKAGE

(See attached.)

A-1

AMAYA GAMING GROUP INC.

NOTICE OF CHANGE OF AUDITOR

PURSUANT TO NATIONAL INSTRUMENT 51-102


TO:		Richter LLP (“Richter”)
		Deloitte LLP (“Deloitte”)

AND TO:		Autorité des marchés financiers
		Ontario Securities Commission
		Alberta Securities Commission
		British Columbia Securities Commission
		The Manitoba Securities Commission
		Financial and Consumer Affairs Authority of Saskatchewan

RE:		Notice Regarding Change of Auditor Pursuant to Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”)

Dear Sirs/Mesdames:

Notice is hereby given, pursuant to Section 4.11 of NI 51-102, of a change of auditor of Amaya Gaming Group Inc. (the “Corporation”).

Richter, the former auditors of the Corporation, tendered their resignation effective September 17, 2014 and the board of directors of the Corporation (the “Board”) have appointed Deloitte as successor auditors in their place.

The former auditors of the Corporation resigned at the Corporation’s request.

The resignation of Richter and appointment of Deloitte in their place has been approved by the Board.

There have been no reservations contained in the former auditor’s reports on any of the Corporation’s financial statements relating to the two most recently completed financial years.

There are no reportable events (as defined under 4.11(1) of NI 51-102).

Signed this 26th day of September 2014.


AMAYA GAMING GROUP INC.

By:		(signed) Daniel Sebag
		Name: Daniel Sebag
		Title: Chief Financial Officer

A-2

LOGO

October 1, 2014

Autorité des marchés financiers

Ontario Securities Commission

Alberta Securities Commission

British Columbia Securities Commission

The Manitoba Securities Commission

Financial and Consumer Affairs Authority of Saskatchewan

Re:

Notice of change of Auditors of Amaya Gaming Group Inc.

Dear Sirs/Mesdames:

We have read the Notice of Amaya Gaming Group Inc. dated September 26, 2014 and are in agreement with the statements contained in such Notice.

Yours very truly,

Richter LLP

LOGO

Marie-Claude Frigon, CPA, CA

cc. Daniel Sebag, Chief Financial Officer, Amaya Gaming Group Inc.

A-3


						Deloitte LLP
						1 Place Ville Marie
						Suite 3000
						Montreal QC H3B 4T9
						Canada

						Tel: 514-393-7115
						Fax: 514-390-4113
						www.deloitte.ca

September 30, 2014

VIA SEDAR


TO:		Autorité des marchés financiers
		Ontario Securities Commission
		Alberta Securities Commission
		British Columbia Securities Commission
		The Manitoba Securities Commission
		Financial and Consumer Affairs Authority of Saskatchewan

Subject :

Amaya Gaming Group Inc. (the “Corporation”)

National Instrument 51-102 – Change of Auditors of a Reporting Issuer

Dear Sirs/Madam,

We acknowledge receipt of a Notice of Change of Auditor (the “Notice”) dated September 26, 2014 delivered to us by the Corporation.

Pursuant to paragraph 4.11 of National Instrument 51-102, please accept this letter as confirmation of Deloitte LLP that we have reviewed the Notice and based on our knowledge as at the time of receipt of the Notice, we agree with the statements in the Notice except that we have no basis to agree or disagree with the following statement:

“There are no reportable events (as defined under 4.11(1) of NI 51-102).”

Yours truly,

LOGO

1	CPA auditor, CA, public accountancy permit No. A118581

Cc : Amaya Gaming Group Inc.

A-4

SCHEDULE “B”

ORDINARY RESOLUTION TO APPROVE THE NEW EQUITY INCENTIVE PLAN AND AMEND THE STOCK OPTION PLAN

“BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE SHAREHOLDERS THAT:

The new equity incentive plan adopted by the board of directors of the Corporation (the “Board”) on May 14, 2015, (the “New Equity Incentive Plan”), in the form attached as Schedule “D” to the management information circular of the Corporation dated May 14, 2015 (the “Information Circular”), which provides for the issuance from time to time of up to a maximum of 10% of the issued and outstanding common shares of the Corporation at any such time, and the other key terms of which are set forth under “Business of the Meeting – Approval of New Equity Incentive Plan and Stock Option Plan Amendment – Key Terms of the New Equity Incentive Plan” in the Information Circular, is hereby ratified, authorized and approved.

The proposed amendment to the current stock option plan of the Corporation (the “Stock Option Plan”) to limit the number of shares issuable thereunder to the number of options currently outstanding (the “Stock Option Plan Amendment”) is hereby ratified, authorized and approved. The Stock Option Plan Amendment amends section 5.1 of the Stock Option Plan to delete the first sentence thereof and replaces it with the following: “Subject to adjustment as provided for in Section 8 and any subsequent amendment to the Plan, the aggregate number of Shares reserved for issuance and which will be available for purchase pursuant to Options granted under the Option Plan will not exceed that amount of Options that are granted and outstanding on the date the Stock Option Plan Amendment is approved by the majority of Shareholders, on a disinterested shareholder basis”.

3.	The Corporation is hereby authorized to grant equity-based awards under the New Equity Incentive Plan in accordance with its terms until June 22, 2018.

Any director or officer of the Corporation be and each of them is hereby authorized and directed, for and in the name of and on behalf of the Corporation, to execute and deliver or cause to be executed and delivered all documents, and to take any action, which, in such director’s or officer’s own discretion, is necessary or desirable to give effect to this resolution.”

B-1

SCHEDULE “C”

BOARD MANDATE

AMAYA INC.

MANDATE FOR THE BOARD OF DIRECTORS

GENERAL

The board of directors (the “Board”) of Amaya Inc. (the “Company”) is elected by the shareholders and is responsible for the stewardship of the business and affairs of the Company. The Board seeks to discharge such responsibility by reviewing, discussing and approving the Company’s strategic planning and organizational structure and supervising management, all with a view to preserving and enhancing the business of the Company and its underlying value.

Although directors may be elected by the shareholders to bring special expertise or a point of view to Board deliberations, they are not chosen to represent a particular constituency. The best interests of the Company must be paramount at all times.

INDEPENDENCE

The Board shall be constituted at all times of a majority of “independent directors” who either meet or exceed the independence requirements of the NASDAQ Stock Market LLC (“NASDAQ”) and who are “independent” within the meaning of National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”). The Board will consider all relevant facts and circumstances in making a determination of independence for each director and, as appropriate, impose independence requirements more stringent than those provided for by NASDAQ and/or NI 58-101 to the extent required by Canadian or U.S. securities laws, including rules and policies promulgated by the U.S. Securities and Exchange Commission and the Toronto Stock Exchange. Each independent director who experiences a change in circumstances that could affect such director’s independence should deliver a notice of such change to the Company’s General Counsel.

RESPONSIBILITIES

The Board discharges its responsibility for overseeing the management of the Company’s business by delegating to the Company’s senior officers the responsibility for the day-to-day management of the Company. The Board discharges its responsibilities both directly and through its committees, the Audit Committee and the Corporate Governance, Nominating and Compensation Committee. In addition to these regular committees, the Board may appoint ad hoc committees periodically to address certain issues.

The Board’s primary roles are overseeing corporate performance and providing quality, depth and continuity of management to meet the Company’s strategic objectives. Other principal duties include, but are not limited to, the following categories:

Appointment of Management

The Board is responsible for approving the appointment of the Chief Executive Officer and all other senior management, and approving their compensation, following a review of the recommendations of the Corporate Governance, Nominating and Compensation Committee.

In approving the appointment of the Chief Executive Officer and all other senior management, the Board will, to the extent feasible, satisfy itself as to the integrity of these individuals and that they create a culture of integrity throughout the Company.

The Board from time to time delegates to senior management the authority to enter into certain types of transactions, including financial transactions, subject to specified limits. Investments and other expenditures above the specified limits, and material transactions outside the ordinary course of business, are reviewed by and are subject to the prior approval of the Board.

C-1

The Board oversees that succession planning programs are in place, including programs to train and develop management.

Board Organization

The Board will receive recommendations from the Corporate Governance, Nominating and Compensation Committee, but retains responsibility for managing its own affairs by giving its approval for its composition and size, the selection of the Chair of the Board, candidates nominated for election to the Board, committee and committee chair appointments, committee charters and director compensation.

The Board may delegate to Board committees matters it is responsible for, including, without limitation, the approval of compensation of the Board and management, the conduct of performance evaluations and oversight of internal controls systems, but the Board must retain its oversight function and ultimate responsibility for these matters and all other delegated responsibilities.

Strategic Planning

The Board has oversight responsibility to participate directly, and through its committees, in reviewing, questioning and approving the mission of the Company and its strategy, objectives and goals.

The Board is responsible for reviewing, providing input to, and approving the business, financial and strategic plans by which it is proposed that the Company may reach its objectives and goals.

Monitoring of Performance and Certain Financial Matters

The Board is responsible for enhancing congruence between shareholder expectations, Company plans and management performance.

The Board is responsible for adopting processes for monitoring the Company’s performance and progress toward its strategic and operational goals, and to revise and alter its direction to management in light of changing circumstances affecting the Company.

The Board is responsible for reviewing and approving the audited financial statements, interim financial statements and the notes and Management’s Discussion and Analysis accompanying such financial statements.

The Board is responsible for reviewing and approving material transactions outside the ordinary course of business and those matters which the Board is required to approve under the Company’s governing statute, including, without limitation, the payment of dividends, purchase and redemptions of securities, acquisitions and dispositions of material capital assets and material capital expenditures.

Risk Management

The Board is responsible for overseeing the identification of the principal risks of the Company’s business and ensuring the implementation of appropriate systems to effectively monitor and manage such risks with a view to the long-term viability of the Company and achieving a proper balance between the risks incurred and the potential return to the Company’s shareholders.

Policies and Procedures

The Board is responsible for

(a) approving and monitoring compliance with all significant policies and procedures by which the Company operates; and

(b) approving policies and procedures designed to ensure that the Company operates at all times within applicable laws and regulations.

The Board shall enforce its policy respecting confidential treatment of the Company’s proprietary information and the confidentiality of Board deliberations.

C-2

Communications and Reporting

The Board has approved and will revise from time to time as circumstances warrant a communications plan to address communications with shareholders, employees, financial analysts, governments and regulatory authorities, the media and the Canadian and international communities.

The Board is responsible for:

(a) overseeing the accurate reporting of the financial performance of the Company to shareholders, other security holders and regulators on a timely and regular basis;

(b) taking steps to enhance the timely, accurate and complete disclosure of any other developments that have a significant and material impact on the Company;

(d) overseeing the Company’s implementation of systems which accommodate feedback from shareholders.

DATED April 22, 2015.

C-3

SCHEDULE “D”

NEW EQUITY INCENTIVE PLAN

AMAYA INC.

EQUITY INCENTIVE PLAN

JUNE 22, 2015

D-1

TABLE OF CONTENTS


		Page
ARTICLE 1 PURPOSE			1
1.1	Purpose		1
ARTICLE 2 INTERPRETATION			1
2.1	Definitions		1
2.2	Interpretation		5
ARTICLE 3 ADMINISTRATION			6
3.1	Administration		6
3.2	Delegation to Committee		6
3.3	Determinations Binding		7
3.4	Eligibility		7
3.5	Board Requirements		7
3.6	Total Shares Subject to Awards		7
3.7	Limits on Grants of Awards		7
3.8	Award Agreements		8
3.9	Permitted Assigns		8
3.10	Non-transferability of Awards		8
ARTICLE 4 OPTIONS			8
4.1	Grant of Options		8
4.2	Exercise Price		8
4.3	Term of Options		8
4.4	Vesting and Exercisability		9
4.5	Payment of Exercise Price		9
ARTICLE 5 RESTRICTED SHARE UNITS			9
5.1	Grant of RSUs		9
5.2	Vesting of RSUs		9
5.3	Delivery of Shares		10
ARTICLE 6 PERFORMANCE SHARE UNITS			10
6.1	Grant of PSUs		10
6.2	Terms of PSUs		10
6.3	Performance Goals		10
6.4	Delivery of Shares		10
ARTICLE 7 RESTRICTED SHARES			10
7.1	Grant of Restricted Shares		10
7.2	Restrictions on Transfer		11
7.3	Effect of Termination of Employment or Services		11
ARTICLE 8 DEFERRED SHARE UNITS			11
8.1	Grant of Deferred Share Units		11
8.2	Settlement of DSUs		11
ARTICLE 9 OTHER SHARE-BASED AWARDS			12
9.1	Grant of Other Share-Based Awards		12
ARTICLE 10 ADDITIONAL AWARD TERMS			12
10.1	Dividend Equivalents		12
10.2	Black-out Period		12
10.3	Withholding Taxes		12
10.4	Recoupment		13
ARTICLE 11 TERMINATION OF EMPLOYMENT OR SERVICES			13
11.1	Death or Disability		13
11.2	Termination of Employment or Services		13
11.3	Discretion to Permit Acceleration		14
11.4	Participants’ Entitlement		15

TABLE OF CONTENTS

(continued)


		Page
ARTICLE 12 EVENTS AFFECTING THE CORPORATION			15
12.1	General		15
12.2	Change in Control		15
12.3	Reorganization of Corporation’s Capital		16
12.4	Other Events Affecting the Corporation		16
12.5	Immediate Acceleration of Awards		16
12.6	Issue by Corporation of Additional Shares		16
12.7	Fractions		16
ARTICLE 13 U.S. TAXPAYERS			16
13.1	Provisions for U.S. Taxpayers		16
13.2	ISOs		16
13.3	ISO Grants to 10% Shareholders		17
13.4	$100,000 Per Year Limitation for ISOs		17
13.5	Disqualifying Dispositions		17
13.6	Section 409A of the Code		17
13.7	Requirement of Notification of Election Under Section 83(b) of the Code		17
ARTICLE 14 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN			18
14.1	Amendment, Suspension, or Termination of the Plan		18
14.2	Shareholder Approval		18
14.3	Permitted Amendments		18
ARTICLE 15 MISCELLANEOUS			19
15.1	Legal Requirement		19
15.2	No Other Benefit		19
15.3	Rights of Participant		19
15.4	Corporate Action		19
15.5	Conflict		19
15.6	Participant Information		19
15.7	Participation in the Plan		20
15.8	International Participants		20
15.9	Successors and Assigns		20
15.10	General Restrictions and Assignment		20
15.11	Severability		20
15.12	Notices		20
15.13	Effective Date		21
15.14	Governing Law		21
15.15	Submission To Jurisdiction		21

Amaya Inc.

Equity Incentive Plan

ARTICLE 1

PURPOSE

1.1

Purpose

The purpose of this Plan is to provide the Corporation with a share-related mechanism to attract, retain and motivate qualified Directors, Employees and Consultants of the Corporation and its subsidiaries, to reward such of those Directors, Employees and Consultants as may be granted Awards under this Plan by the Board from time to time for their contributions toward the long term goals and success of the Corporation and to enable and encourage such Directors, Employees and Consultants to acquire Shares as long term investments and proprietary interests in the Corporation. This Plan is also intended to replace the Prior Plan (as defined below) as of the Effective Date and with respect to future grants and awards following such date.

ARTICLE 2

INTERPRETATION

2.1

Definitions

When used herein, unless the context otherwise requires, the following terms have the indicated meanings, respectively:

“Affiliate” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person directly or indirectly owning or controlling 10% or more of any class of outstanding equity securities of such Person;

“Award” means any Option, Restricted Share Unit, Performance Share Unit, Deferred Share Unit, Restricted Share or Other Share-Based Award granted under this Plan;

“Award Agreement” means a signed, written agreement between a Participant and the Corporation, in the form or any one of the forms approved by the Plan Administrator, evidencing the terms and conditions on which an Award has been granted under this Plan and which need not be identical to any other such agreements;

“Board” means the board of directors of the Corporation;

“Business Day” means a day, other than a Saturday or Sunday, on which the principal commercial banks in the City of Toronto are open for commercial business during normal banking hours;

“Cause” means, with respect to a particular Employee:

(a)

“cause” as such term is defined in the employment or other written agreement between the Corporation or a Designated Affiliate and the Employee as described in Section 15.5(i); or

(b)

in the event there is no written or other applicable employment agreement between the Corporation or a Designated Affiliate as described in Section 15.5(i) or “cause” is not defined in such agreement, “cause” as such term is defined in the Award Agreement; or

(c)

in the event neither (a) nor (b) apply, then “cause” as such term is defined by applicable law or, if not so defined, such term shall refer to circumstances where an employer can terminate an individual’s employment without notice or pay in lieu thereof;

“Change in Control” means the occurrence of any one or more of the following events:

(a)

any transaction at any time and by whatever means pursuant to which any Person or any group of two or more Persons acting jointly or in concert (other than the Corporation or a wholly-owned subsidiary of the Corporation) hereafter acquires the direct or indirect “beneficial ownership” (as defined in the Securities Act (Ontario)) of, or acquires the right to exercise control or direction over, securities of the Corporation representing more than 50% of the then issued and outstanding voting securities of the Corporation,

including, without limitation, as a result of a take-over bid, an exchange of securities, an amalgamation of the Corporation with any other entity, an arrangement, a capital reorganization or any other business combination or reorganization;

(b)

the sale, assignment or other transfer of all or substantially all of the assets of the Corporation to a Person other than a wholly-owned subsidiary of the Corporation;

(c)

the dissolution or liquidation of the Corporation, other than in connection with the distribution of assets of the Corporation to one or more Persons which were wholly-owned subsidiaries of the Corporation prior to such event;

(d)

the occurrence of a transaction requiring approval of the Corporation’s shareholders whereby the Corporation is acquired through consolidation, merger, exchange of securities, purchase of assets, amalgamation, statutory arrangement or otherwise by any other Person (other than a short form amalgamation or exchange of securities with a wholly-owned subsidiary of the Corporation);

(e)

individuals who comprise the Board as of the last annual meeting of shareholders of the Corporation (the “Incumbent Board”) for any reason cease to constitute at least a majority of the members of the Board, unless the election, or nomination for election by the Corporation’s shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and in that case such new director shall be considered as a member of the Incumbent Board; or

(f)

the Board determines that a Change in Control shall be deemed to have occurred in such circumstances as the Board shall determine;

provided that, notwithstanding clause (a), (b), (c) and (d) above, a Change in Control shall be deemed not to have occurred if immediately following the transaction set forth in clause (a), (b), (c) or (d) above: (A) the holders of securities of the Corporation that immediately prior to the consummation of such transaction represented more than 50% of the combined voting power of the then outstanding securities eligible to vote for the election of directors of the Corporation hold (x) securities of the entity resulting from such transaction (the “Surviving Entity”) that represent more than 50% of the combined voting power of the then outstanding securities eligible to vote for the election of directors or trustees (“voting power”) of the Surviving Entity, or (y) if applicable, securities of the entity that directly or indirectly has beneficial ownership of 100% of the securities eligible to elect directors or trustees of the Surviving Entity (the “Parent Entity”) that represent more than 50% of the combined voting power of the then outstanding securities eligible to vote for the election of directors or trustees of the Parent Entity, and (B) no Person or group of two or more Persons, acting jointly or in concert, is the beneficial owner, directly or indirectly, of more than 50% of the voting power of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) (any such transaction which satisfies all of the criteria specified in clauses (A) and (B) above being referred to as a “Non-Qualifying Transaction” and, following the Non-Qualifying Transaction, references in this definition of “Change in Control” to the “Corporation” shall mean and refer to the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) and, if such entity is a company or a trust, references to the “Board” shall mean and refer to the board of directors or trustees, as applicable, of such entity).

Notwithstanding the foregoing, for purposes of any Award that constitutes “deferred compensation” (within the meaning of Section 409A of the Code), the payment of which would be accelerated upon a Change in Control, a transaction will not be deemed a Change in Control for Awards granted to any Participant who is a U.S. Taxpayer unless the transaction qualifies as “a change in control event” within the meaning of Section 409A of the Code.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its sole purpose is to change the state or jurisdiction of the Corporation’s incorporation, or (y) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction;

“Code” means the United States Internal Revenue Code of 1986, as amended from time to time;

“Committee” has the meaning set forth in Section 3.2;

“Consultant” means an individual consultant or an employee or director of a consultant entity, other than an Employee Participant, who:

(a)

is engaged to provide services on a bona fide basis to the Corporation or a Designated Affiliate, other than services provided in relation to a distribution of securities of the Corporation or a Designated Affiliate;

(b)

provides the services under a written contract with the Corporation or a Designated Affiliate;

(c)

spends or will spend a significant amount of time and attention on the affairs and business of the Corporation or a Designated Affiliate;

“Control” means the relationship whereby a Person is considered to be “controlled” by a Person if:

(a)

in the case of a Person,

(i)

voting securities of the first-mentioned Person carrying more than 50% of the votes for the election of directors are held, directly or indirectly, otherwise than by way of security only, by or for the benefit of the other Person; and

(ii)

the votes carried by the securities are entitled, if exercised, to elect a majority of the directors of the first-mentioned Person;

(iii)

in the case of a partnership that does not have directors, other than a limited partnership, the second-mentioned Person holds more than 50% of the interests in the partnership; or

(b)

in the case of a limited partnership, the general partner is the second-mentioned Person.

“Corporation” means Amaya Inc.;

“Date of Grant” means, for any Award, the date specified by the Plan Administrator at the time it grants the Award (which, for greater certainty, shall be no earlier than the date on which the Board meets or otherwise acts for the purpose of granting such Award) or if no such date is specified, the date upon which the Award was granted;

“Deferred Share Unit” or “DSU” means a unit equivalent in value to a Share, credited by means of a bookkeeping entry in the books of the Corporation in accordance with Article 8;

“Designated Affiliate” means each Affiliate of the Corporation as designated by the Plan Administrator for purposes of the Plan from time to time;

“Director” means a director of the Corporation who is not an employee of the Corporation or an Affiliate of the Corporation;

“Disabled” or “Disability” means the permanent and total incapacity of a Participant as determined in accordance with procedures established by the Plan Administrator for purposes of this Plan;

“Effective Date” means the effective date of this Plan, being June 22, 2015;

“Employee” means an individual who:

(a)

is considered an employee of the Corporation or an Affiliate of the Corporation for purposes of source deductions under applicable tax or social welfare legislation; or

(b)

works full-time or part-time on a regular weekly basis for the Corporation or an Affiliate of the Corporation providing services normally provided by an employee and who is subject to the same control and direction by the Corporation or an Affiliate of the Corporation over the details and methods of work as an employee of the Corporation.

“Exchange” means the TSX and any other exchange on which the Shares are or may be listed from time to time;

“Exercise Notice” means a notice in writing, signed by a Participant and stating the Participant’s intention to exercise a particular Option;

“Exercise Price” means the price at which an Option Share may be purchased pursuant to the exercise of an Option;

“Expiry Date” means the expiry date specified in the Award Agreement (which shall not be later than the tenth (10th) anniversary of the Date of Grant) or, if not so specified, means the tenth (10th) anniversary of the Date of Grant;

“Individual Participant” means a Participant who is an individual;

“Insider” means an “insider” as defined by the TSX from time to time in its rules and regulations governing Security Based Compensation Arrangements and other related matter;

“Market Price” at any date in respect of the Shares shall be the closing price of such Shares on the TSX (and if listed on more than one Exchange, and the closing price on another Exchange is higher, then the highest of such

closing prices) on the Date of Grant (or, if such Shares are not then listed and posted for trading on the TSX, on such stock exchange on which the Shares are listed and posted for trading as may be selected for such purpose by the Board). In the event that such Shares did not trade on such Business Day on the TSX or any other Exchange, the Market Price shall be the average of the bid and asked prices in respect of such Shares at the close of trading on such date. In the event that such Shares are not listed and posted for trading on any Exchange, the Market Price shall be the fair market value of such Shares as determined by the Board in its sole discretion;

“NI 45-106” means National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian Securities Administrators, as amended from time to time;

“Option” means a right to purchase Shares under this Plan that is non-assignable and non-transferable unless otherwise approved by the Plan Administrator;

“Option Shares” means Shares issuable by the Corporation upon the exercise of outstanding Options;

“Other Share-Based Award” means any right granted under Section 9.1;

“Participant” means an Employee, Consultant or Director to whom an Award has been granted under this Plan and their Permitted Assigns;

“Participant’s Employer” means with respect to a Participant that is or was an Employee, the Corporation or such Affiliate of the Corporation as is or, if the Participant has ceased to be employed by the Corporation or such Affiliate of the Corporation, was the Participant’s Employer;

“Performance Goals” means performance goals expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Corporation, Affiliate of the Corporation, a division of the Corporation or Affiliate of the Corporation, or an individual, or may be applied to the performance of the Corporation or an Affiliate of the Corporation relative to a market index, a group of other companies or a combination thereof, or on any other basis, all as determined by the Plan Administrator;

“Performance Share Unit” or “PSU” means any right granted under Section 6.1 of the Plan;

“Permitted Assign” has the meaning assigned to that term in NI 45-106;

“Person” includes an individual, sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, and a natural person in his or her capacity as trustee, executor, administrator or other legal representative;

“Plan” means this Equity Incentive Plan, as may be amended from time to time;

“Plan Administrator” means the Board, or if the administration of this Plan has been delegated by the Board to the Committee pursuant to Section 3.2, the Committee;

“Prior Plan” means the Corporation’s 2010 Stock Option Plan, as amended;

“Restricted Period” means the period during which Restricted Shares are subject to restrictions as set out in the Award Agreement;

“Restricted Share Unit” or “RSU” means a right to receive a Share or a Restricted Share granted, as determined by the Plan Administrator, under Section 5.1;

“Restricted Shares” means Shares granted to a Participant under Section 7.1 that are subject to certain restrictions and to a risk of forfeiture;

“Securities Laws” means securities legislation, securities regulation and securities rules, as amended, and the policies, notices, instruments and blanket orders in force from time to time that govern or are applicable to the Corporation or to which it is subject;

“Security Based Compensation Arrangement” has the meaning given to that term in the Company Manual of the TSX, as amended from time to time;

“Share” means one (1) common share in the capital of the Corporation as constituted on the Effective Date or after an adjustment contemplated by Article 12, such other shares or securities to which the holder of an Award may be entitled as a result of such adjustment;

“Termination Date” means:

(a)

in the case of an Employee whose employment with the Corporation or a Designated Affiliate terminates in the circumstances set out in Subsection 11.2(a) or Subsection 11.2(b), (i) the date designated by the Employee and the Corporation or a Designated Affiliate in a written employment agreement, or other written agreement between the Employee and Corporation or a Designated Affiliate, or (ii) if no written employment agreement exists, the date designated by the Corporation or a Designated Affiliate, as the case may be, on which an Employee ceases to be an employee of the Corporation or the Designated Affiliate, as the case may be, provided that, in the case of termination of employment by voluntary resignation by the Participant, such date shall not be earlier than the date notice of resignation was given, and “Termination Date” specifically does not mean the date of termination of any period of reasonable notice that the Corporation or the Designated Affiliate (as the case may be) may be required by law to provide to the Participant;

(b)

in the case of a Consultant whose consulting agreement or arrangement with the Corporation or a Designated Affiliate, as the case may be, terminates in the circumstances set out in Subsection 11.2(d) or Subsection 11.2(e), the date that is designated by the Corporation or the Designated Affiliate (as the case may be), as the date on which the Participant’s consulting agreement or arrangement is terminated, provided that in the case of voluntary termination by the Participant of the Participant’s consulting agreement or other written arrangement, such date shall not be earlier than the date notice of voluntary termination was given, and “Termination Date” specifically does not mean the date on which any period of notice of termination that the Corporation or the Designated Affiliate (as the case may be) may be required to provide to the Participant under the terms of the consulting agreement or arrangement expires; or

(c)

in the case of a Director who ceases to hold office in the circumstances set out in Subsection 11.2(f), the date upon which the Participant ceases to hold office; and

“TSX” means the Toronto Stock Exchange;

“U.S.” means the United States of America.

“U.S. Taxpayer” shall mean a Participant who, with respect to an Award, is subject to taxation under the applicable U.S. tax laws.

2.2

Interpretation

(a)

Whenever the Board, the Committee or the Plan Administrator exercises discretion in the administration of this Plan, the term “discretion” means the sole and absolute discretion of the Board, Committee or Plan Administrator, as the case may be.

(b)

As used herein, the terms “Article”, “Section”, “Subsection” and “clause” mean and refer to the specified Article, Section, Subsection and clause of this Plan, respectively.

(c)

Words importing the singular include the plural and vice versa and words importing any gender include any other gender.

(d)

Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period begins, including the day on which the period ends, and abridging the period to the immediately preceding Business Day in the event that the last day of the period is not a Business Day. In the event an action is required to be taken or a payment is required to be made on a day which is not a Business Day such action shall be taken or such payment shall be made by the immediately preceding Business Day.

(e)

Unless otherwise specified, all references to money amounts are to Canadian currency.

(f)

The headings used herein are for convenience only and are not to affect the interpretation of this Plan.

ARTICLE 3

ADMINISTRATION

3.1

Administration

Subject to Section 3.2, this Plan will be administered by the Plan Administrator and the Plan Administrator has sole and complete authority, in its discretion, to:

(a)

determine the individuals to whom grants under the Plan may be made;

(b)

make grants of Awards under the Plan relating to the issuance of Shares (including any combination of Options, Restricted Share Units, Performance Share Units, Deferred Share Units, Restricted Shares or Other Share-Based Awards) in such amounts, to such Persons and, subject to the provisions of this Plan, on such terms and conditions as it determines including without limitation:

(i)

the time or times at which Awards may be granted;

(ii)

the conditions under which:

(A)

Awards may be granted to Participants; or

(B)

Awards may be forfeited to the Corporation,

including any conditions relating to the attainment of specified Performance Goals;

(iii)

the number of Shares to be covered by any Award;

(iv)

the price, if any, to be paid by a Participant in connection with the purchase of Shares covered by any Awards;

(v)

whether restrictions or limitations are to be imposed on the Shares issuable pursuant to grants of any Award, and the nature of such restrictions or limitations, if any; and

(vi)

any acceleration of exercisability or vesting or Restricted Period, or waiver of termination regarding any Award, based on such factors as the Plan Administrator may determine;

(c)

establish the form or forms of Award Agreements;

(d)

cancel, amend, adjust or otherwise change any Award under such circumstances as the Plan Administrator may consider appropriate in accordance with the provisions of this Plan;

(e)

construe and interpret this Plan and all Award Agreements;

(f)

adopt, amend, prescribe and rescind administrative guidelines and other rules and regulations relating to this Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws; and

(g)

make all other determinations and take all other actions necessary or advisable for the implementation and administration of this Plan.

3.2

Delegation to Committee

(i)

The initial Plan Administrator shall be the Board.

(ii)

To the extent permitted by applicable law, the Board may, from time to time, delegate to a committee of the Board (the “Committee”) all or any of the powers conferred on the Plan Administrator pursuant to this Plan, including the power to sub-delegate to any specified officer(s) of the Corporation or its Subsidiaries all or any of the powers delegated by the Board. In such event, the Committee or any sub-delegate will exercise the powers delegated to it in the manner and on the terms authorized by the delegating party. Any decision made or action taken by the Committee or sub-delegate arising out of or in connection with the administration or interpretation of this Plan in this context is final and conclusive and binding on the Corporation and all Affiliates of the Corporation, all Participants and all other Persons.

3.3

Determinations Binding

Any decision made or action taken by the Board, the Committee or any officers or employees to whom authority has been delegated pursuant to Subsection 3.2 arising out of or in connection with the administration or interpretation of this Plan is final, conclusive and binding on the Corporation, the affected Participant(s), their legal and personal representatives and all other Persons.

3.4

Eligibility

All Employees, Consultants and Directors are eligible to participate in the Plan, subject to Subsections 11.1(c) and 11.2(g). Eligibility to participate does not confer upon any Employee, Consultant or Director any right to receive any grant of an Award pursuant to the Plan. The extent to which any Employee, Consultant or Director is entitled to receive a grant of an Award pursuant to the Plan will be determined in the sole and absolute discretion of the Plan Administrator.

3.5

Board Requirements

Any Award granted under this Plan shall be subject to the requirement that, if at any time the Corporation shall determine that the listing, registration or qualification of the Shares issuable pursuant to such Award upon any securities exchange or under any Securities Laws of any jurisdiction, or the consent or approval of the Exchange and any securities commissions or similar securities regulatory bodies having jurisdiction over the Corporation is necessary as a condition of, or in connection with, the grant or exercise of such Award or the issuance or purchase of Shares thereunder, such Award may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the Corporation to apply for or to obtain such listing, registration, qualification, consent or approval. Participants shall, to the extent applicable, cooperate with the Corporation in complying with such legislation, rules, regulations and policies.

3.6

Total Shares Subject to Awards

(a)

Subject to adjustment as provided for in Article 12 and any subsequent amendment to the Plan, the aggregate number of Shares reserved for issuance pursuant to Awards granted under the Plan and the Prior Plan shall not exceed 10% of the Shares issued and outstanding from time to time.

(b)

To the extent any (i) Awards (or portion(s) thereof) under the Plan or (ii) awards (or portion(s) thereof) under the Prior Plan terminate or are cancelled for any reason prior to exercise in full, or are surrendered to the Corporation by the Participant, except surrenders relating to the payment of the purchase price of any such award or the satisfaction of the tax withholding obligations related to any such award, the Shares subject to such awards (or portion(s) thereof) shall be added back to the number of Shares reserved for issuance under this Plan and will again become available for issuance pursuant to the exercise of Awards granted under this Plan.

(c)

Any Shares issued by the Corporation through the assumption or substitution of outstanding stock options or other equity-based awards from an acquired company shall not reduce the number of Shares available for issuance pursuant to the exercise of Awards granted under this Plan.

3.7

Limits on Grants of Awards

Notwithstanding anything in this Plan:

(a)

the aggregate number of Shares:

(i)

issuable to Insiders at any time, under all of the Corporation’s Security Based Compensation Arrangements, shall not exceed ten (10%) percent of the issued and outstanding Shares; and

(ii)

issued to Insiders within any one year period, under all of the Corporation’s Security Based Compensation Arrangements, shall not exceed ten (10%) percent of the issued and outstanding Shares,

provided that the acquisition of Shares by the Corporation for cancellation shall not constitute non-compliance with this Section 3.7 for any Awards outstanding prior to such purchase of Shares for cancellation.

(b)

the aggregate number of Shares issuable to Directors, at any time, under all of the Corporation’s Security Based Compensation Arrangements shall not exceed one (1%) percent of the issued and outstanding Shares and within any one financial year of the Corporation the aggregate fair value on the Date of Grant of all Awards granted to any Director under all of the Corporation’s Security Based Compensation Arrangements shall not exceed $100,000; provided that such limits shall not apply to DSUs granted to the Director in lieu of any cash retainer or meeting fees and such DSUs shall not be included in determining the limits where the aggregate accounting fair value on the Date of Grant of such DSUs is equal to the amount of the cash retainer or meeting fees in respect of which such DSUs were granted.

3.8

Award Agreements

Each Award under this Plan will be evidenced by an Award Agreement. Each Award Agreement will be subject to the applicable provisions of this Plan and will contain such provisions as are required by this Plan and any other provisions that the Plan Administrator may direct. Any one officer of the Corporation is authorized and empowered to execute and deliver, for and on behalf of the Corporation, an Award Agreement to each Participant granted an Award pursuant to this Plan.

3.9

Permitted Assigns

Awards may be transferred by Employees, Directors and Consultants to a Permitted Assign of an Employee, Director or Consultant as applicable, or as may otherwise be approved by the Plan Administrator. In any such case, the provisions of Article 11 shall apply to the Award as if the Award was held by the Employee, Director or Consultant rather than such person’s Permitted Assign.

In the event of the death of the Permitted Assign, the Award shall be automatically transferred to the Employee, Director or Consultant who effected the transfer of the Award to the deceased Permitted Assign. If any Participant has transferred Awards to a corporation pursuant to this Section 3.9, such Awards will terminate and be of no further force or effect if at any time the transferor should cease to own all of the issued shares of such corporation.

3.10

Non-transferability of Awards

Except as permitted under Section 3.9 or as otherwise permitted by the Plan Administrator, no assignment or transfer of Awards, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such Awards whatsoever in any assignee or transferee and immediately upon any assignment or transfer, or any attempt to make the same, such Awards will terminate and be of no further force or effect.

ARTICLE 4

OPTIONS

4.1

Grant of Options

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant Options to any Participant. The terms and conditions of each Option grant shall be evidenced by an Award Agreement.

4.2

Exercise Price

The Plan Administrator will establish the Exercise Price at the time each Option is granted, which Exercise Price must in all cases be not less than the Market Price on the Date of Grant.

4.3

Term of Options

Subject to any accelerated termination as set forth in this Plan, each Option expires on its Expiry Date.

4.4

Vesting and Exercisability

(a)

Unless otherwise specified by the Plan Administrator at the time of granting an Option and except as otherwise provided in this Plan, each Option will vest and be exercisable as follows subject to the Participant continuing to be an Employee, Consultant, or Director, as applicable, or as otherwise agreed to by the Board:


Total Number of Option Shares that may be Purchased		Vesting Date
25%		From the first anniversary of the Date of Grant.
25%		From the second anniversary of the Date of Grant.
25%		From the third anniversary of the Date of Grant.
25%		From the fourth anniversary of the Date of Grant.

(b)

Once an instalment becomes vested, it shall remain vested and shall be exercisable until expiration or termination of the Option, unless otherwise specified by the Plan Administrator, or as may be otherwise set forth in any written employment agreement, or other written agreement between the Corporation or a Designated Affiliate and the Participant. Each Option or instalment may be exercised at any time or from time to time, in whole or in part, for up to the total number of Option Shares with respect to which it is then exercisable. The Plan Administrator has the right to accelerate the date upon which any instalment of any Option becomes exercisable.

(c)

Subject to the provisions of this Plan and any Award Agreement, Options shall be exercised by means of a fully completed Exercise Notice delivered to the Corporation.

(d)

The Plan Administrator may provide at the time of granting an Option that the exercise of that Option is subject to restrictions, in addition to those specified in Section 4.4, such as performance-based vesting conditions.

4.5

Payment of Exercise Price

Unless otherwise specified by the Plan Administrator at the time of granting an Option, the Exercise Notice must be accompanied by payment in full of the purchase price for the Option Shares to be purchased. The Exercise Price must be fully paid by certified cheque, bank draft or money order payable to the Corporation or by such other means as might be specified from time to time by the Plan Administrator, which may include (i) through an arrangement with a broker approved by the Corporation (or through an arrangement directly with the Corporation) whereby payment of the exercise price is accomplished with the proceeds of the sale of Shares deliverable upon the exercise of the Option, (ii) through any cashless exercise process as may be approved by the Plan Administrator, or (iii) such other consideration and method of payment for the issuance of Shares to the extent permitted by the Securities Laws, or any combination of the foregoing methods of payment.

No Shares will be issued or transferred until full payment therefor has been received by the Corporation.

ARTICLE 5

RESTRICTED SHARE UNITS

5.1

Grant of RSUs

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant RSUs to any Participant. The terms and conditions of each RSU grant shall be evidenced by an Award Agreement.

5.2

Vesting of RSUs

The Plan Administrator shall have the authority to determine at the time of grant, in its sole discretion, the duration of the vesting period and other vesting terms applicable to the grant of RSUs.

5.3

Delivery of Shares

Unless otherwise specified in the Award Agreement, as soon as practicable following the expiry of the applicable vesting period, or at such later date as may be determined by the Plan Administrator in its sole discretion at the time of grant, the Corporation shall issue fully paid and non-assessable Shares pursuant to the RSUs to the Participant or as the Participant may direct.

ARTICLE 6

PERFORMANCE SHARE UNITS

6.1

Grant of PSUs

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant PSUs to any Participant. The terms and conditions of each PSU grant shall be evidenced by an Award Agreement. Each PSU will consist of a right to receive a Share upon the achievement of such Performance Goals during such performance periods as the Plan Administrator will establish.

6.2

Terms of PSUs

The Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any PSU granted, the termination of a Participant’s employment and the amount of any payment or transfer to be made pursuant to any PSU will be determined by the Plan Administrator and by the other terms and conditions of any PSU, all as set forth in the applicable Award Agreement.

6.3

Performance Goals

The Plan Administrator will issue Performance Goals prior to the Date of Grant to which such Performance Goals pertain. The Performance Goals may be based upon the achievement of corporate, divisional or individual goals, and may be applied relative to performance relative to an index or comparator group, or on any other basis determined by the Plan Administrator. The Plan Administrator may modify the Performance Goals as necessary to align them with the Corporation’s corporate objectives. The Performance Goals may include a threshold level of performance below which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).

6.4

Delivery of Shares

Unless otherwise specified in the Award Agreement, as soon as practicable following the expiry of the applicable vesting period, or at such later date as may be determined by the Plan Administrator in its sole discretion at the time of grant, the Corporation shall issue fully paid and non-assessable Shares pursuant to the PSUs to the Participant or as the Participant may direct.

ARTICLE 7

RESTRICTED SHARES

7.1

Grant of Restricted Shares

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant Restricted Shares to any Participant, which shall be held by the Corporation or its designee in escrow until such time as the Restricted Period lapses. The terms and conditions of each Restricted Shares grant shall be evidenced by an Award Agreement.

Subject to the restrictions set forth in Section 7.2, except as otherwise set forth in the applicable Award Agreement, the Participant shall generally have the rights and privileges of a shareholder as to such Restricted Shares, including the right to vote such Restricted Shares. Unless otherwise set forth in a Participant’s Award Agreement, cash dividends and

stock dividends, if any, with respect to the Restricted Shares shall be withheld by the Corporation for the Participant’s account, and shall be subject to forfeiture until released, in each case, to be released at the same time and in the same proportion as the lapse of restrictions on the Restricted Shares to which such dividends relate. Except as otherwise determined by the Plan Administrator, no interest will accrue or be paid on the amount of any dividends withheld.

7.2

Restrictions on Transfer

In addition to any other restrictions set forth in a Participant’s Award Agreement, until such time that the Restricted Period for the Restricted Shares has lapsed pursuant to the terms of the Award Agreement, which Restricted Period the Plan Administrator may in its sole discretion accelerate at any time, the Participant shall not be permitted to sell, transfer, pledge, or otherwise encumber the Restricted Shares. Notwithstanding anything contained herein to the contrary, the Plan Administrator shall have the authority to remove any or all of the restrictions on the Restricted Shares whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of the Restricted Shares Award, such action is appropriate.

7.3

Effect of Termination of Employment or Services

Except as may otherwise be provided in the applicable Award Agreement or by the Plan Administrator, in the event of a Participant’s termination of employment or services with the Corporation and all Affiliates of the Corporation for any reason prior to the time that the Restricted Period for the Participant’s Restricted Shares has lapsed, as soon as practicable following such termination of employment or services, the Corporation shall repurchase from the Participant, and the Participant shall sell, all of such Participant’s Restricted Shares for which the Restricted Period has not lapsed at a purchase price equal to the cash amount, if any, paid by the Participant for the Restricted Shares, or if no cash amount was paid by the Participant for the Restricted Shares, such Restricted Shares shall be forfeited by the Participant to the Corporation for no consideration as of the date of such termination of employment or services.

ARTICLE 8

DEFERRED SHARE UNITS

8.1

Grant of Deferred Share Units

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant DSUs to any Participant.

All DSUs received by a Participant shall be credited to an account maintained for the Participant on the books of the Corporation, as of the Date of Grant. The terms and conditions of each DSU grant shall be evidenced by an Award Agreement.

8.2

Settlement of DSUs

DSUs shall be settled on the date established in the Award Agreement (the “Settlement Date”); provided, however that in no event shall a DSU Award be settled prior to the date of the applicable Participant’s separation from service. If the Award Agreement does not establish a date for the settlement of the DSUs, then the Settlement Date shall be the date of separation from service, subject to the delay that may be required under Section 13.6 below. On the Settlement Date for any DSU:

(a)

the Participant shall deliver a cheque payable to the Corporation (or payment by such other method as may be acceptable to the Corporation) representing payment of any amounts required by the Corporation to be withheld in connection with such settlement as contemplated by Section 10.3; and

(b)

the Corporation shall issue fully paid and non-assessable Shares pursuant to the DSUs to the Participant or as the Participant may direct.

ARTICLE 9

OTHER SHARE-BASED AWARDS

9.1

Grant of Other Share-Based Awards

The Plan Administrator may, from time to time, subject to the provisions of this Plan and such other terms and conditions as the Plan Administrator may prescribe, grant Other Share-Based Awards to any Participant. The terms and conditions of each Other Share-Based Award grant shall be evidenced by an Award Agreement. Each Other Share-Based Award shall consist of a right (1) which is other than an Award or right described in Article 4, 5, 6, 7 or 8 above and (2) which is denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares) as are deemed by the Plan Administrator to be consistent with the purposes of the Plan; provided, however, that such right will comply with applicable law. Subject to the terms of the Plan and any applicable Award Agreement, the Plan Administrator will determine the terms and conditions of Other Share-Based Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 9.1 will be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, other Awards, other property, or any combination thereof, as the Plan Administrator shall determine.

ARTICLE 10

ADDITIONAL AWARD TERMS

10.1

Dividend Equivalents

(a)

Unless otherwise determined by the Plan Administrator and set forth in the particular Award Agreement, RSUs, PSUs and DSUs shall be credited with dividend equivalents in the form of additional RSUs, PSUs and DSUs, respectively, as of each dividend payment date in respect of which normal cash dividends are paid on Shares. Such dividend equivalents shall be computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid per Share by the number of RSUs, PSUs and DSUs, as applicable, held by the Participant on the record date for the payment of such dividend, by (b) the Market Price at the close of the first business day immediately following the dividend record date, with fractions computed to three decimal places. Dividend equivalents credited to a Participant’s accounts shall vest in proportion to the RSUs, PSUs and DSUs to which they relate.

(b)

The Plan Administrator may in its discretion include in an Award Agreement applicable to an Other Share-Based Award a dividend equivalent right entitling the Participant to receive amounts equal to the normal cash dividends that would be paid, during the time such Award is outstanding and unexercised, on the Shares covered by such Award if such Shares were then outstanding and may decide whether such payments shall be made in cash, in Shares or in another form, whether they shall be conditioned upon the vesting of the Award to which they relate, the time or times at which they shall be made, and such other terms and conditions as the Plan Administrator shall deem appropriate.

(c)

The foregoing does not obligate the Corporation to declare or pay dividends on Shares and nothing in this Plan shall be interpreted as creating such an obligation.

10.2

Black-out Period

If an Award expires during, or within five business days after, a routine or special trading black-out period imposed by the Corporation to restrict trades in the Corporation’s securities, then, notwithstanding any other provision of this Plan, unless the delayed expiration would result in tax penalties, the Award shall expire ten business days after the trading black-out period is lifted by the Corporation.

10.3

Withholding Taxes

The granting or vesting or lapse of the Restricted Period of each Award under this Plan is subject to the condition that if at any time the Plan Administrator determines, in its discretion, that the satisfaction of withholding tax or other withholding liabilities is necessary or desirable in respect of such grant, vesting or lapse of the Restricted Period, such action is not effective unless such withholding has been effected to the satisfaction of the Plan Administrator. In such

circumstances, the Plan Administrator may require that a Participant pay to the Corporation the minimum amount as the Corporation or an Affiliate of the Corporation is obliged to remit to the relevant taxing authority in respect of the granting or vesting or lapse of the Restricted Period of the Award. Any such additional payment is due no later than the date on which such amount with respect to the Award is required to be remitted to the relevant tax authority by the Corporation or an Affiliate of the Corporation, as the case may be. Alternatively, and subject to any requirements or limitations under applicable law, the Corporation may (a) withhold such amount from any remuneration or other amount payable by the Corporation or any Designated Affiliate to the Participant, (b) require the sale of a number of Shares issued upon exercise, vesting, or settlement of such Award and the remittance to the Corporation of the net proceeds from such sale sufficient to satisfy such amount or (c) enter into any other suitable arrangements for the receipt of such amount.

10.4

Recoupment

Notwithstanding any other terms of this Plan, Awards may be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any clawback, recoupment or similar policy adopted by the Corporation or an Affiliate of the Corporation and in effect at the Date of Grant of the Award, or as otherwise required by law or the rules of the Exchange. The Committee may at any time waive the application of this Section 10.4 to any Participant or category of Participants.

ARTICLE 11

TERMINATION OF EMPLOYMENT OR SERVICES

11.1

Death or Disability

Unless otherwise determined by the Plan Administrator and set forth in an Award Agreement, if a Participant dies or becomes Disabled while an Employee, Director or Consultant:

(a)

a portion of the next instalment of any Awards due to vest (or for which the Restricted Period is due to lapse) shall immediately vest (or cease to be restricted) such portion to equal to the number of Awards next due to vest (or cease to be restricted) multiplied by a fraction the numerator of which is the number of days elapsed since the date of vesting (or lapse of Restricted Period) of the last instalment of the Awards (or if none have vested or have ceased to be restricted, the Date of Grant) to the date of Disability or death and the denominator of which is the number of days between the date of vesting (or lapse of Restricted Period) of the last instalment of the Awards (or if none have vested or have ceased to be restricted, the Date of Grant) and the date of vesting (or lapse of Restricted Period) of the next instalment of the Awards; and

(b)

subject to Subsections 11.1(a) and 11.1(c), any Awards held by the Participant that are not yet vested (or for which the Restricted Period has not lapsed) at the date of Disability or death shall be forfeited to the Corporation 30 days after the date of Disability or death; and

(c)

such Participant’s eligibility to receive further grants of Awards under the Plan ceases as of the date of Disability or death.

11.2

Termination of Employment or Services

Subject to Section 11.3, unless otherwise specified by the Plan Administrator at the time of granting an Award:

(a)

where, in the case of an Employee, an Individual Participant’s employment is terminated by the Corporation or a Designated Affiliate without Cause (whether such termination occurs with or without any or adequate reasonable notice, or with or without any or adequate compensation in lieu of such reasonable notice), then each Option held by the Individual Participant that has vested as of the Termination Date continues to be exercisable by the Individual Participant until the earlier of: (i) its Expiry Date; and (ii) the date that is 90 days after the Termination Date. Any Option or other Award held by the Individual Participant that has not vested (or for which the Restricted Period has not lapsed) as of the Termination Date is immediately forfeited and cancelled as of the Termination Date;

(b)

where, in the case of an Employee, an Individual Participant’s employment terminates by reason of voluntary resignation by the Individual Participant, then each Option held by the Individual Participant that has vested

as of the Termination Date continues to be exercisable by the Individual Participant until the earlier of: (i) its Expiry Date; and (ii) the date that is 90 days after the Termination Date. Any Option or other Award held by the Individual Participant that has not vested (or for which the Restricted Period has not lapsed) as of the Termination Date is immediately forfeited and cancelled as of the Termination Date;

(c)

where, in the case of an Employee, an Individual Participant’s employment terminates by reason of termination by the Corporation or a Designated Affiliate for Cause, then any Option or other Award held by the Individual Participant, whether or not it has vested (or the Restricted Period has lapsed) as of the Termination Date, is immediately forfeited and cancelled as of the Termination Date;

(d)

where, in the case of a Consultant, a Participant’s consulting agreement or arrangement terminates by reason of termination by the Corporation or a Designated Affiliate for any reason whatsoever other than (i) for breach of the consulting agreement or arrangement (whether or not such termination is effected in compliance with any termination provisions contained in the Participant’s consulting agreement or arrangement) or (ii) due to the death or Disability of the Individual Participant, then each Option held by the Participant that has vested as of the Termination Date continues to be exercisable by the Participant until the earlier of: (i) its Expiry Date; and (ii) the date that is 90 days after the Termination Date. Any Option or other Award held by the Participant that has not vested (or for which the Restricted Period has not lapsed) as of the Termination Date is immediately forfeited and cancelled as of the Termination Date;

(e)

where, in the case of a Consultant, a Participant’s consulting agreement or arrangement terminates by reason of: (i) termination by the Corporation or a Designated Affiliate for breach of the consulting agreement or arrangement (whether or not such termination is effected in compliance with any termination provisions contained in Participant’s consulting agreement or arrangement); or (ii) voluntary termination by the Participant (whether or not such termination is effected in compliance with any termination provisions contained in the Participant’s consulting agreement or arrangement), then any Option or other Award held by the Participant, whether or not such Option has vested (or the Restricted Period has lapsed) as of the Termination Date, is immediately forfeited and cancelled as of the Termination Date;

(f)

where, in the case of a Director, an Individual Participant ceases to hold office other than due to the Individual Participant’s death or Disability, then any Option held by the Individual Participant that has vested as of the Termination Date continue to be exercisable by the Individual Participant until the earlier of: (i) its Expiry Date; and (ii) the date that is 90 days after the Termination Date; except that this Section 11.2(f) will not apply if a Director is also a Consultant and such Individual Participant’s consulting agreement is not terminated or immediately following cessation becomes an Employee or Consultant. Any Option or other Award held by the Individual Participant that has not vested (or for which the Restricted Period has not lapsed) as of the Termination Date is immediately forfeited and cancelled as of the Termination Date; except for a Director who is also a Consultant and such Individual Participant’s consulting agreement is not terminated;

(g)

a Participant’s eligibility to receive further grants of Awards under this Plan ceases as of the date that the Corporation or a Designated Affiliate, as the case may be, provides the Participant with written notification that the Participant’s employment or consulting agreement or arrangement, as the case may be, is terminated in the circumstances contemplated by this Section 11.2, notwithstanding that such date may be prior to the Termination Date; and

(h)

notwithstanding Subsections 11.2(a) and 11.2(d), unless the Plan Administrator, in its discretion, otherwise determines, at any time and from time to time, Awards are not affected by a change of employment or consulting arrangement or directorship within or among the Corporation or a Designated Affiliate for so long as the Individual Participant continues to be an Employee of the Corporation or a Designated Affiliate or engaged as a Consultant to the Corporation or a Designated Affiliate.

11.3

Discretion to Permit Acceleration

Notwithstanding the provisions of Sections 11.1 and 11.2, the Plan Administrator may, in its discretion, at any time prior to, or following the events contemplated in such Sections, or in an employment agreement or other written agreement between the Corporation or a Designated Affiliate and the Participant, permit the acceleration of vesting (or lapse of Restricted Period) of any or all Awards, all in the manner and on the terms as may be authorized by the Plan Administrator.

11.4

Participants’ Entitlement

Except as otherwise provided in this Plan, Awards previously granted under this Plan are not affected by any change in the relationship between, or ownership of, the Corporation and an Affiliate of the Corporation. For greater certainty, all grants of Awards remain outstanding and are not affected by reason only that, at any time, an Affiliate of the Corporation ceases to be an Affiliate of the Corporation.

ARTICLE 12

EVENTS AFFECTING THE CORPORATION

12.1

General

The existence of any Awards does not affect in any way the right or power of the Corporation or its shareholders to make, authorize or determine any adjustment, recapitalization, reorganization or any other change in the Corporation’s capital structure or its business, or any amalgamation, combination, arrangement, merger or consolidation involving the Corporation, to create or issue any bonds, debentures, Shares or other securities of the Corporation or to determine the rights and conditions attaching thereto, to effect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or to effect any other corporate act or proceeding, whether of a similar character or otherwise, whether or not any such action referred to in this Article 12 would have an adverse effect on this Plan or on any Award granted hereunder.

12.2

Change in Control

Except as may be set forth in an employment agreement, or other written agreement between the Corporation or a Designated Affiliate and the Participant:

(a)

Notwithstanding anything else in this Plan or any Award Agreement, the Plan Administrator may, without the consent of any Participant, take such steps as it deems necessary or desirable, including to cause (i) the conversion or exchange of any outstanding Awards into or for, rights or other securities of substantially equivalent value (or greater value), as determined by the Plan Administrator in its discretion, in any entity participating in or resulting from a Change in Control; (ii) outstanding Awards to vest and become exercisable, realizable, or payable, or restrictions applicable to an Award to lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Plan Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iii) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Plan Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Corporation without payment); (iv) the replacement of such Award with other rights or property selected by the Board of Directors in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this subparagraph (a), the Plan Administrator will not be required to treat all Awards similarly in the transaction.

(b)

Notwithstanding Section 12.1, and unless otherwise determined by the Plan Administrator, if, as a result of a Change in Control, the Shares will cease trading on an Exchange, then the Corporation may terminate all of the Options granted under this Plan at the time of and subject to the completion of the Change in Control transaction by paying to each holder at or within a reasonable period of time following completion of such Change in Control transaction an amount for each Option equal to the fair market value of the Option held by such Participant as determined by the Plan Administrator, acting reasonably.

(c)

Notwithstanding Section 11.2, and except as otherwise provided in an employment agreement, or other written agreement between the Corporation or a Designated Affiliate and Employee, if within 12 months following the completion of a transaction resulting in a Change in Control, an Employee’s employment is terminated by the Corporation or a Designated Affiliate without cause, without any action by the Plan Administrator, the vesting (or Restricted Period) of all Awards held by such Employee shall immediately accelerate, and all Options shall be exercisable notwithstanding Section 4.4 until the earlier of: (i) the Expiry Date of such Award; and (ii) the date that is 90 days after the Termination Date.

12.3

Reorganization of Corporation’s Capital

Should the Corporation effect a subdivision or consolidation of Shares or any similar capital reorganization or a payment of a stock dividend (other than a stock dividend that is in lieu of a cash dividend), or should any other change be made in the capitalization of the Corporation that does not constitute a Change in Control and that would warrant the amendment or replacement of any existing Awards in order to adjust the number of Shares that may be acquired on the vesting of outstanding Awards and/or the terms of any Award in order to preserve proportionately the rights and obligations of the Participants holding such Awards, the Plan Administrator will, subject to the prior approval of the Exchange, authorize such steps to be taken as it may consider to be equitable and appropriate to that end.

12.4

Other Events Affecting the Corporation

In the event of an amalgamation, combination, arrangement, merger or other transaction or reorganization involving the Corporation and occurring by exchange of Shares, by sale or lease of assets or otherwise, that does not constitute a Change in Control and that warrants the amendment or replacement of any existing Awards in order to adjust the number of Shares that may be acquired on the vesting of outstanding Awards and/or the terms of any Award in order to preserve proportionately the rights and obligations of the Participants holding such Awards, the Plan Administrator will, subject to the prior approval of the TSX (if then listed on the TSX), authorize such steps to be taken as it may consider to be equitable and appropriate to that end.

12.5

Immediate Acceleration of Awards

Where the Plan Administrator determines that the steps provided in Sections 12.3 and 12.4 would not preserve proportionately the rights, value and obligations of the Participants holding such Awards in the circumstances or otherwise determines that it is appropriate, the Plan Administrator may, but is not required, to permit the immediate vesting of any unvested Awards and immediate lapse of any Restricted Period.

12.6

Issue by Corporation of Additional Shares

Except as expressly provided in this Article 12, neither the issue by the Corporation of shares of any class or securities convertible into or exchangeable for shares of any class, nor the conversion or exchange of such shares or securities, affects, and no adjustment by reason thereof is to be made with respect to the number of Shares that may be acquired as a result of a grant of Awards.

12.7

Fractions

No fractional Shares will be issued pursuant to an Award. Accordingly, if, as a result of any adjustment under this Article 12 or a dividend equivalent, a Participant would become entitled to a fractional Share, the Participant has the right to acquire only the adjusted number of full Shares and no payment or other adjustment will be made with respect to the fractional Shares, which shall be disregarded.

ARTICLE 13

U.S. TAXPAYERS

13.1

Provisions for U.S. Taxpayers

Awards granted under this Plan to U.S. Taxpayers may be non-qualified stock options or incentive stock options qualifying under Section 422 of the Code (“ISOs”). Each Award shall be designated in the Award Agreement as either an ISO or a non-qualified stock option.

13.2

ISOs

Subject to any limitations in Section 3.6, the aggregate number of Shares reserved for issuance as an ISO shall not exceed 10,000,000 Shares, and the terms and conditions of any ISOs granted to a U.S. Taxpayer on the Date of Grant hereunder, including the eligible recipients of ISOs, shall be subject to the provisions of Section 422 of the Code, and the terms, conditions, limitations and administrative procedures established by the Plan Administrator from time to time in accordance with this Plan. At the discretion of the Plan Administrator, ISOs may be granted to any employee of the Corporation, its parent or any subsidiary of the Corporation, as such terms are defined in Sections 424(e) and (f) of the Code.

13.3

ISO Grants to 10% Shareholders

Notwithstanding anything to the contrary in this Plan, if an ISO is granted to a person who owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the Corporation or of a subsidiary or parent, as such terms are defined in Section 424(e) and (f) of the Code, on the Date of Grant, the term of the Option shall not exceed five years from the time of grant of such Option and the Exercise Price shall be at least 110 percent (110%) of the Market Price of the Shares subject to the Option.

13.4

$100,000 Per Year Limitation for ISOs

To the extent the aggregate Market Price as at the Date of Grant of the Shares for which ISOs are exercisable for the first time by any person during any calendar year (under all plans of the Corporation) exceeds $100,000, such excess ISOs shall be treated as non-qualified stock options.

13.5

Disqualifying Dispositions

Each person awarded an ISO under this Plan shall notify the Corporation in writing immediately after the date he or she makes a disposition of any Shares acquired pursuant to the exercise of such ISO. The Corporation may, if determined by the Plan Administrator and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise of an ISO as agent for the applicable person until the end of the period described in the preceding sentence, subject to complying with any instructions from such person as to the sale of such Share.

13.6

Section 409A of the Code

This Plan will be construed and interpreted to be exempt from, or where not so exempt, to comply with Section 409A of the Code to the extent required to preserve the intended tax consequences of this Plan. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A of the Code, the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A of the Code. The Corporation reserves the right to amend this Plan to the extent it reasonably determines is necessary in order to preserve the intended tax consequences of this Plan in light of Section 409A of the Code and any regulations or guidance under that section. In no event will the Corporation be responsible if Awards under this Plan result in adverse tax consequences to a U.S. Taxpayer under Section 409A of the Code. Notwithstanding any provisions of the Plan to the contrary, in the case of any “specified employee” within the meaning of Section 409A of the Code who is a U.S. Taxpayer, distributions of non-qualified deferred compensation under Section 409A of the Code made in connection with a “separation from service” within the meaning set forth in Section 409A of the Code may not be made prior to the date which is 6 months after the date of separation from service (or, if earlier, the date of death of the U.S. Taxpayer). Any amounts subject to a delay in payment pursuant to the preceding sentence shall be paid as soon practicable following such 6-month anniversary of such separation from service.

13.7

Requirement of Notification of Election Under Section 83(b) of the Code

If a Participant, in connection with the acquisition of Restricted Shares under the Plan, is permitted under the terms of the Award Agreement to make the election permitted under Section 83(b) of the Code (i.e., an election to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code notwithstanding the continuing transfer restrictions) and the Participant makes such an election, the Participant shall notify the Corporation of such election within ten (10) days of filing notice of the election with the Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.

ARTICLE 14

AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

14.1

Amendment, Suspension, or Termination of the Plan

The Plan Administrator may from time to time, without notice and without approval of the holders of voting shares of the Corporation, amend, modify, change, suspend or terminate the Plan or any Awards granted pursuant to the Plan as it, in its discretion determines appropriate, provided, however, that:

(a)

no such amendment, modification, change, suspension or termination of the Plan or any Awards granted hereunder may materially impair any rights of a Participant or materially increase any obligations of a Participant under the Plan without the consent of the Participant, unless the Plan Administrator determines such adjustment is required or desirable in order to comply with any applicable Securities Laws or Exchange requirements; and

(b)

any amendment that would cause an Award held by a U.S. Taxpayer be subject to the additional tax penalty under Section 409A(1)(b)(i)(II) of the Code shall be null and void ab initio.

14.2

Shareholder Approval

Notwithstanding Section 14.1, approval of the holders of the voting shares of the Corporation shall be required for any amendment, modification or change that:

(a)

increases the percentage of Shares reserved for issuance under the Plan, except pursuant to the provisions in the Plan which permit the Plan Administrator to make equitable adjustments in the event of transactions affecting the Corporation or its capital;

(b)

increases or removes the 10% limits on Shares issuable or issued to insiders as set forth in Subsection 3.7(a);

(c)

reduces the exercise price of an Award (for this purpose, a cancellation or termination of an Award of a Participant prior to its Expiry Date for the purpose of reissuing an Award to the same Participant with a lower exercise price shall be treated as an amendment to reduce the exercise price of an Award) except pursuant to the provisions in the Plan which permit the Plan Administrator to make equitable adjustments in the event of transactions affecting the Corporation or its capital;

(d)

extends the term of an Award beyond the original Expiry Date (except where an Expiry Date would have fallen within a blackout period applicable to the Participant or within 5 business days following the expiry of such a blackout period);

(e)

permits an Award to be exercisable beyond 10 years from its Date of Grant (except where an Expiry Date would have fallen within a blackout period of the Corporation);

(f)

increases or removes the limits on the participation of Directors;

(g)

permits Awards to be transferred to a Person other than a Permitted Assign or for normal estate settlement purposes; or

(h)

deletes or reduces the range of amendments which require approval of the holders of voting shares of the Corporation under this Section 14.2.

14.3

Permitted Amendments

Without limiting the generality of Section 14.1, but subject to Section 14.2, the Plan Administrator may, without shareholder approval, at any time or from time to time, amend the Plan for the purposes of:

(a)

making any amendments to the general vesting provisions or Restricted Period of each Award;

(b)

making any amendments to the provisions set out in Article 11;

(c)

making any amendments to add covenants of the Corporation for the protection of Participants, as the case may be, provided that the Plan Administrator shall be of the good faith opinion that such additions will not be prejudicial to the rights or interests of the Participants, as the case may be;

(d)

making any amendments not inconsistent with the Plan as may be necessary or desirable with respect to matters or questions which, in the good faith opinion of the Plan Administrator, having in mind the best interests of the Participants and Directors, it may be expedient to make, including amendments that are desirable as a result of changes in law in any jurisdiction where a Participant resides, provided that the Plan Administrator shall be of the opinion that such amendments and modifications will not be prejudicial to the interests of the Participants and Directors; or

(e)

making such changes or corrections which, on the advice of counsel to the Corporation, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error, provided that the Plan Administrator shall be of the opinion that such changes or corrections will not be prejudicial to the rights and interests of the Participants.

ARTICLE 15

MISCELLANEOUS

15.1

Legal Requirement

The Corporation is not obligated to grant any Awards, issue any Shares or other securities, make any payments or take any other action if, in the opinion of the Plan Administrator, in its sole discretion, such action would constitute a violation by a Participant, Director or the Corporation of any provision of any applicable statutory or regulatory enactment of any government or government agency or the requirements of any Exchange upon which the Shares may then be listed.

15.2

No Other Benefit

No amount will be paid to, or in respect of, a Participant under the Plan to compensate for a downward fluctuation in the price of a Share, nor will any other form of benefit be conferred upon, or in respect of, a Participant for such purpose.

15.3

Rights of Participant

No Participant has any claim or right to be granted an Award and the granting of any Award is not to be construed as giving a Participant a right to remain as an employee, consultant or director of the Corporation or an Affiliate of the Corporation. No Participant has any rights as a shareholder of the Corporation in respect of Shares issuable pursuant to any Award until the allotment and issuance to such Participant, or as such Participant may direct, of certificates representing such Shares.

15.4

Corporate Action

Nothing contained in this Plan or in an Award shall be construed so as to prevent the Corporation from taking corporate action which is deemed by the Corporation to be appropriate or in its best interest, whether or not such action would have an adverse effect on this Plan or any Award.

15.5

Conflict

In the event of any conflict between the provisions of this Plan and an Award Agreement, the provisions of this Plan shall govern. In the event of any conflict between or among the provisions of this Plan, an Award Agreement and (i) an employment agreement or other written agreement between the Corporation or a Designated Affiliate and a Participant which has been approved by the Chief Executive Officer of the Corporation (or where the Participant is the Chief Executive Officer, approved by a Director), the provisions of the employment agreement or other written agreement shall govern and (ii) any other employment agreement or other written agreement between the Corporation or a Designated Affiliate and a Participant, the provisions of this Plan shall govern.

15.6

Participant Information

Each Participant shall provide the Corporation with all information (including personal information) required by the Corporation in order to administer to the Plan. Each Participant acknowledges that information required by the

Corporation in order to administer the Plan may be disclosed to any custodian appointed in respect of the Plan and other third parties, and may be disclosed to such persons (including persons located in jurisdictions other than the Participant’s jurisdiction of residence), in connection with the administration of the Plan. Each Participant consents to such disclosure and authorizes the Corporation to make such disclosure on the Participant’s behalf.

15.7

Participation in the Plan

The participation of any Participant in the Plan is entirely voluntary and not obligatory and shall not be interpreted as conferring upon such Participant any rights or privileges other than those rights and privileges expressly provided in the Plan. In particular, participation in the Plan does not constitute a condition of employment or engagement nor a commitment on the part of the Corporation to ensure the continued employment or engagement of such Participant. The Plan does not provide any guarantee against any loss which may result from fluctuations in the market value of the Shares. The Corporation does not assume responsibility for the income or other tax consequences for the Participants and Directors and they are advised to consult with their own tax advisors.

15.8

International Participants

With respect to Participants who reside or work outside Canada and the United States, the Plan Administrator may, in its sole discretion, amend, or otherwise modify, without shareholder approval, the terms of the Plan or Awards with respect to such Participants in order to conform such terms with the provisions of local law, and the Plan Administrator may, where appropriate, establish one or more sub-plans to reflect such amended or otherwise modified provisions.

15.9

Successors and Assigns

The Plan shall be binding on all successors and assigns of the Corporation and its Designated Affiliates.

15.10

General Restrictions and Assignment

Except as required by law, the rights of a Participant under the Plan are not capable of being assigned, transferred, alienated, sold, encumbered, pledged, mortgaged or charged and are not capable of being subject to attachment or legal process for the payment of any debts or obligations of the Participant unless otherwise approved by the Plan Administrator.

15.11

Severability

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be severed from the Plan.

15.12

Notices

All written notices to be given by the Participant to the Corporation shall be delivered personally, e-mail or mail, postage prepaid, addressed as follows:

Amaya Inc.

7600 TransCanada Hwy

Pointe-Claire, QC H9R 1C8

Canada

Attention: Corporate Secretary

With a copy to the Chief Financial Officer

Fax: (514) 744-5114

All notices to the Participant will be addressed to the principal address of the Participant on file with the Corporation. Either the Corporation or the Participant may designate a different address by written notice to the other. Such notices are deemed to be received, if delivered personally or by e-mail, on the date of delivery, and if sent by mail, on the fifth business day following the date of mailing. Any notice given by either the Participant or the Corporation is not binding on the recipient thereof until received.

15.13

Effective Date

This Plan becomes effective on a date to be determined by the Plan Administrator, subject to the approval of the shareholders of the Corporation.

15.14

Governing Law

This Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the Province of Québec and the federal laws of Canada applicable therein.

15.15

Submission to Jurisdiction

The Corporation and each Participant irrevocably submits to the exclusive jurisdiction of the courts of competent jurisdiction in the Province of Québec in respect of any action or proceeding relating in any way to the Plan, including with respect to the grant of Awards and any issuance of Shares made in accordance with the Plan.

SCHEDULE “E”

ORDINARY RESOLUTION TO AMEND THE STOCK OPTION PLAN

“BE IT RESOLVED AS AN ORDINARY RESOLUTION OF THE SHAREHOLDERS THAT:

The proposed amendment to the current stock option plan of the Corporation (the “Stock Option Plan”) to extend by twenty-four (24) months the expiry date of a total of 9,413,503 outstanding options granted pursuant to the Stock Option Plan (the “Stock Option Plan Amendment”) is hereby ratified, authorized and approved. The Stock Option Plan Amendment will (i) amend subsection 6.3.4 of the Stock Option Plan by deleting the contents of such subsection and replacing it with the following: “Except as provided in this subsection, the maximum term shall not exceed five (5) years from the Grant Date. The Option Term of each Option held by any Participant who is a Canadian Taxpayer, and whose Options have not yet expired or been exercised, shall be the date previously determined by the Board or prescribed under the Plan, and as set forth in the particular Grant Agreement, plus twenty-four (24) months. Any Participant that is a Foreign Taxpayer must elect to have this extension apply to any or all of such Participant’s Options granted under the Option Plan, and which have not yet expired or been exercised, by giving written notice to the Corporation of such election, which such election is also subject to Board approval”, and (ii) add the following definitions in their appropriate alphabetical order, and re-arrange all subsections in the correct alphabetical order under Section 2.1 of the Stock Option Plan: “Canadian Taxpayer” shall mean a Participant who is subject to taxation with respect to an Option at the Grant Date under Canadian tax law, and who is not subject to taxation under any other applicable foreign tax law with respect to the Option at the Grant Date, and “Foreign Taxpayer” shall mean a Participant who is subject to taxation with respect to an Option at the Date of Grant under any applicable foreign tax law, including if such Participant is also subject to applicable Canadian tax law.

E-1

LOGO

EX-99.26

Exhibit 99.26

LOGO

8th Floor, 100 University Avenue

Toronto, Ontario M5J 2Y1

www.computershare.com

Security Class

Holder Account Number

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Form of Proxy - Annual and Special Meeting of Shareholders of Amaya Inc. to be held on June 22, 2015 ( the “Meeting”)

This Form of Proxy is solicited by and on behalf of Management of Amaya Inc.

Notes to proxy

Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the Meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).

If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you must sign this proxy with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this proxy.

3.	This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.

4.	If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.

5.	The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management.

The securities represented by this proxy will be voted in favour or withheld from voting or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.

7.	This proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before the Meeting or any adjournment or postponement thereof.

8.	This proxy should be read in conjunction with the accompanying documentation provided by Management.


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Proxies submitted must be received by 2:00 pm, Eastern Time, on June 18, 2015.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

LOGO

• Call the number listed BELOW from a touch tone telephone.

1-866-732-VOTE (8683) Toll Free

• Go to the following web site: www.investorvote.com

• Smartphone?

Scan the QR code to vote now.

• You can enroll to receive future securityholder communications electronically by visiting www.computershare.com/eDelivery and clicking on “eDelivery Signup”.

If you vote by telephone or the Internet, DO NOT mail back this proxy.

Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

Voting by mail or by Internet are the only methods by which a holder may appoint a person as proxyholder other than the Management nominees named on the reverse of this proxy. Instead of mailing this proxy, you may choose one of the two voting methods outlined above to vote this proxy.

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below.

CONTROL NUMBER

015BLB


+		+

Appointment of Proxyholder

I/We, being holder(s) of Amaya Inc. hereby appoint:

Mr. David Baazov, or failing him, Mr. Daniel Sebag

Print the name of the person you are appointing if this person is someone other than the Management Nominees listed herein.

as my/our proxyholder with full power of substitution and to attend, act and to vote for and on behalf of the shareholder in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual and Special Meeting of Shareholders of Amaya Inc. to be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec H3B 4W5, Canada on June 22, 2015 at 2:00 p.m. (Eastern Time), and at any adjournment or postponement thereof.

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1. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. David Baazov

02. Daniel Sebag

03. Gen. Wesley K. Clark

Fold

04. Divyesh (Dave) Gadhia

05. Harlan Goodson

06. Dr. Aubrey Zidenberg

For

Withhold

2. Appointment of Auditors

Appointment of Deloitte LLP, Chartered Accountants as the auditor of Amaya Inc., until the close of the next annual meeting of shareholders and to authorize the directors to fix its remuneration.

For

Against

3. Approval of New Equity Incentive Plan and Stock Option Plan Amendment

Approving an ordinary resolution, the full text of which is reproduced in Schedule “B” to the accompanying management information circular of Amaya Inc. (the “Information Circular”), ratifying the adoption of a new equity incentive plan of Amaya Inc. in the form set out at Schedule “D” of the Information Circular and amending the terms of the current stock option plan of Amaya Inc. (the “Stock Option Plan”) to limit the number of shares issuable thereunder to the number of options currently outstanding thereunder.

For

Against

4. Approval of Stock Option Plan Amendment

Approving an ordinary resolution of disinterested shareholders, the full text of which is reproduced in Schedule “E” to the Information Circular, approving amendments to the Stock Option Plan to extend the expiry date of certain options granted thereunder.

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	Signature(s)	Date
Authorized Signature(s) – This section must be completed for your instructions to be executed.
I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting. If no voting instructions are indicated above, this proxy will be voted as recommended by Management.		MM/DD/YY

Interim Financial Statements – Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.

Annual Financial Statements – Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s Discussion and Analysis

by mail.

Information Circular – Mark this box if you would like to receive the Information Circular by mail for the next shareholders meeting.

If you are not mailing back your proxy, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.


		A G J Q		0 5 3 2 3 7		A R 1		+

015BMD

EX-99.27

Exhibit 99.27

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8th Floor, 100 University Avenue

Toronto, Ontario M5J 2Y1

www.computershare.com

Security Class

Holder Account Number

Intermediary

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Voting Instruction Form (“VIF”) - Annual and Special Meeting of Shareholders of Amaya Inc. to be held on June 22, 2015

NON-REGISTERED (BENEFICIAL) SECURITYHOLDERS

We are sending to you the enclosed proxy-related materials that are held on your behalf by the intermediary identified above that relate to a meeting of the holders of the securities of Amaya Inc. to be held on June 22, 2015 (the “Meeting”). Unless you attend the Meeting and vote in person, your securities can be voted only by Management, as proxy holder of the registered holder, in accordance with your instructions.

We are prohibited from voting these securities on any of the matters to be acted upon at the Meeting without your specific voting instructions. In order for these securities to be voted at the Meeting, it will be necessary for us to have your specific voting instructions. Please complete and return the information requested in this VIF to provide your voting instructions to us promptly.

If you want to attend the Meeting and vote in person, please write your name in the place provided for that purpose in this form. You can also write the name of someone else whom you wish to attend the Meeting and vote on your behalf. Unless prohibited by law, the person whose name is written in the space provided will have full authority to present matters to the Meeting and vote on all matters that are presented at the Meeting, even if those matters are not set out in this form or in the management information circular of the Corporation dated May 14, 2015 (the “Information Circular”). Consult a legal advisor if you wish to modify the authority of that person in any way. If you require help, please contact the Registered Representative who services your account.

This VIF should be signed by you in the exact manner as your name appears on the VIF. If these voting instructions are given on behalf of a body corporate set out the full legal name of the body corporate, the name and position of the person giving voting instructions on behalf of the body corporate and the address for service of the body corporate.

5.	If this VIF is not dated, it will be deemed to bear the date on which it is mailed by management to you.

When properly signed and delivered, securities represented by this VIF will be voted as directed by you, however, if such a direction is not made in respect of any matter, the VIF will direct the voting of the securities to be made as recommended in the documentation provided by Management for the Meeting.

7.	This VIF confers discretionary authority on the appointee to vote as the appointee sees fit in respect of amendments or variations to matters identified in the Notice of Meeting or other matters as may properly come before the Meeting or any adjournment thereof.

8.	Your voting instructions will be recorded on receipt of the VIF.

9.	By providing voting instructions as requested, you are acknowledging that you are the beneficial owner of, and are entitled to instruct us with respect to the voting of, these securities.

10.	If you have any questions regarding the enclosed documents, please contact the Registered Representative who services your account.

11.	This VIF should be read in conjunction with the Information Circular and other proxy materials provided by Management.


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VIFs submitted must be received by 2:00 pm, Eastern Time, on June 18, 2015.

VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!

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• Call the number listed BELOW from a touch tone telephone.

1-866-734-VOTE (8683) Toll Free

• Go to the following web site: www.investorvote.com

• Smartphone?

Scan the QR code to vote now.

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If you vote by telephone or the Internet, DO NOT mail back this VIF.

Voting by mail may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.

Voting by mail or by Internet are the only methods by which a holder may choose an appointee other than the Management appointees named on the reverse of this VIF. Instead of mailing this VIF, you may choose one of the two voting methods outlined above to vote this VIF.

To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below.

CONTROL NUMBER

015BPE


+		+

Appointee(s)

I/We, being holder(s) of Amaya Inc. hereby appoint:

Mr. David Baazov, or failing him, Mr. Daniel Sebag

If you wish to attend in person or appoint someone else to attend on your behalf, print your name or the name of your appointee in this space (see Note #3 on reverse).

as my/our appointee to attend, act and to vote in accordance with the following direction (or if no directions have been given, as the appointee sees fit) and all other matters that may properly come before the Annual and Special Meeting of Shareholders of Amaya Inc. to be held at the offices of Osler, Hoskin & Harcourt LLP, 1000 De La Gauchetière Street West, Suite 2100, Montréal, Québec H3B 4W5, Canada on June 22, 2015 at 2:00 p.m. (Eastern Time), and at any adjournment or postponement thereof.

LOGO

1. Election of Directors

For

Withhold

For

Withhold

For

Withhold

01. David Baazov

02. Daniel Sebag

03. Gen. Wesley K. Clark

Fold

04. Divyesh (Dave) Gadhia

05. Harlan Goodson

06. Dr. Aubrey Zidenberg

For

Withhold

2. Appointment of Auditors

Appointment of Deloitte LLP, Chartered Accountants as the auditor of Amaya Inc., until the close of the next annual meeting of shareholders and to authorize the directors to fix its remuneration.

For

Against

3. Approval of New Equity Incentive Plan and Stock Option Plan Amendment

For

Against

4. Approval of Stock Option Plan Amendment

Fold


	Signature(s)	Date
Authorized Signature(s) - This section must be completed for your instructions to be executed.
If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this VIF with signing capacity stated.		MM/DD/YY


Interim Financial Statements – Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨		Annual Financial Statements – Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s Discussion and Analysis by mail.		¨

If you are not mailing back your VIF, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.


		A G J Q		0 5 3 2 3 7		A R 1		+

015BQD

EX-99.28

Exhibit 99.28

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	Consolidated Financial Statements (Unaudited)			1

TABLE OF CONTENTS		Consolidated Statements of Financial Position		1
		Consolidated Statements of Changes in Equity		2
		Consolidated Statements of Comprehensive Income (Loss)		3
		Consolidated Statements of Cash Flows		4

	Notes to Consolidated Financial Statements			5

		1.	Nature of business	5

		2.	Private Placement	5

		3.	Summary of significant accounting policies	5

		4.	Change In Accounting Policies	20

		5.	Recent Accounting Pronouncements	21

		6.	Cash and cash equivalents	22

		7.	Investment tax credits receivable	22

		8.	Accounts receivable	22

		9.	Inventories	23

		10.	Receivable under finance lease	23

		11.	Assets and liabilities classified as held for sale	23

		12.	Restricted cash	24

		13.	Investments	24

		14.	Goodwill and intangible assets	25

		15.	Property plant and equipment	27

		16.	Income taxes	28

		17.	Credit facility	29

		18.	Accounts payable and accrued liabilities	29

		19.	Provisions	30

		20.	Long-term debt	30

		21.	Equipment Financing	33

		22.	Commitments	33

		23.	Share capital	33

		24.	Contributed surplus	34

		25.	Major customers	36

		26.	Financial instruments	37

		27.	Fair value	38

		28.	Capital Management	39

		29.	Geographic information	39

		30.	Statement of cash-flows	40

		31.	Related party transactions	40

		32.	Contingency	41

		33.	Revenues	41

		34.	Business Combination	42

		35.	Expenses Classified By Nature	43

		36.	Net earnings per share	44

		37.	Sale of WagerLogic Malta Holdings Ltd.	44

		38.	Subsequent Events	45

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Consolidated Financial Statements (Unaudited)

Consolidated Statements of Financial Position


	March 31, 2014 $		December 31, 2013 $

ASSETS
Current
Cash and cash equivalents (note 6)		119,271,238		93,640,348
Investment tax credits receivable (note 7)		119,600		111,612
Accounts receivable (note 8)		48,849,150		47,460,201
Income tax receivable		806,453		520,482
Inventories (note 9)		9,931,024		7,594,918
Current maturity of receivable under finance lease (note 10)		4,905,785		4,865,300
Prepaid expenses and deposits		5,404,329		4,173,048
Assets classified as held for sale (note 11)		36,639,611		38,368,898

		225,927,190		196,734,807

Restricted cash (note 12)		134,823		130,904
Investments ( note 13)		13,477,207		10,582,448
Goodwill and intangible assets (note 14)		193,901,659		163,037,073
Property and equipment (note 15)		45,217,587		40,520,993
Deferred development costs (net of accumulated amortization of $3,749,307; 2013 - $3,039,134)		4,382,965		3,817,802
Receivable under finance lease (note 10)		10,341,971		10,004,038
Investment tax credit receivable long-term (note 7)		2,701,442		2,672,567
Deferred income taxes (note 16)		12,977,866		13,330,372
Promissory note (note 37)		10,000,000		—

		519,062,710		440,831,004


LIABILITIES
Current
Accounts payable and accrued liabilities (note 18)		34,346,744		27,477,031
Provisions (note 19)		13,089,579		3,684,900
Customer deposits		5,107,991		4,453,213
Income tax payable		1,409,989		1,763,060
Deferred revenue		520,180		—
Current maturity of long-term debt (note 20)		2,185,463		2,387,557
Current maturity of equipment financing (note 21)		1,264,119		1,132,500
Liabilities classified as held for sale (note 11)		3,351,070		4,638,272

		61,275,135		45,536,533

Accounts payable and accrued liabilities (note 18)		596,110		—
Deferred revenue		1,704,229		249,132
Long-term debt (note 20)		199,358,181		192,798,839
Equipment financing (note 21)		590,444		550,639
Provisions (note 19)		1,283,078		1,546,652
Holdback of purchase price (note 34)		7,738,500		—
Deferred income taxes (note 16)		8,974,653		5,802,246

		281,520,330		246,484,041

Commitments (note 22) and contingency (note 32)

SHAREHOLDERS’ EQUITY

Share capital (note 23)		221,036,710		220,683,283
Contributed surplus (note 24)		5,051,343		4,213,957
Accumulated other comprehensive income(loss)		11,198,740		8,837,746
Retained Earnings (Deficit)		255,587		(39,388,023	)

		237,542,380		194,346,963

		519,062,710		440,831,004

See accompanying notes

Approved and authorized for issue on behalf of the Board on May 15, 2014


(Signed) “Daniel Sebag”, Director				(Signed) “David Baazov”, Director
Daniel Sebag, CFO				David Baazov, CEO

Consolidated Statements of Changes in Equity

For the three month period ended March 31, 2014


	Number			Share capital Amount $			Contributed Surplus $			Retained Earnings (Deficit) $			Accumulated Other Comprehensive Income $			Total Shareholders’ Equity $
Balance – January 1, 2013		79,359,759			154,771,764			2,351,415			(10,708,331	)		(835,371	)		145,579,477
Deferred income taxes in relation to transaction costs		—			(83,000	)		450,000			—			—			367,000
Issue of equity component of private placement of debt, net of transaction costs		—			—			2,963,024			—			—			2,963,024
Issue of common shares in relation to exercised warrants		131,250			403,779			(10,029	)		—			—			393,750
Issue of common shares in relation to exercised employee stock options		106,750			183,019			(69,984	)		—			—			113,035
Stock based compensation		—			—			431,622			—			—			431,622
Issue of common shares in relation to conversion of convertible debentures		7,572,912			24,612,000			(493,165	)		493,167						24,612,002
Share repurchase		(660,800	)		(3,243,999	)		—			—			—			(3,243,999	)
Net loss		—			—			—			(7,440,841	)		—			(7,440,841	)
Other comprehensive income (loss)		—			—			—			—			2,779,575			2,779,575

Balance – March 31, 2013		86,509,871			176,643,563			5,622,883			(17,656,005	)		1,944,204			166,554,645


Balance – January 1, 2014		94,078,297			220,683,283			4,213,957			(39,388,023	)		8,837,746			194,346,963
Deferred income taxes in relation to transaction costs		—			(118,000	)		181,091			—			—			63,091
Issue of common shares in relation to exercised warrants		4,800			39,877			(9,877	)		—			—			30,000
Issue of common shares in relation to exercised employee stock options		120,923			431,550			(87,391	)		—			—			344,159
Stock based compensation		—			—			753,563			—			—			753,563
Net Income		—			—			—			39,643,610			—			39,643,610
Other comprehensive income (loss)		—			—			—			—			2,360,994			2,360,994

Balance – March 31, 2014		94,204,020			221,036,710			5,051,343			255,587			11,198,740			237,542,380

See accompanying notes

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Consolidated Statements of Comprehensive Income (Loss)


				For the three month period ended March 31,
	2014			2013
	$			$
Revenues (note 33)		41,202,223			38,053,247

Expenses
Cost of products (note 35)		1,972,476			118,552
Selling (note 35)		4,148,329			3,701,005
General and administrative (note 35)		38,757,001			34,398,577
Financial (note 35)		1,061,025			6,212,059
Acquisition-related costs (note 35)		3,653,589			309,479

		49,592,420			44,739,672

Gain on sale of investments (note 37)		49,373,224			—
Income (loss) from investments		585,078			—

Earnings (loss) before income taxes		41,568,105			(6,686,425	)
Current income taxes (note 16)		4,103,602			689,914
Deferred income taxes (note 16)		(2,179,107	)		64,502

Net earnings (loss)		39,643,610			(7,440,841	)

Other Comprehensive Income (loss), net of tax
Foreign currency translation gain (loss)		2,360,994			2,779,575

		2,360,994			2,779,575

Total Comprehensive Income (loss)		42,004,604			(4,661,266	)

Basic earnings (loss) per common share (note 36)	$	0.42		$	(0.09	)

Diluted earnings (loss) per common share (note 36)	$	0.38		$	(0.09	)

See accompanying notes

Consolidated Statements of Cash Flows


				For the three month period ended March 31,
	2014			2013
	$			$

Operating activities
Net earnings (loss)		39,643,610			(7,440,841	)
Interest accretion on convertible debentures		—			1,493,155
Interest accretion on long term debt		443,100			629,461
Loss on sale of property and equipment		218,264			7,754
Loss on sale of intangibles		824			37,253
Sale of previously leased gaming machines		439,632			—
Sale of previously leased third party licenses		61,580			—
Write off of licenses and software		6,271			—
Unrealised loss (gain) on foreign exchange		(481,609	)		550,767
Depreciation of property and equipment		3,666,343			3,395,010
Amortization of intangible assets		5,402,718			4,125,252
Amortization of deferred development costs		710,173			131,482
Transfer of inventory to property and equipment		—			(144,115	)
Deferred income taxes		(2,179,107	)		64,502
Stock-based compensation		753,563			431,622
Finance lease		(344,017	)		806,909
Gain on sale of investments (note 37)		(49,373,224	)		—
Accrued transaction costs		—			(62,866	)

		(1,031,879	)		4,025,345
Changes in non-cash operating elements of working capital (note 30)		2,284,068			3,456,110

		1,252,189			7,481,455


Financing activities
Proceeds from long term debt		—			28,540,956
Issuance of capital stock in relation with exercised warrants		30,000			393,750
Issuance of capital stock in relation with exercised employee stock options		344,159			113,035
Repurchase of shares		—			(3,243,999	)
Transaction costs related to the issuance of long term debt		—			(372,190	)
Repayment of long-term debt		(726,397	)		(1,642,113	)

		(352,238	)		23,789,439


Investing activities
Deferred development costs		(1,899,756	)		(2,325,822	)
Additions to property and equipment		(2,465,456	)		(3,365,282	)
Acquired intangible assets		(2,476,515	)		(2,780,956	)
Proceeds from sale of license and software		117,846			—
Proceeds from sale of property and equipment		—			82,879
Disposal of license and software		—			(726	)
Purchase of investments		(2,210,759	)		—
Proceeds from sale of investments (note 37)		52,500,000			—
Unrealized gain on marketable securities		(684,000	)		—
Investment in subsidiaries		(18,988,406	)		—

		23,892,954			(8,389,907	)

Increase (Decrease) in cash and cash equivalents		24,792,905			22,880,987
Cash and cash equivalents – beginning of period		93,640,348			31,327,745
Unrealized foreign exchange difference in cash and cash equivalents		837,985			(192,761	)

Cash and cash equivalents – end of period		119,271,238			54,015,971

See accompanying notes

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Notes to Consolidated Financial Statements

1. Nature of business

Founded in 2004, Amaya Gaming Group Inc. (“Amaya” or “Corporation”) is engaged in the design, development, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide. Amaya’s objective is to become a leading provider of technology-based gaming solutions while maintaining a steadfast commitment to the highest levels of integrity and responsibility. Amaya provides products, services and systems to land-based and online gaming operators, government bodies and the hospitality industry. Amaya has one reportable segment, Diversified Gaming Solutions, which in the first quarter ended March 31, 2014 consisted primarily of the following categories of solutions and services: interactive gaming solutions, land-based gaming solutions, and lottery solutions. Amaya’s solutions are designed to provide end users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, and thereby improve the profitability, productivity, security and brand of the operator. Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions. Amaya acquired Chartwell Technology Inc. (“Chartwell”) in July 2011, CryptoLogic Ltd. (“CryptoLogic”) in April 2012, Ongame Network Ltd. (“Ongame”) in November 2012, Cadillac Jack Inc. (“Cadillac Jack”) in November 2012, and Diamond Game Enterprises (“Diamond Game”) in February, 2014, all of which provide technology, content and services to a diversified base of customers in the regulated gaming industry.

Throughout its history, Amaya has continually strived to improve its offering of solutions and services to address both the markets it serves as well as new domestic and international opportunities.

The Corporation is listed on the TSX and is incorporated and domiciled in Quebec, Canada. The Corporation’s head and registered office is located at 7600 Trans Canada, Pointe-Claire, Quebec, H9R 1C8.

2. Private Placement

On July 13, 2013, the Corporation completed a private placement of 6.4 million common shares at a price of $6.25 per common share for total gross proceeds of $40 million. The private placement was conducted through a syndicate of underwriters. The net proceeds from the private placement will be used for general corporate purposes and working capital to assist in the implementation of the Corporation’s growth strategy and the expansion of its international activities. The common shares issued under the private placement were subject to a statutory resale restriction until November 12, 2013. The total transaction costs of the offering, including underwriter’s compensation, amounted to $2,514,756.

3. Summary of significant accounting policies

BASIS OF PRESENTATION

These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Standards Interpretations Committee (“IFRIC”).

These consolidated financial statements were prepared on a going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments.

PRINCIPLES OF CONSOLIDATION

A subsidiary is an entity controlled by the Corporation, i.e. the Corporation is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its current ability to direct the entity’s relevant activities (power over the investee).

The existence and effect of substantive potential voting rights that the Corporation has the practical ability to exercise (i.e. substantive rights) are considered when assessing whether the Corporation controls another entity.

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. A wholly owned subsidiary is an entity over which the Corporation has control, where control is defined as the power to govern financial and operating policies. On consolidation, all significant inter-entity transactions and balances have been eliminated. As at March 31, 2014, the consolidated financial statements included 55 wholly owned subsidiaries.

Upon loss of control of a subsidiary, the Corporation’s profit or loss is calculated as the difference between (i) the fair value of the consideration received and of any investment retained in the former subsidiary and (ii) the previous carrying amount of the assets (including any goodwill) and liabilities of the subsidiary and any non-controlling interests.

ASSOCIATES

Associates are entities over which the Corporation has the power to participate in the financial and operating policy decisions of the entity, but which is not control or joint control. Associates are accounted for using the equity method of accounting.

Under the equity method, the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of comprehensive income of the associate. On acquisition of the investment, any difference between the cost of the investment and the investor’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities is accounted for in accordance with IFRS 3 Business Combinations. The goodwill (net of any accumulated impairment loss) relating to an investment in an associate is included within the carrying amount of that investment.

The Corporation’s share of its associates’ post-acquisition profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions received from an investee reduce the carrying amount of the investment.

If the Corporation’s share of losses of an associate equals or exceeds its interest in the associate, the Corporation does not provide for additional losses, unless it has incurred obligations or made payments on behalf of the associate. Profits / losses on Corporation transactions with associates are eliminated to the extent of the Corporation’s interest in the relevant associate.

NON-CURRENT ASSETS HELD FOR SALE

Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets are re-measured at net book value less impairment loss. Assets held for sale are measured at the lower of their carrying amounts or their fair value less costs to sell and are no longer depreciated. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.

REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

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•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Revenue from product sales is generally recognized when the product is shipped to the customer and when there are no unfulfilled Corporation obligations that affect the customer’s final acceptance of the arrangement. Any cost of warranties and remaining obligations that are inconsequential or perfunctory are accrued when the corresponding revenue is recognized.

Participation arrangements

Software Licensing

Typically, license fees, including fees from master license agreements, most of which are contingent upon licensee’s customer usage, are calculated as a percentage of each licensee’s level of activity. The percentage is as established in the contracts and can vary depending on the contracts. The Corporation only reports its revenues (as opposed to licensee’s total revenues and deducting licensee’s percentage as a cost). The license fees are recognized on an accrual basis as earned.

Hosted Casino

Revenues from Hosted Casino are recognized as the services are performed, on a daily basis, at the time of the gambling transactions.

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

IAS 21 (“Effects of Changes in Foreign Currency Rates”) requires entities to consider primary and secondary indicators when determining the functional currency. Primary indicators are closely linked to the primary economic environment in which the entity operates and are given more weight. Secondary indicators provide supporting evidence to determine an entity’s functional currency. Once the functional currency of an entity is determined, it should be used consistently, unless significant changes in economic facts, events and conditions indicate that the functional currency has changed.

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Based on an analysis of the primary and secondary indicators, the functional currency of each of the group’s entities have been determined. These consolidated financial statements are presented in Canadian dollars, which in the opinion of Management is the most appropriate presentation currency in view of its operations in the global marketplace, user needs and a comparison with its major competitors.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of comprehensive income (loss).

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

income and expenses for each statement of comprehensive income (loss) are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

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The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling
MXN		Mexican Peso
SEK		Swedish Krona

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

The consideration transferred by the Corporation to acquire control of a subsidiary is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred and equity interests issued by the Corporation, including the fair value of all the assets and liabilities resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred.

OPERATING SEGMENTS

The Corporation’s operating segment is organized around the markets it serves and is reported in a manner consistent with the internal reporting provided to the Chairman and Chief Executive Officer, the Corporation’s chief operating decision-maker. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Corporation. Currently the Corporation has only one operating segment, Diversified Gaming Solutions.

Segmental information is reported in a manner consistent with the internal reporting to the chief operating decision-makers. On the basis that the Group’s activities are operated largely through a common infrastructure and support function the business segment information is not reported below the revenue level. Similarly no measure of segment assets is given due to the highly integrated nature of the Group’s operations.

FINANCIAL INSTRUMENTS

Financial assets

Financial assets are initially recognized at fair value and are classified either as “fair value through profit and loss”; “available-for-sale”; “held-to-maturity”; or “loans and receivables”. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. Except in very limited circumstances, the classification is not changed subsequent to initial recognition.

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). No financial assets are classified as fair value through profit or loss.

Available-for-sale

Available-for-sale assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in other non-current financial assets unless Management intends to dispose of the investment within twelve months of the consolidated statements of financial position date. Financial assets classified as available-for-sale are carried at fair value with the changes in fair value recorded in other comprehensive income (loss), except for investments in equity instruments that do not have a quoted market price in an active market which are measured at cost. Interest on available-for-sale assets is calculated using the effective interest rate method and is recognized in the net loss. When a decline in fair value is determined to be other-than-temporary, the cumulative loss included in accumulated other comprehensive income (loss) is removed and recognized in the consolidated statement of comprehensive income (loss). Gains and losses realized on disposal of available-for-sale securities are recognized in the statement of comprehensive income (loss).

Held-to-maturity and loans and receivables

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the intention and ability to hold to maturity. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than twelve months after the consolidated statements of financial position date, which are classified as non-current assets. Financial instruments classified as held-to-maturity and loans and receivables are initially recorded at fair value and subsequently measured at amortized cost using the effective interest method. No financial assets are held-to-maturity. Cash and cash equivalents, restricted cash, receivable under finance lease, accounts receivable are classified as loans and receivables.

Impairment

At the end of each reporting period, the Corporation assesses whether a financial asset or a group of financial assets, other than those classified as fair value through profit and loss, is impaired. If there is objective evidence that impairment exists, the loss is recognized in the consolidated statements of comprehensive income (loss). The impairment loss is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the consolidated statement of comprehensive income (loss).

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

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Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

The Corporation’s compound financial instruments comprise of its non-convertible subordinated debentures that entitle the holder to receive a unit composed of one non-convertible debenture and 48 warrants. As a result the instrument is composed of one liability component and one equity component for the warrants. The liability component of the non-convertible debentures is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The Corporation has determined the fair value of the liability component. Then, the proceeds were allocated between the liability and the equity components using the residual method. Any directly attributable transaction costs are allocated to the liability and the warrants in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of the convertible debentures is measured at amortized cost using the effective interest method. The warrants are not re-measured subsequent to initial recognition.

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

For the Corporation’s financial instruments which are recognized in the statement of financial position at fair value, the inputs used in measuring fair values are classified in the following levels in the fair value hierarchy:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

Comprehensive income (loss) is composed of the Corporation’s net earnings (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized effect of foreign currency translation of foreign operations net of income taxes. The components of comprehensive income (loss) are presented in the consolidated statements of changes in equity.

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

Inventories are priced at the lower of cost or net realizable value. Cost is determined on a weighted average basis. The cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventory to its present location and condition. Raw materials and purchased finished goods are valued at purchase cost. Net realizable value represents the estimated selling price for inventory less all estimated costs necessary to make the sale.

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

PROPERTY AND EQUIPMENT

Property and equipment which have a finite life are recorded at cost less accumulated depreciation and impairment losses. Depreciation is expensed from the month the corresponding assets are available for use over the estimated useful lives at the following rates, which are intended to reduce the carrying value to the estimated residual value:


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%

INTANGIBLE ASSETS


Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease

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ACQUISITION-RELATED INTANGIBLES


Software Technology	Straight-line	5 years
Customer Relationships	Straight-line	15 years

Upon retirement or disposal, the cost of the asset disposed of and the related accumulated amortization are removed from the accounts and any gain or loss is reflected in earnings. Expenditures for repairs and maintenance are expensed as incurred.

GOODWILL

Goodwill is reviewed for impairment at least annually or more frequently if circumstances such as significant declines in expected sales, earnings or cash flows indicate that it is more likely than not that the asset might be impaired.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

Assets that cannot be tested individually for the impairment test are grouped into the smallest group of assets that generates cash inflows through continued use that are largely independent of the cash inflows from other assets or groups of assets (“cash-generating unit” or “CGU”). For the impairment test of goodwill, goodwill has been allocated to one group of CGUs, so that the level at which the impairment is tested represents the lowest level at which Management monitors goodwill for internal Management purposes, in accordance with operating segment. Goodwill acquired in a business combination is allocated to the group of CGUs that is expected to benefit from synergies of the related business combination.

The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

Impairment losses recognized for a CGU (or group of CGU) first reduce the carrying amount of any goodwill allocated to that CGU and then reduce the carrying amounts of the other assets of the CGU (or group of CGU) pro rata on the basis of the carrying amount of each asset in the CGU (or group of CGU).

TAXATION

Income tax expense represents the sum of current and deferred taxes. Current and deferred taxes are recognized in the consolidated statement of comprehensive income (loss), except to the extent it relates to items recognized in other comprehensive income (loss) or directly in equity.

Current tax

The tax currently payable is based on taxable income for the year. Taxable income differs from earnings as reported in the consolidated statements of comprehensive income (loss) because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Corporation’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable income will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting earnings.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Corporation is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Corporation expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

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STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity-settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Basic earnings per common share are computed by dividing the earnings for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the treasury stock method by dividing the earnings for the period applicable to common shares by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued.

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

LEASES

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the arrangement conveys a right to use the asset. When substantially all risks and rewards of ownership are transferred from the lessor to the lessee, lease transactions are accounted for as finance leases. All other leases are accounted for as operating leases.

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provisions represent liabilities to the Corporation for which the amount or timing is uncertain. Provisions are recognized when the Corporation has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at the present value of the expected expenditures required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in provisions due to the passage of time is recognized in “interest” on the consolidated statement of comprehensive income (loss). Provisions are not recognized for future operating losses.

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 19). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($6.09 million CAD), of which (i) €0.67 million ($1.02 million CAD) is recorded in Provisions (see note 19); (ii) €0.66 million ($1.01 million CAD) is recorded in accounts payable and accrued liabilities; and (iii) €2.67 million ($4.06 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10.00 million ($11.05 million CAD), of which (i) USD$7.65 million ($8.46 million CAD) is recorded in Provisions (see note 19); (ii) (ii) USD $2.35 million ($2.59 million CAD) is recorded in accounts payable and accrued liabilities.

ROYALTIES

The Corporation licenses various royalty rights from several owners of intellectual property rights. These rights are used to produce games for use in Hosted Casino and Branded Games. Generally, the arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight- line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense.

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

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CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires Management to make estimates and assumptions that can have a significant effect on the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at March 31, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post- tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at March 31, 2014, was 12.00%. As at March 31, 2014, there was no need for impairment.

Impairment of other long-lived assets

The determination of other long-lived asset impairment requires significant estimates and assumptions to determine the recoverable amount of an asset and/or CGU, wherein the recoverable amount is the higher of fair value less costs to sell and value in use. The value in use method involves estimating the net present value of future cash flows derived from the use of the asset and/or CGU, discounted at an appropriate rate.

The key assumptions utilized in the determination of future cash flows represent Management’s best estimate of the range of economic conditions relating to the CGU, and are based on historical experience, economic trends, and communications with other key stakeholders of the Corporation. These key assumptions include the revenue growth rate, EBITDA¹ margin as a percentage of revenues, capital expenditures as a percentage of revenues, and the inflation growth rate. Significant changes in the key assumptions utilized in the determination of future cash flows could result in an impairment charge or reversal of an impairment loss. As at March 31, 2014 and March 31, 2013, there was no need for an impairment charge.

Stock-based compensation and warrants

The Corporation estimates the expense related to stock-based compensation and the value of warrants using the Black-Scholes valuation model. The model takes into account Management’s best estimate of the exercise price of the stock option/warrant, an estimate of the expected life of the option/warrant, the current price of the underlying stock, an estimate of the stock’s/warrant’s volatility, an estimate of future dividends on the underlying stock/warrant, the risk-free rate of return expected for an instrument with a term equal to the expected life of the option/warrant, and the expected forfeiture rate of stock options granted (see note 24).

Inventory write-down

Periodical reviews of the inventory are performed for excess inventory, obsolescence and declines in net realizable value below cost and allowances are recorded against the inventory balance for any such declines. The Corporation writes down the value of ending inventory for obsolete and unmarketable inventory equal to the difference between the cost of inventory and the net realizable value. These reviews require Management to estimate future demand for products and evaluate market conditions. Possible changes in these estimates could result in a write-down of inventory. If actual market conditions are less favourable than those projected, additional inventory write-downs may be required.

Research and development investment tax credits

Management has made a number of estimates and assumptions in determining the expenditures eligible for the research and development investment tax credit claim. Tax credits are available based on eligible research and development expenses consisting of direct expenditures and including a reasonable allocation of overhead expenses. It is possible that the allowed amount of the research and development investment tax credit claim could be materially different from the recorded amount upon assessment by the Canada Revenue Agency, the Minister of Revenue of Quebec and Alberta Finance.

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

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The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period. As at March 31, 2014 a valuation allowance of $4,829,460 (2013 – $4,067,955) was recorded.

Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Corporation’s interpretations of income tax legislation, will result in adjustments to the expectations of future timing difference reversals, and may require material deferred tax adjustments. To the extent that forecasts differ from actual results, adjustments are recognized in subsequent periods.

Contingent consideration

Provision for minimum revenue guarantee

JUDGMENTS

Finance leases

Judgement is required in the initial classification of leases as either operating leases or finance leases and, in respect of finance leases, determining the appropriate discount rate implicit in the lease to discount minimum lease payments. The useful life of the leased property is determined by Management at the inception of the lease. The useful life is based on historical experience with similar products as well as anticipation of future events, which may impact their useful economic life, such as changes in technology. The estimated fair values established at lease inception is periodically reviewed to determine if values are realizable, which depends on the credit risk of the lessee, market conditions and other subjective and qualitative factors.

Deferred Development Costs

Amounts capitalized include the total cost of any external products or services and labour costs directly attributable to development. Management’s judgement is involved in determining the appropriate internal costs to capital i.e. The useful life represents Management’s view of the expected period over which the Corporation will receive benefits from the software based on historical experience with similar products as well as anticipation of future events, which may impact their useful economic life, such as changes in technology.

Estimated useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

4. Change In Accounting Policies

Interests in Other Entities

The Corporation have adopted the following five standards applying to interests in other entities as at January 1, 2013:

IFRS 10, Consolidated Financial Statements;

IFRS 11, Joint Arrangements;

IFRS 12, Disclosure of Interests in Other Entities;

IAS 27, Separate Financial Statements (as amended in 2011); and

IAS 28, Investments in Associates and Joint Ventures (as amended in 2011).

IFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess.

IFRS 11 is intended to provide for a more realistic reflection of joint arrangements by focusing on the contractual rights and obligations of the arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting of joint arrangements by establishing principles that are applicable to the accounting for all joint arrangements.

IFRS 12 is a new standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles, and other off-balance-sheet vehicles.

The IASB also issued Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12). The amendments clarify the transition guidance in IFRS 10, Consolidated Financial Statements and also provide additional transition relief in IFRS 10, IFRS 11, Joint Arrangements and IFRS 12, Disclosure of Interests in Other Entities.

IAS 27, as amended in 2011, contains accounting and disclosure requirements for investments in subsidiaries, joint ventures, and associates when an entity prepares separate financial statements. The standard requires an entity preparing separate financial statements to account for those investments at cost or in accordance with IFRS 9, Financial Instruments.

IAS 28, as amended in 2011, prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.

The adoption of these new IFRS pronouncements had no material impact on the measurement of the consolidated financial statements. However, application of IFRS 12 has resulted in more extensive disclosures in the consolidated financial statements.

IFRS 13, Fair Value Measurement

The Corporation adopted IFRS 13, Fair Value Measurement (“IFRS 13”) with prospective application from January 1, 2013. IFRS 13 defines fair value, sets out a single IFRS framework for measuring fair value and outlines disclosure requirements for fair value measurements.

IFRS 13 defined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity- specific measurement, so assumptions that market participants would use should be applied in measuring fair value.

LOGO

The adoption of IFRS 13 did not have an effect on our Consolidated financial statements for the current period. The disclosure requirements of IFRS 13 are incorporated in the consolidated financial statements. This includes disclosures about fair values of financial assets and liabilities measured on a recurring basis and non-financial financial assets and liabilities measured on a non-recurring basis. Disclosures about assumptions used in calculating the fair value of assets classified as held for sale are included in the consolidated financial statements (note 11).

IAS 1, Presentation of Financial Statements

The Corporation adopted the amendments to IAS 1, Presentation of Financial Statements (“IAS 1”) on January 1, 2013, with retrospective application. The amendments to IAS 1 require companies preparing financial statements under IFRS to group items within other comprehensive income that may be reclassified to profit and loss and those that will not be reclassified. Since there are is only one other comprehensive income item within our statement of comprehensive income (loss), there is no net impact on the presentation of our statement of comprehensive income (loss).

5. Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures–Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

The IASB issued the chapters of IFRS 9 relating to the classification and measurement of financial assets. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the many different rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets.

The IASB also issued additions to IFRS 9 to address the problem of volatility in profit or loss arising from an issuer choosing to measure its own debt at fair value (i.e., the “own credit” problem). With the new requirements, an entity choosing to measure a liability at fair value will present the portion of the change in its fair value due to change in the entity’s own credit risk in the other comprehensive income section of the income statement (no longer recognized in profit or loss). Entities are allowed to apply this change before applying any of the other requirements in IFRS 9.

The IASB also published a new hedge accounting model, together with corresponding disclosures about risk management activity for those applying hedge accounting. The new model represents a substantial overhaul of hedge accounting that will enable entities to better reflect their risk management activities in their financial statements. The most significant improvements apply to those that hedge non-financial risk. As a result of these changes, users of the financial statements will be provided with better information about risk management and about the effect of hedge accounting on the financial statements.

Because the impairment phase of the IFRS 9 project has not yet been completed, the IASB decided to temporarily remove the mandatory effective date of IFRS 9 while continuing to make it available for earlier application. The hedge accounting chapter of IFRS 9 will not however be available for earlier application by those entities reporting under Canadian GAAP until the necessary due process, translation and publication processes have been completed by the AcSB.

6. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include the following:


	March 31, 2014 $		December 31, 2013 $
Cash in bank		119,271,238		93,640,348

		119,271,238		93,640,348

As at March 31, 2014, an amount of $5,107,991 is reserved to settle customer deposits.

7. Investment tax credits receivable


	March 31, 2014 $		December 31, 2013 $
Research and development investment tax credits
2009		1,362,643		1,362,643
2010		128,409		128,409
2011		217,129		217,129
2012		410,976		159,877
2013		604,386		916,121
2014		97,499		—

		2,821,042		2,784,179

Investment tax credit receivable		119,600		111,612

Investment tax credit receivable long-term		2,701,442		2,672,567

8. Accounts receivable

The Corporation’s accounts receivable include the following:


	March 31, 2014				December 31, 2013
	Amount		CAD equivalent		Amount		CAD equivalent
CAD		829,557		829,557		350,189		350,189
USD		32,806,448		36,564,221		32,969,218		35,122,599
EUR		3,230,802		4,912,972		4,214,276		6,184,195
GBP		729,294		1,341,674		603,607		1,061,598
MXN		47,906,055		4,056,726		49,156,015		3,895,249
SEK		5,072,155		862,862		3,718,979		626,784
OTHER				281,138				219,587

				48,849,150				47,460,201

LOGO

9. Inventories


	March 31, 2014 $		December 31, 2013 $
Raw materials		7,772,077		6,416,215
Finished goods		2,158,947		1,178,703

		9,931,024		7,594,918

The cost of inventory recognized as an expense during the three month period ended March 31, 2014 was approximately $1,972,000 (2013 – $119,000). The amount of inventory write-downs recognized as an expense in the cost of products for the same period was $nil (2013 – $nil). In 2014 and 2013 there were no reversals of write-downs from the previous years.

10. Receivable under finance lease

The Corporation’s receivable under finance lease includes the following:


	March 31, 2014 $			December 31, 2013 $
Total minimum lease payments receivable		19,121,007			18,604,586
Unearned finance income		(3,873,251	)		(3,735,248	)

		15,247,756			14,869,338
Current maturity of receivable under finance lease		4,905,785			4,865,300

		10,341,971			10,004,038

Finance income recognized in revenue for the three month period ended March 31, 2014 amounted to $167,152 (2013 – $146,226).

The present value of minimum lease payments receivable, unearned finance income and future minimum lease payments receivable under the finance leases are as follows:


	Present Value of Minimum Lease Payments Receivable $		Unearned Finance Income $		Future Minimum Lease Payments Receivable $
2015		5,313,535		980,940		6,294,475
2016		4,769,438		1,224,523		5,993,961
2017		3,779,821		1,089,382		4,869,203
2018		1,384,962		578,406		1,963,368

		15,247,756		3,873,251		19,121,007

11. Assets and liabilities classified as held for sale

The following is a summary of assets and liabilities classified as held for sale at March 31, 2014, in connection with certain proprietary trademarks and other intellectual property.


	Total
Goodwill and intangible assets		29,473,501
Deferred development costs		7,166,110

Assets classified as held for sale		36,639,611


	Total
Deferred tax liability		3,351,070

Liabilities classified as held for sale		3,351,070

12. Restricted cash

An amount of $134,823 (2013 –$130,904) is being held by the Courts of Malta pending the outcome of two separate lawsuits filed by one former client (see note 32).

13. Investments

(a) Investments in quoted instruments

During the year ended December 31, 2013 the Corporation acquired 1.35 million common shares of The Intertain Group Limited (TSX: IT) for a total cost of $5.4 million and 3,850 convertible debentures ( TSX: IT.DB) which have a maturity date of December 31, 2018 and bear interest at 5.00% per annum for a total cost of $3.85 million.

During the three month period ended March 31, 2014, the Corporation acquired 550,000 additional common shares of The Intertain Group Limited for a total cost of $2.2 million. An unrealized gain was recorded on the appreciation of the common share value of the investment ($4.36 CAD on March 31, 2014)


	March 31, 2014 $
At December 31, 2013		9,250,000
Purchase of common stock		2,200,000
Unrealized gain on investment		684,000

Balance at March 31, 2014		12,134,000

(b) Investments in Associates


	March 31, 2014 $
At December 31, 2013		1,332,448
Share of profit (loss)		(98,922	)
Contribution during the period		109,681

Balance at March 31, 2014		1,343,207

On December 27, 2013, the Corporation acquired a 49% interest in Les Studios Side City Inc., a Canadian Corporation operating in Montreal, Quebec as a game development studio. The equity method of accounting is used in measuring this investment. The summarised financial information of the investment as at March 31, 2014 is detailed below and is based on the associate’s financial statements prepared in accordance with IFRS.


Les Studios Side City Inc.
Current Assets	646,460
Non-Current Assets	191,356
Current Liabilities	168,812
Non-Current Liabilities	297,734
Net Assets of Associate	371,270
Ownership Interest in Associate	49	%
Revenue	165,811
Profit	(201,881	)
Total Comprehensive Income for the year	(201,881	)

LOGO

The composition of the Corporation at the end of the reporting period was as follows.


Region of incorporation and operation	Number of wholly-owned subsidiaries
	2014		2013
North America		16		14
Europe		29		32
Latin America & Caribbean		6		5
Other		4		4

		55		55

14. Goodwill and intangible assets

COST


	Software $			Licenses $			Placement fee $			Acquisition- Related Intangibles $			Goodwill $			Total $
Balance – January 1, 2013		3,038,777			6,520,715			—			84,179,530			93,964,475			187,703,497
Additions		7,663,347			5,535,738			5,536,742			—			—			18,735,827
Disposals		(59,934	)		(73,759	)		—			—			—			(133,693	)
Reclassifications		16,018			9,417			—			—			—			25,435
Reclassification to held for sale		(799,815	)		(209,398	)		—			(10,826,452	)		(21,246,316	)		(33,081,981	)
Translation		404,476			262,944			181,166			6,226,433			7,256,694			14,331,713

Balance – December 31, 2013		10,262,869			12,045,657			5,717,908			79,579,511			79,974,853			187,580,798

Additions		950,369			1,526,146			—			—			—			2,476,515
Additions through business combination		—			—			—			12,787,911			15,247,955			28,035,866
Disposals		(70,879	)		(35,040	)		(39,730	)		—			—			(145,649	)
Reclassification to held for sale		(93,092	)		—			—			—			—			(93,092	)
Translation		188,060			196,011			225,183			2,971,953			3,120,073			6,701,280

Balance – March 31, 2014		11,237,327			13,732,774			5,903,361			95,339,375			98,342,881			224,555,718

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Software $			Licenses $			Placement fee $			Acquisition- Related Intangibles $			Goodwill $		Total $
Balance – January 1, 2013		495,433			2,184,014			—			4,291,335			—		6,970,782
Amortization		1,713,160			2,043,986			646,262			14,957,376			—		19,360,784
Disposals		—			(8,674	)		—			—			—		(8,674	)
Reclassifications		201,925			(25,134	)		—			—			—		176,791
Reclassification to held for sale		(380,794	)		(78,279	)		—			(2,205,441	)		—		(2,664,514	)
Translation		179,157			45,362			21,147			462,890			—		708,556

Balance – December 31, 2013		2,208,881			4,161,275			667,409			17,506,160			—		24,543,725

Amortization		715,514			585,799			299,627			3,801,778			—		5,402,718
Disposals		(70,879	)		(1,900	)		(9,932	)		—			—		(82,711	)
Reclassification to held for sale		(149,684	)		—			—			—			—		(149,684	)
Translation		52,631			40,962			26,791			819,627			—		940,011

Balance – March 31, 2014		2,756,463			4,786,136			983,895			22,127,565			—		30,654,059

CARRYING AMOUNT

Software
$

Licenses
$

Placement
fee
$

Acquisition-
Related
Intangibles
$

Goodwill
$

Total
$

At December 31, 2013

8,053,988

7,884,382

5,050,499

62,073,351

79,974,853

163,037,073

At March 31, 2014

8,480,864

8,946,638

4,919,466

73,211,810

98,342,881

193,901,659

LOGO

15. Property plant and equipment

COST


	Revenue- Producing Assets $			Machinery and Equipment $			Furniture and Fixtures $			Computer Equipment $			Total $
Balance – January 1, 2013		29,376,126			3,332,319			3,194,662			6,782,952			42,686,059
Additions		14,202,995			50,842			706,949			2,469,645			17,430,431
Transfers to inventory		(2,104,057	)		—			—			—			(2,104,057	)
Disposals		(1,177,399	)		(17,096	)		(139,887	)		(234,622	)		(1,569,004	)
Reclassifications		2,459,037			(2,378,361	)		—			—			80,676
Translation		1,630,909			85,686			262,740			300,222			2,279,557

Balance – December 31, 2013		44,387,611			1,073,390			4,024,464			9,318,197			58,803,662

Additions		1,945,452			—			711			519,293			2,465,456
Additions through business combination		5,425,571			105,276			68,219			884,996			6,484,062
Disposals		(3,057,999	)		—			(268,005	)		(523,296	)		(3,849,300	)
Reclassifications		(3,441	)		—			—			3,441			—
Translation		1,661,647			4,077			127,858			(118,919	)		1,674,663

Balance – March 31, 2014		50,358,841			1,182,743			3,953,247			10,083,712			65,578,543

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Revenue- Producing Assets $			Machinery and Equipment $			Furniture and Fixtures $			Computer Equipment $			Total $
Balance – January 1, 2013		3,605,594			488,004			700,394			1,217,717			6,011,709
Depreciation		9,793,903			137,332			947,675			1,854,941			12,733,851
Transfers to inventory		(662,624	)		—			—			—			(662,624	)
Disposals		(280,893	)		(2,828	)		(83,419	)		—			(367,140	)
Reclassifications		199,181			(118,505	)		—			—			80,676
Impairment		361,320			—			—			—			361,320
Translation		51,380			4,884			84,426			(15,813	)		124,877

Balance – December 31, 2013		13,067,861			508,887			1,649,076			3,056,845			18,282,669

Depreciation		2,965,282			33,022			150,169			517,870			3,666,343
Disposals		(1,403,190	)		—			(268,005	)		(306,238	)		(1,977,433	)
Translation		545,319			1,039			49,529			(206,510	)		389,377

Balance – March 31, 2014		15,175,272			542,948			1,580,769			3,061,967			20,360,956

CARRYING AMOUNT

Revenue-
Producing
Assets
$

Machinery
and
Equipment
$

Furniture
and
Fixtures
$

Computer
Equipment
$

Total
$

At December 31, 2013

31,319,750

564,503

2,375,388

6,261,352

40,520,993

At March 31, 2014

35,183,569

639,795

2,372,478

7,021,745

45,217,587

As at March 31, 2014, the Corporation did not record any impairment of idle gaming equipment (2013 - $nil).

16. Income taxes

Income taxes reported differ from the amount computed by applying the statutory rates to incomes (loss) before income taxes. The reasons are as follows:


	March 31, 2014 $			March 31, 2013 $
Statutory income taxes		11,182,000			(439,000	)
Non-taxable income		(959,000	)		(549,000	)
Non-deductible expenses		6,076,000			888,000
Differences in effective income tax rates in foreign jurisdictions		5,143,000			—
Non-capital losses utilized for which a deferred tax has been recorded		—			722,000
Non-capital losses for which no tax benefit has been recorded		2,457,000			518,000
Non-capital losses for which a tax benefit has been recorded		(21,975,000	)		(387,000	)

Current and deferred income taxes		1,924,000			753,000

Significant components of the Corporation’s deferred income tax balance at March 31, 2014 were as follows:


	Deferred development costs $			Property & Equipment $			Share & Debt issuance costs $			Finance Lease $			Intangibles $			Tax Losses $			Investment tax credits $			Foreign tax credits $			Other $			Total $
At January 1, 2013		351,000			4,442,000			1,247,000			(4,024,000	)		(19,956,000	)		14,102,000			(1,000	)		10,772,000			352,000			7,285,000
Charged / (credited) to the income statement		(1,407,000	)		(1,827,000	)		(708,000	)		247,000			3,803,000			(2,437,000	)		—			2,882,000			—			553,000

Charged / (credited) directly to balance sheet		—			—			—			(2,322,000	)		—			(2,792,000	)		—			—			986,000			(4,128,000	)

Charged / (credited) to other comprehensive income		(77,000	)		55,000			2,000			49,000			(1,528,000	)		363,000			—			850,000			91,000			(195,000	)

Charged / (credited) directly to equity		—			—			710,000			—			—			160,000			—			—			—			870,000

Reclassification to asset held for sale		1,522,000			—			—			—			1,621,000			—			—			—			—			3,143,000

Reclassification		—			(1,327,000	)		16,000			3,850,000			(2,172,000	)		(1,258,000	)		1,000			(145,000	)		1,035,000			—

At December 31, 2013		389,000			1,343,000			1,267,000			(2,200,000	)		(18,232,000	)		8,138,000			—			14,359,000			2,464,000			7,528,000

Charged / (credited) to the income statement		(68,000	)		369,000			80,000			184,000			981,000			158,000			—			475,000			—			2,179,000
Charged / (credited) directly to balance sheet		—			—			—			(761,000	)		—			(1,162,000	)		—			—			(456,000	)		(2,379,000	)
Charged / (credited) to other comprehensive income		18,000			(54,000	)		2,000			61,000			(781,000	)		129,000			—			566,000			96,000			37,000

Charged / (credited) directly to equity		—			—			(111,000	)		—			—			—			—			—			—			(111,000	)
Reclassification to asset held for sale		2,000			—			—			—			—			—			—			—			—			2,000
Acquisition of subsidiary		—			(215,000	)		—			—			(3,202,000	)		164,000			—			—			—			(3,253,000	)

At March 31, 2014		341,000			1,443,000			1,238,000			(2,716,000	)		(21,234,000	)		7,427,000			—			15,400,000			2,104,000			4,003,000

LOGO

As at March 31, 2014, the Corporation had Federal and Provincial non-capital losses of approximately $20,192,000 and $19,653,000 respectively (December 31, 2013 – $25,879,000; $19,549,000) that may be applied against earnings of future years, not later than 2032. The Corporation’s foreign subsidiaries have non-capital losses of approximately $52,341,000 (December 31, 2013 - $50,897,000) that may be applied against earnings in future years, no later than 2017. The possible income tax benefit of $28,188,000 (December 31, 2013 – $29,752,000) of the non-capital losses has been recognized in the accounts.

As at March 31, 2014, the Corporation had undeducted research and development expenses of approximately $2,255,000 federally and $3,962,000 provincially (December 31, 2013 – $2,216,000; $3,925,000) with no expiration date. The deferred income tax benefits of these deductions are recognized in the accounts.

17. Credit facility

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. The revolving demand credit facility can be used for general working capital purposes. The facility bears interest at the bank’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances (March 31, 2014 - $nil), the Corporation has provided the Bank a first ranking security interest over all of the movable/personal property of the Corporation.

As at March 31, 2014, the outstanding amount of the revolving demand credit facility is $nil (December 31, 2013- $nil).

Under the terms of the credit facility arrangement with the Bank, the Corporation is required amongst other conditions, to maintain at all times certain ratios and a minimum level of net worth. As at March 31, 2014 and December 31, 2013, the Corporation was not in breach of the terms of the credit facility agreement.

The Corporation has a term loan facility of $12 million provided by Export Development Canada to fund qualified expenditures.

As at March 31, 2014, the outstanding amount of the credit facility is $nil (December 31, 2013- $nil).

18. Accounts payable and accrued liabilities

The Corporation’s accounts payable include the following:


	March 31, 2014				December 31, 2013
	Amount		CAD equivalent		Amount		CAD equivalent
CURRENT
CAD		4,518,941		4,518,941		3,116,069		3,116,069
USD		14,269,800		15,775,110		12,365,338		13,149,841
EURO		2,868,212		4,361,481		1,734,562		2,545,596
GBP		765,622		1,408,656		744,064		1,309,633
SEK		40,118,585		6,824,426		32,662,449		5,504,814
MXN		17,026,355		1,441,806		22,442,972		1,824,349
OTHER				16,324				26,729

TOTAL CURRENT				34,346,744				27,477,031

LONG-TERM
USD		539,222		596,110		—		—

TOTAL				34,942,854				27,477,031

19. Provisions

The provision in the statement of financial position is for the provision for jackpots, the estimate of contingent consideration in connection with the acquisition of Ongame and the minimum revenue guarantee in connection with the sale of WagerLogic Ltd (see note 37). The carrying amounts and the movements in the provision are as follows:


	March 31, 2014			December 31, 2013
	March 31, 2014			December 31, 2013
Opening balance		5,231,552			12,799,977
Additional provision for jackpots		965,977			2,269,513
Revenue guarantee		8,458,770			—
Contingent consideration in connection with Ongame acquisition		—			(4,874,791	)
Jackpot provision amounts utilised		(41,523	)		(6,095,732	)
Jackpots decommissioned		(158,712	)		—
Reclassification		(261,371	)		—
Translation		177,964			1,132,585

Ending balance		14,372,657			5,231,552
Short-term portion		(13,089,579	)		(3,684,900	)

Long-term portion		1,283,078			1,546,652

20. Long-term debt

The following is a summary of long-term debt outstanding at March 31, 2014 and December 31, 2013:


	March 31, 2014 $		December 31, 2013 $


Current maturity		2,185,463		2,387,557
Long-term debt		199,358,181		192,798,839

		201,543,644		195,186,396

(a) Subordinated Debt

On April 29, 2010 the Corporation entered into a subordinated debt agreement in the amount of $3 million which is disbursable in two tranches of $1.5 million each, closing no later than April 30, 2010 and 12 months after the first drawing respectively, pursuant to the conditions of the related loan agreement. On April 30, 2010, the first tranche amounting to $1.5 million was disbursed. The Corporation did not draw on the second $1.5 million tranche and has waived its rights to draw on the second tranche. The subordinated debt is repayable in equal monthly instalments over a five-year period. The loan bears interest at the annual rate of 14% plus an additional interest representing 1% of yearly gross sales of the Corporation for the first $25 million of sales and an additional 0.20% for sales over $25 million. In the event that only the first drawing is disbursed by the lender, the calculation of the additional interest shall be adjusted to 0.5% of the first $25 million of the Corporation’s gross sales for a given year, and to 0.1% of the Corporation’s gross sales exceeding $25 million for a given year. Any amount, principal or interest, which is not paid when due will bear interest at the annual rate of 25% until it is paid in full.

Under the terms of the subordinated debt agreement with the lender, the Corporation is required, amongst other conditions, to maintain at all times certain ratios. As at March 31, 2014, the Corporation was not in breach of the terms of the subordinated debt agreement.

LOGO

The subordinated debt is convertible into voting and participating shares of the Corporation upon an event of default by the Corporation under the terms of the related loan agreement, at the discretion of the lender. In the event the lender exercises the conversion privilege as a result of an event of default, the conversion is based on the greater of (i) the book value of the common shares of the Corporation on the basis of the most recent audited consolidated financial statements or, at the lender’s sole discretion, the most recent unaudited consolidated quarterly financial statements of the Corporation, provided that such book value shall not be less than one cent per share, and (ii) the minimum price authorized by the applicable policies of the TSX if the Corporation is listed on such Exchange. The fair value of the long-term debt was established using information for comparative debt instruments and the Corporation concluded that there was no significant equity component.

During the three month period ended March 31, 2014, the Corporation incurred $7,767 (2013 – $23,301) in interest.


	March 31, 2014 $			December 31, 2013 $


Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		200,000			275,000
Current maturity		(200,000	)		(275,000	)

		—			—

(b) Non-convertible subordinated debentures

On February 7, 2013, the Corporation closed a private placement debt, selling 30,000 units at a price of $1,000 per unit for aggregate gross proceeds of $30 million. Each unit consisted of (i) $1,000 principal amount of unsecured non-convertible subordinated debentures; and (ii) 48 non-transferable common share purchase warrants (the warrant indenture was subsequently amended to provide for the warrants to be transferable and traded on the TSX). The debentures bear interest at a rate of 7.50% per annum payable semi-annually in arrears on January 31 and July 31 in each year commencing July 31, 2013. Each warrant entitles the holders thereof to acquire one common share of the Corporation at a price per common share equal to $6.25 at any time up to a period ending January 31, 2016.

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.

During the three month period ended March 31, 2014, the Corporation incurred $886,679 (2013 – nil) in interest.


	March 31, 2014 $


Fair Value of Liability component		26,844,352
Fair Value of Equity component		3,155,648
Face Value		30,000,000

Transaction costs		1,831,234

The following table reflects movements recognized during the three month period ended March 31, 2014.

Face
value

Liability
component

Equity
component

Opening balance (net of transaction costs)

30,000,000

25,205,742

2,963,024

Accretion of liability component (effective interest of 13.60%)

—

1,448,697

—

Balance at March 31, 2014

30,000,000

26,654,439

2,963,024

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$
2015		—
2016		30,000,000

Cadillac Jack has entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack will have access to term loans in an aggregate principal amount of up to USD$160 million (the “Credit Facilities”). The Credit Facilities have replaced the existing USD$110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya, as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses and will be used to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. The Credit Facilities bear interest at a rate of LIBOR plus 7.00% with a LIBOR floor of 1.00% per annum payable quarterly commencing March 20, 2014. The Credit Facilities have a term of 4 years from the closing date and are secured by the assets of Cadillac Jack and its subsidiaries. Amaya has provided an unsecured guarantee of the obligations of Cadillac Jack in favour of the lenders. The Credit Facilities have maintenance covenants based on maximum leverage and minimum coverage, for which the Corporation was in compliance with as of March 31, 2014.

During the three month period ended March 31, 2014, the Corporation incurred $3,530,570 (2013 - nil) in interest.


	March 31, 2014 $			December 31, 2013 $


Principal		176,437,800			170,176,000
Transaction costs		(2,086,552	)		(1,947,209	)
Accretion (effective interest rate of 8.35%)		124,673			12,558
Translation		(3,379	)		(63,305	)
Current maturity		(1,768,800	)		(1,701,760	)

		172,703,742			166,476,284

Term loan principal repayments over the next four years amount to the following:


	$
2015		1,768,800
2016		1,768,800
2017		1,768,800
2018		171,131,400

(d) Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

During the three month period ended March 31, 2014, the Corporation incurred $6,312 (2013 – $10,855) in interest.


	March 31, 2014 $			December 31, 2013 $
	March 31, 2014 $			December 31, 2013 $
Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		216,663			410,797
Current maturity		(216,663	)		(410,797	)

		—			—

LOGO

21. Equipment Financing

The Corporation enters into agreements to purchase equipment payable in monthly instalments including interest. The agreements are repayable in equal monthly instalments over a four-year period. The agreements bear interest at annual rates of between 1.11% and 8.54%.

During the three month period ended March 31, 2014, the Corporation incurred $27,185 (2013 – $36,337) in interest.


	March 31, 2014 $			December 31, 2013 $
	March 31, 2014 $			December 31, 2013 $
Agreements bear interest at between 1.11% and 8.54% per annum, all maturing by 2018 and payable in monthly instalments of $134,783 including interest		1,854,563			1,683,139
Current maturity		(1,264,119	)		(1,132,500	)

		590,444			550,639

Principal repayments over the next four years amount to the following:


	$
2015		1,264,119
2016		425,586
2017		106,960
2018		57,898

		1,854,563

22. Commitments

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $21,179,000.


	$
Within one year		11,075,000
Later than one year but not later than 5 years		9,991,000
More than 5 years		113,000

23. Share capital

The authorized share capital of the Corporation consists of an unlimited number of common shares, with no par value, and an unlimited number of preferred shares, with no par value, issuable in series.

During the three month period ended March 31, 2014:

•

the Corporation issued 4,800 common shares for cash consideration of $30,000 as a result of the exercise of warrants. Initially the 4,800 warrants were valued at $9,877 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 120,923 common shares for cash consideration of $344,159 as a result of the exercise of stock options. Initially the 120,923 stock options were valued at $87,391 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to contributed surplus was reallocated to the common shares.

During the year ended December 31, 2013:

•

the Corporation issued 473,730 common shares for cash consideration of $1,910,550 as a result of the exercise of warrants. Initially the 473,730 warrants were valued at $397,317 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 932,696 common shares for cash consideration of $1,800,573 as a result of the exercise of stock options. Initially the 932,696 stock options were valued at $798,480 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 7,572,912 common shares in relation to conversion of convertible debentures at the conversion price of $3.25.

•

the Corporation purchased 660,800 common shares for cancellation for $3,243,999. On the cancellation of common shares, $1,880,355 was allocated to contributed surplus.

•

the Corporation completed a private placement offering of 6,400,000 common shares at a price of $6.25 per common share for aggregate gross proceeds of $40,000,000 (see note 2).

24. Contributed surplus

STOCK OPTIONS

The aggregate number of common shares of the Corporation reserved for issuance on the exercise of all stock options granted under the Plan at any time cannot exceed 10% of the issued and outstanding common shares of the Corporation at any such time. The exercise price of the share options shall not be less than the discounted market price of the common shares of the Corporation on the TSX. The options have a maximum term of five years. Options issued in 2012 and 2013 vest in equal increments over four years. Options issued in prior years vested in equal increments over two years.

The following table provides information about outstanding stock options at March 31, 2014:


	For the three month period ended March 31, 2014					For the year ended December 31, 2013
	Number of options			Weighted average exercise price $		Number of options			Weighted average exercise price $
Beginning balance		5,124,379			3.75		5,447,800			3.00
Transactions during the period:
Issued		742,500			8.04		997,500			6.39
Exercised		(120,923	)		2.85		(932,696	)		1.93
Expired / forfeited		(117,814	)		5.12		(388,225	)		4.32

Ending balance		5,628,142			4.31		5,124,379			3.75

During the three month period ended March 31, 2014, the Corporation granted 742,500 stock options to employees to purchase common shares.

The stock options are exercisable at prices ranging from $1.00 to $8.43 per share and have a weighted average contractual term of 3.25 years.

LOGO


	Outstanding options				Exercisable options
Exercise prices $	Number of options		Weighted average outstanding maturity period (years)		Number of options		Exercise price $
1.00		1,081,600		1.30		1,081,600		1.00
1.30		50,000		1.45		50,000		1.30
2.16		20,750		2.49		20,750		2.16
2.50		75,000		1.80		75,000		2.50
2.60		65,000		1.75		65,000		2.60
2.63		10,000		1.90		10,000		2.63
2.71		65,000		2.26		65,000		2.71
2.85		182,500		2.28		182,500		2.85
3.38		65,000		2.16		65,000		3.38
4.20		1,085,375		3.28		271,344		4.20
4.24		1,192,917		3.67		298,229		4.24
4.35		90,000		3.68		22,500		4.35
4.90		17,500		3.78		4,375		4.90
6.00		12,500		4.16		—		6.00
6.05		613,500		4.29		—		6.05
6.33		30,000		4.45		—		6.33
7.55		229,000		4.72		—		7.55
7.95		600,000		4.76		—		7.95
8.43		142,500		4.91		—		8.43

		5,628,142		3.25		2,211,298		2.27

The weighted-average share price of options exercised during the three month period ended March 31, 2014 was $2.85 (2013 – $1.06).

The Corporation recorded a compensation expense of $753,563 for the three month period ended March 31, 2014 (2013 – $431,622). The Corporation has $4,627,806 of stock option expense to be recorded in future periods.

As part of the Corporation’s Management option plan, the expected life of the options had to be determined. The expected life is estimated using the average of the vesting period and the contractual life of the options. The volatility is estimated based on stock prices of comparable companies, as adjusted to take into account the Corporation’s public trading history. Forfeiture rate is estimated based on a combination of historical forfeiture rates and expected turnover rates.

The stock options issued during the period ended March 31, 2014 were accounted for at their fair value of $2,251,762, as determined by the Black-Scholes valuation model using the following weighted-average assumptions:


	2014			2013
Expected volatility		60	%		60	%
Expected life		3.75 years			3.75 years
Expected forfeiture rate		17	%		17	%
Risk-free interest rate		1.07	%		1.07	%
Dividend yield		Nil			Nil
Weighted average share price	$	8.04		$	6.38
Weighted average fair value of options at grant date	$	3.03		$	1.93

WARRANTS

A summary of the activity in the Corporation’s issued warrants during the year is presented below:

The following table provides information about outstanding warrants at March 31, 2014:


	For the three month period ended March 31, 2014					For the year ended December 31, 2013
	Number of warrants			Weighted average exercise price $		Number of warrants			Weighted average exercise price $
Beginning balance		2,594,270			4.62		1,628,000			3.01
Transactions during the period:
Issued		—			—		1,440,000			6.25
Exercised		(4,800	)		6.25		(473,730	)		4.03
Expired		—			—		—			—

Ending balance		2,589,470			4.62		2,594,270			4.62


Grant date	Expiry date		Number of warrants		Exercise price
27-Mar-12		30-Apr-15		1,298,750		3.00
07-Feb-13		31-Jan-16		1,290,720		6.25

				2,589,470		4.62

During the three month period ended March 31, 2014, the Corporation received $30,000 for the exercise of 4,800 warrants. On the exercise of 4,800 warrants, the value of $9,877 originally allocated to contributed surplus was reallocated to the share capital.

During the year ended December 31, 2013, 1,440,000 warrants were issued in connection with the non-convertible subordinated debentures issued by the Corporation, representing an allocated fair value of $3,155,648 (see note 20).

25. Major customers

Revenues from two major customer accounted for approximately 21% of revenues for the three month period ended March 31, 2014 (2013 - 11% from one customer). Outstanding accounts receivable from the two major customers at March 31, 2014 was 28% (2013 – 4% from one customer).

LOGO

26. Financial instruments

FOREIGN EXCHANGE RISK

The Corporation is mainly exposed to foreign currency fluctuations on its accounts receivable, receivable under finance lease, cash, restricted cash, customer deposits, income tax receivable, income tax payable, and accounts payable and accrued liabilities. As at March 31, 2014, the Corporation’s significant foreign exchange currency exposure on these financial instruments by currency was as follows:

Analysis by currency in Canadian equivalent


	Cash $		Restricted Cash $		Accounts receivable $		Receivable under finance lease $		Income tax receivable $		Accounts payable and accrued liabilities $			Income tax payable $			Customer deposits $
USD		58,814,000		—		36,564,000		15,248,000		29,000		(15,775,000	)		(81,000	)		(3,950,000	)
EUR		3,495,000		121,000		4,913,000		—		292,000		(4,361,000	)		(22,000	)		(827,000	)
GBP		1,133,000		—		1,342,000		—		—		(1,409,000	)		(29,000	)		(295,000	)
MXN		1,530,000		—		4,057,000		—		3,000		(1,442,000	)		—			—
SEK		2,141,000		—		863,000		—		452,000		(6,824,000	)		—			—

A ten percent increase (decrease) in the strengthening or weakening of the following currencies versus the Canadian dollar at the end of the year would have increased (decreased) net loss for the year, all other variables held constant, by:


Currency	10% Increase (Decrease)
USD		8,895,742
EUR		361,090
GBP		74,296
MXN		414,831
SEK		(336,843	)

The Corporation does not hedge these exposures. This exposure is monitored by the Corporation’s reporting system and is reviewed by Management on a monthly basis.

INTEREST RATE RISK

The Corporation is exposed to fair value interest rate risk with respect to its subordinated debt, other long-term debt and convertible debentures which bear a fixed rate of interest. The Corporation is exposed to cash flow interest rate risk on its bank indebtedness and senior secured term loan, which bears interest at variable rates. A one percentage point increase (decrease) in interest rates would have decreased (increased) pre-tax earnings by approximately $2,069,000 in the period, with all other variables held constant. Management monitors movements in the interest rates by reviewing the Bank of Canada prime rate and LIBOR on a quarterly basis.

CREDIT RISK

Details of the Corporation’s accounts receivable were as follows:


	March 31, 2014 $			December 31, 2013 $
Not past due		33,472,988			31,464,575
Past due 1-30 days		4,545,408			4,528,808
Past due 31-60 days		6,711,566			1,379,834
Past due 61-90 days		628,225			3,957,859
Past due 91-120 days		510,605			436,780
Past due 121-150 days		490,557			310,837
Past due 151-180 days		317,538			2,370,048
Past due more than 181 days		3,865,924			4,505,744
Allowance for doubtful accounts		(1,693,661	)		(1,494,284	)

Outstanding, end of period		48,849,150			47,460,201

The Corporation’s maximum exposure to credit risk is equal to the carrying value of accounts receivable as set out on the statement of financial position.

LIQUIDITY RISK

The Corporation believes that future cash flows generated by operations and availability under its borrowing facility will be adequate to meet its financial obligations.


	On Demand $		Less than 3 months $		3 to 6 Months $		6 to 9 Months $		9 to 12 months $		Greater than 1 year $
Accounts payable and accrued liabilities		34,346,744		—		—		—		—		596,110
Provisions		13,089,579		—		—		—		—		1,283,078
Customer Deposits		5,107,991		—		—		—		—		—
Income tax payable		1,409,989		—		—		—		—		—
Holdback on purchase price												7,738,500
Equipment financing*		—		388,294		366,173		318,926		264,293		618,311
Long-term debt*		—		4,131,629		5,468,104		4,060,092		5,070,505		245,900,895

Total		53,954,303		4,519,923		5,834,277		4,379,018		5,334,798		256,136,894

*	includes capital and interest

27. Fair value

LOGO

The carrying amounts of long-term debts approximate their fair value since the interest rates on these instruments either approximate the current market rates offered to the Corporation or the interest rates in these instruments change with market interest rates. On initial recognition the fair value of long-term debt was established based on current interest rates, market values and pricing of financial instruments with comparable terms.

As of March 31, 2014, the Corporation has no financial instruments measured at fair value.

28. Capital Management

The Corporation’s objective in managing capital is to ensure a sufficient liquidity position to market its products, to finance its sales and marketing activities, research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with property and equipment. The ability to fund these requirements in the future depends on the Corporation’s ability to access additional capital and generate additional cash flow from its operations.

Since inception, the Corporation has financed its liquidity needs, primarily through bank indebtedness, borrowings, hybrid instruments such as special warrants and issuance of capital stock. When possible, the Corporation tries to optimize its liquidity needs by non-dilutive sources, including loans payable and promissory notes.

The Corporation defines capital as its total shareholders’ equity. To date, the Corporation’s policy is to maintain a minimum level of debt, although debt will be considered as part of financing initiatives in the future.

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. As at March 31, 2014, $nil (December 31, 2013 – $nil) has been used to finance the Corporation’s daily operations.

The capital management objectives listed above have not changed since the previous fiscal year.

The Corporation believes that funds from operations, as well as existing and future financial resources should be sufficient to meet the Corporation’s requirements until March 31, 2015.

29. Geographic information

The Corporation operates within one dominant segment, the marketing, production and distribution of Diversified Gaming Solutions. Revenues from external customers, attributed to countries based on location of the customer, are approximately as follows:


	March 31, 2014 $		March 31, 2013 $
Geographic Area
North America		18,168,235		15,728,922
Europe		9,757,986		14,403,118
Latin America & Caribbean		13,276,002		7,921,207

		41,202,223		38,053,247

The distribution of the Corporation’s non-current assets (consisting of goodwill and intangible assets and property and equipment) by geographical location is approximately as follows:


	March 31, 2014 $		December 31, 2013 $
Geographic Area
North America		183,728,315		151,177,935
Europe		36,166,771		36,192,336
Latin America & Caribbean		19,224,160		16,187,795

		239,119,246		203,558,066

The non-current assets classified as held for sale (see note 11) are excluded from the geographical distribution above.

30. Statement of cash-flows

Changes in non-cash operating elements of working capital is as follows:


				For the three month period ended
	March 31, 2014 $			March 31, 2013 $
Investment tax credits receivable		239,592			(251,506	)
Accounts receivable		(266,171	)		6,836,161
Prepaid expenses		(750,169	)		2,775,973
Inventories		440,211			(133,690	)
Income taxes receivable		883			(24,295	)
Income taxes payable		1,716,580			85,999
Equipment financing		93,136			(269,610	)
Accounts payable and accrued liabilities		(148,265	)		(2,744,070	)
Provisions		475,823			748,961
Deferred revenue		24,925			21,693
Customer deposits		457,523			(3,589,506	)

		2,284,068			3,456,110

Supplemental information
Income taxes paid		1,656,834			178,329
Interest paid		4,610,720			3,572,268

31. Related party transactions

Key Management of the Corporation includes, among others, the members of the Board of Directors, as well as the Chairman and Chief Executive Officer, Chief Financial Officer and Executive Vice-President of Corporate Development and General Counsel. Their compensation includes the following:


	March 31, 2014 $		March 31, 2013 $
Salaries, bonuses and short term employee benefits		389,000		299,000
Share based payments		397,000		211,000

		786,000		510,000

LOGO

32. Contingency

As a result of two separate lawsuits filed by one of the Corporation’s former clients in the Courts of Malta, a combined total of $134,823 Canadian Dollar equivalent is currently being held by the Courts (see note 12).

Management is of the opinion that these claims are unfounded and that the possibility of a material liability is unlikely. As a result, no provision has been recorded.

33. Revenues

The Corporation revenues consist of the following major categories:


	For the three month period ended
	March 31, 2014 $		March 31, 2013 $
Finance income		165,477		69,876
Finance leases		1,232,960		145,179
Software licensing		9,636,376		13,524,125
Sales		5,238,200		639,747
Participation arrangements		23,719,784		19,754,997
Hosted casino		1,209,426		3,919,323

		41,202,223		38,053,247

34. Business Combination

DIAMOND GAME

The acquisition of Diamond Game has been accounted for using the acquisition method and the results of operations are included in the consolidated statement of comprehensive income (loss) from the date of acquisition, which is February 14, 2014.

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $
Cash and cash equivalents		39,546
Inventory		1,192,150
Trade and other receivables		1,718,606
Prepaid expenses		317,345
Property, plant and equipment		5,865,276
Trade payables and accrued liabilities		(3,637,693	)
Equipment financing		(104,794	)
Deferred revenue		(1,756,675	)
Deferred income tax liability		(46,709	)
Intercompany liability		(2,111,756	)
Purchase price allocated Intangibles		11,587,239
Goodwill		14,785,073
Deferred income tax liability		(2,896,810	)

Total consideration		24,950,798
Cash consideration		24,950,798

Total consideration		24,950,798

Of the USD$24.95 million consideration paid by Amaya in connection with the acquisition of Diamond Game, there was a holdback of USD $7 million.

If the acquisition had occurred on January 1, 2014, Diamond Game would have contributed USD$4.97 million and USD$0.35 million to consolidated revenues and net income respectively. Since the date of acquisition, Diamond Game has contributed USD$2.54 million and USD$0.29 million to consolidated revenues and net income respectively.

Acquisition-related costs directly related to the Diamond Game acquisition was USD$2,034,189, and was expensed in the consolidated statement of comprehensive income (loss) during the year ended December 31, 2013 and in the period ended March 31, 2014.

LOGO

35. Expenses Classified By Nature


				For the three month period ended
	March 31, 2014 $			March 31, 2013 $
Cost of Products
Inventories, beginning of period		7,594,918			7,530,793
Translation		247,486			168,681
Purchases		1,529,202			170,171
Inventory acquired on business combination		1,317,922			—
Net Transfer from (to) revenue producing assets		1,213,972			—
Inventories, end of period		(9,931,024	)		(7,751,093	)

		1,972,476			118,552

Financial
Interest and bank charges		4,881,708			5,728,668
Foreign exchange		(3,820,683	)		483,391

		1,061,025			6,212,059
General and administrative
Utilities		242,051			131,429
Office		503,028			203,290
Taxes and licenses		353,557			513,866
Insurance		323,812			224,864
Salaries and fringe benefits		15,868,189			13,136,444
Termination of employment agreement		1,077,618			1,447,829
Stock-based compensation		753,563			431,622
Depreciation of property and equipment		3,666,343			3,395,010
Amortization of deferred development costs		710,173			131,482
Amortization of intangible assets		5,103,094			4,125,252
Consulting fees		2,803,845			3,642,635
General donations		5,664			28,589
Maintenance and repairs		1,470,092			974,221
Professional fees		2,064,995			1,892,847
Termination of agency agreement		—			100,834
Communications		1,869,147			2,041,152
Automobile		71,248			69,373
Bad debt		199,377			607,402
Rent		1,452,321			1,300,436
Loss on disposal of assets		218,884			—

		38,757,001			34,398,577
Selling
Royalties		1,517,569			1,329,320
Advertising and promotion		1,355,864			1,300,807
Travel and entertainment		922,096			860,211
Shipping		352,800			210,667

		4,148,329			3,701,005
Acquisition-related costs
Underwriter fees		—			—
Professional fees		3,653,589			309,479

		3,653,589			309,479

36. Net earnings per share

The following table sets forth the computation of basic and diluted loss per common share from continuing operations for the three month period ended March 31, 2014 and 2013.


	For the three month period ended
	March 31, 2014 $		March 31, 2013 $
Numerator
Numerator for basic and diluted (loss) per common share – net loss		39,643,610		(7,440,841	)

Denominator
Denominator for basic (loss) per common share – weighted average number of common shares		94,136,709		84,782,705

Effect of dilutive securities		10,071,303		1,989,603

Stock options		2,549,306		1,692,053
Warrants		7,521,997		703,939
Convertible debentures		—		(406,389	)

Dilutive potential common shares		104,208,012		86,772,308

Denominator for diluted (loss) per common share – adjusted weighted number of shares		94,136,709		84,782,705
Basic earnings (loss) per common share		0.42		(0.09	)
Diluted earnings (loss) per common share		0.38		(0.09	)

For the three month period ended March 31, 2013, the diluted loss per share was the same as the basic net loss per share since the dilutive effect of stock options, warrants and other convertible instruments was not included in the calculation; otherwise the effect would have been anti-dilutive. Accordingly, the diluted loss per share for the period was calculated using the basic weighted average number of common shares outstanding.

37. Sale of WagerLogic Malta Holdings Ltd.

On February 11, 2014, the Corporation announced that pursuant to a share purchase agreement dated November 27, 2013, one of its subsidiaries has completed the previously announced sale to Goldstar Acquisitionco Inc. of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. for $70 million, less a closing working capital adjustment satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date. The purchase price is subject to customary post-closing adjustments.

Subsidiaries of Amaya will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to a services agreement.

The Share Purchase Agreement includes an earn out agreement pursuant to which the vendor thereunder may receive additional cash consideration payable on the second and third anniversary date from closing based on the achievement of certain revenue targets, as well as a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($11.05 million CAD), of which USD$7.65 million ($8.46 million CAD) is recorded in Provisions in the consolidated statement of financial position at March 31, 2014.

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38. Subsequent Events

On May 15, 2014, Amaya’s wholly-owned subsidiary Cadillac Jack, Inc. (“Cadillac Jack”) obtained credit facilities from FS Investment Corporation and FS Investment Corporation II for the purpose of financing working capital expenses and general corporate purposes of the Amaya group. These lending entities are advised by FB Income Advisor, LLC and FSIC II Advisor, LLC, respectively, and sub-advised by an affiliate of GSO Capital Partners LP, Blackstone’s credit business. The credit facilities provide for (1) an incremental US$80 million term loan to Cadillac Jack’s existing US$160 million senior term loan, with the new aggregate principal amount of US$240 million bearing interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”); and (2) mezzanine debt in the form of a subordinated term loan in the aggregate principal amount of US$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash (the “Mezzanine Facility”, and collectively with the Senior Facility, the “New Facilities”). The Senior Facility will mature over a 5-year term and the Mezzanine Facility will mature over a 6-year term from the closing date. The Senior Facility is secured by the assets of Cadillac Jack and its subsidiaries. The Mezzanine Facility is unsecured. Amaya has provided an unsecured guarantee of the obligations under the New Facilities of Cadillac Jack in favour of the lenders. The New Facilities contain customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios. Amaya has agreed to grant the lenders, in relation to the Mezzanine Facility, with 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD $15 at any time up to a period ending 10 years after the closing date. The grant of the share purchase warrants is subject to the final approval of the Toronto Stock Exchange.

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EX-99.29

Exhibit 99.29

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TABLE OF CONTENTS	Management’s Discussion and Analysis	1
	Overview	1
	Outlook	6
	Basis of Presentation	7

	Forward-looking Statements	8

	Selected Financial Information	9

	Financial Condition	9

	Summary of Quarterly Results	10

	Comparison of Results	10

	Comparison of the Three-month period ended March 31, 2014 and March 31, 2013	10

	Comparison of the Three-Month Period Ended March 31, 2014 and December 31, 2013	11

	Liquidity and Capital Resources	12

	Cash Flows by Activity	16

	Summary of Significant Accounting Policies	17

	Change in Accounting Policies	31

	Recent Accounting Pronouncements	32

	Off Balance Sheet Arrangements	33

	Cautionary Note Regarding Forward Looking Statements	37

	Further Information	37

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Management’s Discussion and Analysis

The following discussion and analysis provides a review of the Corporation’s results of operations, financial condition and cash flows for the three month period ended March 31, 2014. This document should be read in conjunction with the information contained in the Corporation’s consolidated financial statements and related notes for the three month period ended March 31, 2014, which were prepared in accordance with International Financial Reporting Standards. The consolidated financial statements and additional information regarding the business of the Corporation are available at www.sedar.com

For reporting purposes, the Corporation prepares consolidated financial statements in Canadian dollars and in conformity with International Financial Reporting Standards. Unless otherwise indicated, all dollar (‘‘$’’) amounts in this Management Discussion and Analysis are expressed in Canadian dollars. References to ‘‘EUR’’ are to European Euros, references to “GBP” are to Pounds Sterling, references to ‘‘USD’’ are to U.S. dollars, references to “MXN” are to Mexican Peso and references to “SEK” are to Swedish Kronor.

This Management Discussion and Analysis (MD&A) is dated May 15, 2014, for the three month period ended March 31, 2014.

Overview

Founded in 2004, Amaya Gaming Group Inc. (“Amaya” or the “Corporation”) is engaged in the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide. Amaya’s objective is to become a leading provider of technology-based gaming solutions while maintaining a steadfast commitment to the highest levels of integrity and responsibility.

Amaya provides products, services and systems to land-based and online gaming operators, government bodies and the hospitality industry. Amaya’s solutions are designed to provide end users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, and thereby improve the profitability, productivity, security and brand of the operator.

The Corporation offers a true ecosystem of physical, virtual and mobile gaming solutions to capitalize on the convergence of physical and interactive gaming (e.g. casino and gov’t/lottery operators expanding into iGaming). The Corporation believes such convergence can help operators achieve a higher yield per customer by enabling them to acquire a customer through one medium (physical or interactive) and then leverage its existing brand, marketing and loyalty programs, and a common wallet to cross sell its other offerings.

Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions. Throughout its history, Amaya has continually strived to improve its offering of solutions and services to address both the markets it serves as well as new domestic and international opportunities.

Products and Services

Amaya has one reportable segment, Diversified Gaming Solutions, which in the first quarter ended March 31, 2014 consisted primarily of the following categories of solutions and services: interactive gaming solutions, land-based gaming solutions, and lottery solutions.

Interactive Gaming Solutions

Amaya’s interactive gaming solutions include:

An online casino solution including Amaya’s Casino Gaming System (“CGS”), a remote gaming server that provides gaming operators access to Amaya’s library of hundreds of online casino games from Amaya and multiple best-of-breed third party content developers, available through a seamless integration of Amaya’s CGS with the operator’s software platform. Amaya’s games offering includes online and mobile slot, video poker and table games including branded content and top games from several other leading games suppliers in the industry, available to operators through a single integration of the CGS to their platform. Amaya’s CGS also includes a powerful back office solution including reporting functionality, configuration capability, and bonus offering provision capability, as well as customer service and risk support. Amaya’s interactive gaming offering was expanded by its acquisitions of online casino pioneers Chartwell Technology Inc. (“Chartwell”), a leading developer and provider of an online casino gaming platform and online casino gaming titles, in July, 2011; and, CryptoLogic Ltd. (“CryptoLogic”), a developer and provider of an extensive library of online casino games as well as online casino software and services, in April, 2012.

ii.

Related services including technology, customer service and risk support, as well as promotional and marketing services for affiliate management, product and games operation and management, website development, player retention, search engine optimization, business intelligence/analytics, and customer relationship management.

iii.

Amaya’s Ongame poker software and network solutions. Amaya acquired this poker platform through its acquisition of Ongame Networks Ltd. (“Ongame”) in November, 2012. Ongame offers a complete business-to-business online poker solution for gaming operators that allows them to offer poker under their own brand and through their own custom designed web portals while participating in a poker network of players from Ongame’s gaming operator licensees.

iv.

The Amaya Game Office player management software platform (“AGO”), which was launched in 2013 following Amaya’s integration of Ongame. The AGO platform provides gaming operators with support for multiple custom-built web portals/brands on all devices with the ability to offer all interactive gaming verticals including online casino, poker, sportsbook (betting) and bingo. It allows for the seamless integration of content for these verticals from Amaya and third-party providers. It also incorporates best of breed third party customer relationship management, business intelligence, and marketing tools which are tightly integrated to provide marketers with the ability to run seamless end-to-end automated campaigns and promotions. All customer and game data are available through a central repository data warehouse. Related services include end-user technical support, software maintenance and hosting services, software security and backup services, payment and anti-fraud services.

Amaya’s all-in-one Mosino hospitality platform, targeting hospitality industry participants as well as gaming operators. Depending on the environment, the Mosino software platform can provide: digital concierge services that manage all guest requests/communication on a single platform as well as revenue producing services such as Internet/Wi-Fi access for all guest devices anywhere on the resort, video-on-demand service with continuously updated content, and online casino including peer-to-peer or house-banked games, through networked or stand-alone play. All aspects of Mosino can be managed from a single system, with management, reporting and attendant portals that can be used by the customer’s employees, with systems updates, maintenance, training and support available to the operator. Mosino acts as a private cloud in the operator’s facility. Any web enabled device, including TVs, laptops, tablets and mobile phones, can interact with the entire Mosino system, with no app download required.

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Land-based Gaming Solutions

Amaya’s land-based gaming solutions consist primarily of games and game systems, and related services and support, for the Mexican gaming market and Class II and Class III gaming markets in the United States of America (“U.S.”), including Tribal casinos, commercial casinos, charitable gaming establishments/bingo halls, the video lottery terminal (VLT) market and racetracks. They include:

Through its subsidiary Cadillac Jack Inc. (“Cadillac Jack”), acquired in November, 2012, Amaya designs, manufactures and markets a dynamic portfolio of electronic games and systems for the regulated global gaming industry, offering a variety of high performing, feature-rich products designed for premium player experiences, with a variety of game themes, bonus options and math models; progressive product lines including wide area, local area and multi-level progressives which offer players rewarding jackpots across a variety of cabinet styles and games; and slot management services and systems, including tools to monitor and balance the mix of gaming machines on a casino floor. It develops content and technologies specific to the needs of each of the markets it serves, notably the Class II and Class III Tribal and Commercial gaming markets in the U.S. and the Mexican gaming market. Cadillac Jack’s gaming machines feature proprietary games from a library of more than 100 game titles, with new titles developed on a continuous basis, that are available in multiple cabinet configurations.

ii.

Through its subsidiary Diamond Game Enterprises (“Diamond Game”), acquired subsequent to year end in February, 2014, Amaya develops products for the VLT, Class II bingo, and Class III commercial casino and racetrack markets. Diamond Game’s library of over 60 games contains entertaining features such as the patented WINometer, multi-denomination progressives, random bonusing, and popular licensed music, with games available in multiple cabinet configurations.

Lottery Solutions

Amaya’s Lottery Solutions are designed to permit gaming jurisdictions to exploit additional sources of revenue. They consist primarily of the following:

Instant Ticket Vending Machines

Diamond Game’s primary lottery product is the LT-3 instant ticket vending machine (ITVM). The LT-3 is an electronic ticket dispenser that dispenses pre-printed instant scratch or break open/pull-tab tickets on each play but also with video animation of the game result to enhance entertainment and bring excitement to the player experience. Diamond Game’s full library of game themes is available for all LT-3 cabinet types, and the game result can be displayed using various video animation options including pull tab display, scratch display, popping symbols or spinning reels. The LT-3 is designed for ‘stay and play’ use, creating longer play sessions and higher sales volumes, to assist lotteries with expanding their existing retailer base into less traditional venues, such as bars, taverns, bingo halls, veteran’s halls, and social clubs. Through Diamond Game, Amaya holds multiple patents related to the unique devices. The ITVMs can be linked across locations to a robust central system that provides accounting records. Through Diamond Game, Amaya can provide a turnkey solution including the machines, tickets, central system, and service.

ii.

Mobile Lottery

Amaya’s mobile based lottery solution is a software platform that operates lotteries via mobile and cellular devices, allowing participants to play popular lottery games using mobile and cellular technology. Mobile technology simplifies deployment and reduces logistical costs for the lottery/gaming operator as it doesn’t require a network of ticket distributors and retail outlets, while ensuring higher levels of assurance over customer identification, thereby promoting lottery integrity.

Acquisitions

The Corporation announced in early 2011 that in order to further strengthen its market position and facilitate its anticipated growth, it intended to selectively assess acquisition opportunities based on the target company’s jurisdictional status, the degree of synergy between the target company’s technologies and Amaya’s core technologies, and the extent to which the target company had a customer base that was complementary to Amaya’s. Since that time, Amaya has completed multiple strategic acquisitions that have significantly expanded its diversified gaming solutions, delivering channel capability and expanded market reach. The increased scope and scale of Amaya’s gaming solutions subsequent to the acquisitions have also resulted in the Corporation shifting its focus from emerging markets to significantly larger markets, notably the U.S. and Europe, where its acquired companies have established operations and customer relationships.

On July 14, 2011, Amaya completed the acquisition of all of the outstanding shares of Chartwell. Since November of 1999, Chartwell had been focused primarily on the development, marketing and licensing of its gaming software and was certified or licensed to offer a range of services in all of the leading regulated online gaming markets. Chartwell was a leading provider of games, gaming systems and gaming platform for the regulated online casino gaming industry. Its games library included more than 100 proprietary and third-party licensed online casino titles including branded content, slots, table games and a live dealer product, which it licensed to online casino operators along with its Chartwell Games Platform, which included rapid games deployment architecture and a powerful back office solution.

On April 3, 2012, Amaya announced that following its acquisition of 80.79% of the issued share capital of CryptoLogic, it took control of the board of CryptoLogic. It subsequently completed the purchase of the remaining outstanding share capital of CryptoLogic. A pioneer in online casino, CryptoLogic was founded in 1995 and was a leading developer and supplier of Internet gaming software. With more than 300 games, CryptoLogic had one of the most comprehensive casino suites on the Internet, with award-winning games featuring branded content including some of the world’s most famous action and entertainment characters. CryptoLogic provided software licensing, e-cash management and customer support services for its Internet gambling software to an international client base including many top Internet gaming brands.

On November 1, 2012, Amaya announced that it had completed the purchase of Ongame from bwin.party digital entertainment plc. Ongame is a provider of poker software and network solutions.

On November 5, 2012, Amaya announced that it had completed the purchase of Cadillac Jack, an acquisition previously announced on September 25, 2012.

On February 14, 2014, Amaya announced that it had closed its acquisition of Diamond Game, a private and arms-length company.

First quarter and Subsequent Highlights

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of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash (the “Mezzanine Facility”, and collectively with the Senior Facility, the “New Facilities”). The Senior Facility will mature over a 5-year term and the Mezzanine Facility will mature over a 6-year term from the closing date. The Senior Facility is secured by the assets of Cadillac Jack and its subsidiaries. The Mezzanine Facility is unsecured. Amaya has provided an unsecured guarantee of the obligations under the New Facilities of Cadillac Jack in favour of the lenders. The New Facilities contain customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios. Amaya has agreed to grant the lenders, in relation to the Mezzanine Facility, with 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD $15 at any time up to a period ending 10 years after the closing date. The grant of the share purchase warrants is subject to the final approval of the Toronto Stock Exchange

On February 11, 2014, Amaya announced that pursuant to a share purchase agreement dated November 27, 2013, one of its subsidiaries had completed the previously announced sale to Goldstar Acquisitionco Inc. (“Goldstar”)of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“WagerLogic”) for $70 million (the “Purchase Price”), less a closing working capital adjustment of $7.5 million, satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date (the “WagerLogic Sale”). The Purchase Price is subject to customary post-closing adjustments. WagerLogic, through a subsidiary, is an online casino operator through its “Inter” brand consisting of InterCasino™, InterPoker™ and InterBingo™, amongst other online names (the “InterCasino Business”). The InterCasino business was acquired by Amaya through its acquisition of CryptoLogic. Subsidiaries of Amaya (the “Service Providers”) will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to services agreements. The Share Purchase Agreement provides for a bonus payment of USD $10 million if CryptoLogic Operations Limited (“CryptoLogic Operations”), the wholly-owned operating subsidiary of WagerLogic, achieves a net revenue target of USD $30 million during the second year following closing (payable in 12 monthly instalments during the third year following closing), and a bonus payment of USD $10 million if CryptoLogic Operations achieves a net revenue target of USD $40 million during the third year following closing (payable in 12 monthly instalments during the fourth year following closing). Amaya and its Service Providers have entered into a revenue guarantee agreement ( the “WagerLogic Revenue Guarantee”), under which they jointly and severally guarantee the financial obligations of the Service Providers under the service agreements, including an obligation to pay CryptoLogic Operations, during the next two years, an amount equal to the shortfall between CryptoLogic Operation’s quarterly net revenue and a pre-established quarterly net revenue target of USD $4.75 million. On March 7, 2014, Amaya announced that it had acquired in aggregate beneficial ownership and control of 1.9 million common shares of WagerLogic’s parent company The Intertain Group Ltd. (TSX: IT) (“Intertain”) (the outstanding securities of Goldstar were exchanged for securities of Intertain in February, 2014) representing 13.97% of the issued and outstanding Intertain common shares. Amaya also owns $3.85 million aggregate principal amount of 5.0% unsecured subordinate convertible debentures of Intertain maturing on December 31, 2018 (TSX: IT.DB), which are convertible at the option of the holder into common shares of Intertain at a price of $6.00 per common share, as well as 353,000 Intertain common share purchase warrants, with each whole warrant being exercisable by the holder for one Intertain common share at an exercise price of $5.00 per share until December 31, 2015. The securities were acquired for investment purposes. Amaya has no current plan or proposal, which relates to, or would result in, acquiring additional ownership or control over the securities of Intertain.

On February 14, 2014, Amaya announced that it had closed its previously announced acquisition of 100% of the issued and outstanding securities (the “Transaction”) of the private, arms-length company Diamond Game, a designer and manufacturer of gaming related products for the global casino gaming and lottery industries (the “Diamond Game Acquisition”). The purchase price was USD$25 million, subject to customary post-closing purchase price adjustments, to acquire 100% of the equity of Diamond Game and retire its debt. Amaya paid USD$18 million on closing of the Transaction

from cash on hand with a USD$7 million holdback for certain contingent liabilities and other items. Diamond Game recorded revenues and net loss of approximately USD$16.92 million (2012 – USD$ 13.91 million) and USD$2.02 million (2012 – USD$ 3.55 million) respectively in the fiscal year ended December 31, 2013, and USD$3.31 million in net cash (2012 – USD$ (0.41) million) provided by operating activities. If the acquisition had occurred on January 1, 2014, Diamond Game would have contributed USD$4.97 million and USD$0.35 million to consolidated revenues and net income respectively. Since the date of acquisition, Diamond Game has contributed USD$2.54 million and USD$0.29 million to consolidated revenues and net income respectively.

On February 19, 2014, Amaya announced that its subsidiary Diamond Game Enterprises (“Diamond Game”) had been awarded a 5-year contract with the Maryland Lottery and Gaming Control Agency (the “Lottery”), with the Lottery holding a five year renewal option, to provide Veterans’ Organizations (VOs) in the state with Instant Ticket Lottery Machines (ITLM) and related services. The Contract allows for the placement of up to five ITLMs at each qualified VO meeting hall in Maryland. The Lottery estimates there are currently 150 qualified organizations that may apply for the ITLMs. Diamond Game anticipates deployment of ITLMs to commence by the end of 2014 throughout the state. Under the Contract, Diamond Game will receive a firm-fixed percentage of the ITLM proceeds. The Contract amount is estimated by the Lottery at up to USD$57 million over the original five year term and an additional amount of up to USD$60 million for the renewal option based upon its projected number of ITLMs placed at VO meeting halls and the projected win for those ITLMs.

On April 1, 2014, Amaya announced that one of its subsidiaries has entered into a licensing agreement with Fertitta Acquisitions Co, LLC, d/b/a Ultimate Gaming (“Ultimate Gaming”), a majority-owned subsidiary of Station Casinos LLC, to provide online casino gaming content to Ultimate Gaming in New Jersey, subject to all applicable jurisdictional licensing requirements and regulatory approvals. Under the Agreement, the online gaming website ucasino.com, operated by Ultimate Gaming for its licensed gaming partner Trump Taj Mahal Associates, LLC, in New Jersey, will offer a wide selection of Amaya’s proprietary games that are available on its Casino Gaming System (“CGS”) platform. The Agreement allows for the potential integration of other gaming websites operated by Ultimate Gaming to CGS in the future.

On April 16, 2014, Amaya announced that its subsidiary Cadillac Jack has entered into multiple agreements to ship approximately 1,100 gaming machines to existing and new customers in the United States, with installation of the machines anticipated to occur in the second quarter of 2014. The shipments are primarily comprised of outright sales of gaming machines, but also include the upgrading of some existing revenue share generating gaming machines. The majority of units shipped will be Class II machines, but will also include some sales of Class III machines to customers based in Oklahoma and California. Amaya also announced that Cadillac Jack had received a license to provide its land-based solutions to Class III gaming operations in Wisconsin.

On May 2, 2014, Amaya announced that its subsidiary Cadillac Jack had received approval from New Jersey’s Division of Gaming Enforcement to utilize its Genesis DV1 slot machine platform and associated hardware and software, including top performing game titles Fire Wolf, Siberian Siren, and Legend of White Buffalo, in the state. Cadillac Jack has applied to the DGE for transactional waivers to begin supplying machines to Atlantic City casinos. Subject to receiving the transactional waivers, Cadillac Jack anticipates initial deployment of its gaming machines will begin immediately, with multiple Atlantic City casinos engaged to trial them.

Outlook

Amaya’s corporate strategy consists of extending its market footprint by facilitating the delivery of gaming content across physical and interactive media. Amaya’s strategy is reinforced by its existing portfolio of developed and acquired technologies. Amaya continues to focus on the creation of long-term shareholder value and further develop its core strength as a gaming technology provider.

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Amaya markets its solutions to gaming operators licensed in regulated gaming jurisdictions, as well as governments and hospitality industry operators. The Corporation’s most significant markets are presently in North America, Europe and Latin America & the Caribbean. Amaya aims to increase its penetration within these markets.

Amaya intends to target expansion of its interactive gaming solutions, including into newly regulated markets, notably in the U.S. The U.S. Department of Justice recently issued an opinion on its stance on online gaming, to the effect that only sports betting is subject to the Federal Wire Act of 1961 and all other forms of online gambling is permitted. As a result, three states, New Jersey, Delaware and Nevada, have subsequently regulated online gaming. Amaya’s acquisitions, and subsequent integration and product development efforts, have provided it with the scope and scale to participate in the nascent real money online gaming market in the U.S. Amaya received transactional waivers from the New Jersey Division of Gaming Enforcement in 2013 to supply technology for real money online gaming websites operated by licensed permit holders in New Jersey. In late November 2013, real money online gaming went live in New Jersey, the third and thus far largest U.S. state to have approved it, following Nevada and Delaware. Amaya has thus far announced agreements to supply five of the seven current permit holders licensed to operate real money online gaming websites within the state of New Jersey. The Corporation intends to offer its interactive gaming solutions to other online gaming operators, and will look to do so in other states as well as a regulatory framework is implemented in them.

Specific to land-based solutions, Amaya, notably through its subsidiary Cadillac Jack, has a strong position in the provision of gaming machines to the Class II Tribal and Mexican gaming markets. It is also expanding its presence in the much larger Class III tribal and commercial gaming markets. To do so, it is actively seeking to obtain new Class III and commercial gaming licenses in the U.S. and other regulated gaming markets to expand the addressable market to whom it can provide its gaming solutions. It focuses on marketing its solutions to licensed gaming operators that are expanding or opening new operations, seeking to upgrade their existing solutions and business intelligence, or aiming to reduce reliance on their existing suppliers of gaming machines.

Finally, with the acquisition of Diamond Game completed, Amaya intends to market its lottery solutions to governments and lottery operators looking to generate new sources of revenue by modernizing traditional lottery products with enhanced entertainment and delivery systems. Currently, Amaya’s lottery solutions, notably its ITVMs, are placed in four North American jurisdictions through the relevant lottery authority. Amaya intends to market its lottery solutions to lottery operators in other jurisdictions.

Data compiled by gambling industry consultants H2 Gambling Capital, released as at February 27, 2014, projects total global gambling market gross win to increase to approximately €392 billion (10.5% from interactive gaming) in 2018 from an estimated €316 billion in 2013 (8.2% from interactive gaming), with gambling divided into the product verticals of Betting, Casino, Lotteries, Gaming Machines and Bingo/Other Gaming and Interactive Gaming divided into the product verticals of Betting, Casino, Poker, State Lotteries, Bingo, and Skill/Other Gaming/Commercial Lotteries. Management believes that Amaya is well positioned to grow by leveraging its cutting-edge technology, its regulatory status and potentially through strategic acquisitions to gain market share within the industry.

Basis of Presentation

The following information and comments are intended to provide a review and analysis of the Corporation’s operational results and financial position for the three month period ended March 31, 2014, as compared to the corresponding period ended on March 31, 2013. This MD&A should be read in conjunction with the consolidated financial statements and related notes for the three month period ended March 31, 2014. Such consolidated financial statements, and the respective notes thereto have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Unless otherwise indicated, the information contained herein is stated as of March 31, 2014.

Forward-looking Statements

This MD&A may contain statements that are forward-looking in nature. These forward-looking statements may involve, but are not limited to, comments with respect to the Corporation’s business or financial objectives, its strategies or future actions, its targets, expectations for financial condition or outlook on operations. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements as a result of various factors, including commercialization, economic dependence, certification and product approvals, regulatory environment, product defects, strategic alliances, capital requirements, intellectual property protection, litigation, as more fully described in the business risk and uncertainties section hereinafter. Assumptions relating to the foregoing involve judgments and risks, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Corporation. Although Management believes that the expectations reflected in the forward-looking statements are reasonable based on information currently available, it cannot assure that the expectations will prove to have been correct. Accordingly, one should not place undue reliance on forward-looking statements.

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Selected Financial Information


	For the three month period ended		For the Year ended
	March 31, 2014 $		December 31, 2013 $
Total Revenue		41,202,223		154,529,443
Net Income (Loss)		39,643,610		(29,172,857	)
Basic Earnings (Loss) Per Share		0.42		(0.33	)
Diluted Earnings (Loss) Per Share		0.38		(0.33	)
Total Assets		519,062,710		440,831,004
Total Long Term Financial Liabilities		220,245,195		200,947,508
Cash Dividends Declared Per Share		—		—

Financial Condition

The Corporation’s asset base increase was driven by the proceeds of the WagerLogic Sale and the Diamond Game Acquisition. The Corporation’s increase in liabilities was driven by a provision related to the WagerLogic Revenue Guarantee and the holdback related to the Diamond Game Acquisition.

Based on the Corporation’s current revenue expectations, the funds available from the Corporation’s private placement of debt and shares, the funds available from refinancing of its senior secured term loan, and the funds available from the WagerLogic Sale, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.


	For the three month period ended March 31,
	2014 $		2013 $
Revenues by Geographic Area
North America		18,168,235		15,728,922
Europe		9,757,986		14,403,118
Latin America & Caribbean		13,276,002		7,921,207

The revenue increase in Latin America & Caribbean for the three month period ended March 31, 2014 relative to the three month period ended March 31, 2013 is primarily attributable to increased sales of gaming machines.

The revenue increase in North America for the three month period ended March 31, 2014 relative to the three month period ended March 31, 2013 is primarily attributable to growth in Cadillac Jack revenues and the consolidation of Diamond Game revenues, offset by software licensing revenue related to SHFL agreement earned during the three month period ended March 31, 2013.

The revenue decrease in Europe for the three month period ended March 31, 2014 relative to the three month period ended March 31, 2013 is primarily attributable to the decrease in hosted casino revenue driven by the WagerLogic Sale and a decrease in software licensing revenue generated by Ongame.

Summary of Quarterly Results


For the three months ended	30-Jun-12 $			30-Sep-12 $		31-Dec-12 $			31-Mar-13 $			30-Jun-13 $			30-Sep-13 $			31-Dec-13 $			31-Mar-14 $
Revenue		14,539,519			18,317,140		37,194,312			38,053,247			37,254,390			40,213,213			39,008,593			41,202,223
Net income (loss)		(2,724,440	)		881,451		(711,309	)		(7,440,841	)		(11,441,570	)		(3,466,018	)		(6,824,429	)		39,643,610
Basic earnings (loss) per Common share		(0.05	)		0.01		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.42
Diluted earnings (loss) per Common share		(0.05	)		0.01		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.38

Comparison of Results

Comparison of the Three-month period ended March 31, 2014 and March 31, 2013

REVENUE

Revenue for the three month period ended March 31, 2014, was $41.20 million compared to $38.05 million for the three month period ended March 31, 2013, representing an increase of 8%. This is primarily attributable to an increase in gaming machines sold outright and under finance lease. The revenue for the three month period ended March 31, 2014, was generated from financing income, financing leases, participation leases, outright sales, hosted casino, and software licensing of the Corporation’s solutions in the amounts of $0.17 million, $1.23 million, $23.72 million, $5.24 million, $1.21 million, and $9.64 million respectively (Q1 2013 – $0.07 million, $0.15 million, $19.75 million, $0.64 million, $3.92 million, $13.52 million).

COST OF PRODUCTS

Cost of products relates to the cost of products that are sold outright or under finance leases; such products are typically physical gaming products such as slot machines. Cost of products increased from $0.12 million in the three month period ended March 31, 2013, to $1.97 million in the three month period ended March 31, 2014. The increase reflects the increase in sales of gaming machines.

SELLING

Sales and marketing expenses increased from $3.70 million for the three month period ended March 31, 2013, to $4.15 million for the three month period ended March 31, 2014, representing an increase of 12%. The increase was driven by increased trade show expenditures, shipments of gaming machines and increased royalty payments to third party brand and game developers during the three month period ended March 31, 2014.

GENERAL AND ADMINISTRATIVE

General and administrative expenses increased from $34.40 million for the three month period ended March 31, 2013, to $38.76 million for the three month period ended March 31, 2014, representing an increase of 13%. The increase was driven by (i) a growing employee base due to the Diamond Game acquisition; (ii) increased amortization of intangibles, property and equipment, and deferred development costs; (iii) increased repairs and maintenance expenses associated with Diamond Game’s install base; (iv) increased stock-based compensation; partially offset by the following: (v) lower employment agreement termination expenses in Q1 2014; and, (vi) higher consulting expenses in Q1 2013, in connection with developing the AGO platform.

LOGO

FINANCIAL

Financial expenses decreased from $6.21 million for the three month period ended March 31, 2013, to $1.06 million for the three month period ended March 31, 2014. The decrease is primarily attributable to (i) a strengthening of the EURO and USD versus the CAD; (ii) interest accretion on convertible debentures in connection with the offer to buy all of the outstanding shares of Cryptologic during the three month period ended March 31, 2013.

ACQUISITION RELATED EXPENSES

Acquisition related expenses increased from $0.31 million for the three month period ended March 31, 2013, to $3.65 million for the three month period ended March 31, 2014. The increase is driven by professional fees incurred in connection with the acquisition of Diamond Game during the three month period ended March 31, 2014.

CURRENT AND DEFERRED INCOME TAX

Current income taxes increased from $0.69 million for the three month period ended March 31, 2013, to $4.10 million for the three month period ended March 31, 2014. The increase is primarily attributable to the Corporation being taxable in a number of tax jurisdictions in which it operates.

For the three month period ended March 31, 2014, the Corporation recognized deferred income tax recovery driven primarily by differences between accounting and tax treatment of purchase price allocated intangibles.

Comparison of the Three-Month Period Ended March 31, 2014 and December 31, 2013

REVENUE

Revenue for the three month period ended March 31, 2014, was $41.20 million compared to $39.01 million for the three month period ended December 31, 2013, representing an increase of 6%. This revenue increase was driven by consolidating Diamond Game participation arrangement revenue and higher Cadillac Jack participation lease revenue partially offset by decrease in software licensing revenue by Ongame.

COST OF PRODUCTS

Cost of products relates to the cost of products that are sold outright or under finance leases; such products are typically physical gaming products such as slot machines. Cost of products decreased from $2.61 million in the three month period ended December 31, 2013, to $1.97 million in the three month period ended March 31, 2014. The decrease reflects the sales, both outright and under finance lease, of slot machines in Q1 2014, which have a lower cost of products than new gaming machines, which were what comprised sales in Q4 2013.

SELLING

Sales and marketing expenses increased from $3.12 million for the three month period ended December 31, 2013, to $4.15 million for the three month period ended March 31, 2014. The increase was driven by trade show expenditures and higher royalty payments to third party brand and game developers during the three month period ended March 31, 2014.

GENERAL AND ADMINISTRATIVE

General and administrative expenses increased from $33.37 million for the three month period ended December 31, 2013, to $38.76 million for the three month period ended March 31, 2014. The increase was driven by (i) a growing employee base due to the Diamond Game acquisition; (ii increased employment agreement termination expenses incurred during the three month period ended March 31, 2014; (iii) increased repairs and maintenance expenses associated with Diamond Game’s install base; and (iv) increased amortization of property and equipment.

FINANCIAL

Financial expenses decreased from $6.04 million for the three month period ended December 31, 2013, to $1.06 million for the three month period ended March 31, 2014. The decrease is primarily attributable to a strengthening of the EURO and USD versus the CAD.

ACQUISITION RELATED EXPENSES

Acquisition related expenses increased from $0.15 million for the three month period ended December 31, 2013, to $3.65 million for the three month period ended March 31, 2014. The increase is driven by professional fees incurred in connection with the acquisition of Diamond Game during the three month period ended March 31, 2014.

CURRENT AND DEFERRED INCOME TAX

Current income taxes increased from $(1.10) million for the three month period ended December 31, 2013, to $4.10 million for the three month period ended March 31, 2014. The increase is primarily attributable to the Corporation being taxable in a number of tax jurisdictions in which it operates.

Liquidity and Capital Resources

Based on the Corporation’s current revenue expectations, the funds available from the Corporation’s private placement of debt and shares, the funds available from refinancing of its senior secured term loan, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.

Moreover, Management is of the opinion that investing is a key element necessary for the continued growth of the Corporation’s clientele and the future development of new and innovative products and solutions. The state of capital markets may influence the Corporation’s ability to secure the capital resources required to fund future projects.

The Corporation has entered into financing lease agreements involving extended payment terms. The terms of these financing lease agreements permit the customer to make recurring, fixed monthly payments over the lease term. The Corporation believes these agreements will not impair its ability to meet its short-term liabilities.

The Corporation is exposed to liquidity risk with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring forecasted and actual cash flows and matching maturity profiles of financial assets and liabilities. The Corporation’s objective is to maintain a balance between continuity of funding and flexibility through borrowing facilities available through the Corporation’s bank and other lenders. The Corporation’s policy is to ensure adequate funding is available from operations, established lending facilities and other sources as required.

LOGO


	On Demand $		Less Than 1 year $		1-3 years $		4-5 years $		More Than 5 years $
March 31, 2014
Accounts payable and accrued liabilities		34,346,744		—		210,944		140,629		244,537
Provisions		13,089,579		—		1,025,834		—		257,244
Customer deposits†		5,107,991		—		—		—		—
Income taxes payable		1,409,989		—		—		—		—
Holdback of purchase price		—		—		7,738,500		—		—
Equipment financing*		—		1,337,685		618,312		—		—
Long-term debt*		—		18,730,329		63,919,185		181,981,711		—
Commitments under lease agreements for premises, hardware support contracts, and purchase obligations		—		11,075,000		7,922,000		2,069,000		113,000

Total		53,954,303		31,143,014		81,434,775		184,191,340		614,781

†

Obligations assumed in connection with the acquisition of Ongame. These have been substantially settled, thus resulting in a reduced balance since acquisition. Additionally, since acquisition, the vast majority of funds have been managed directly by Ongame licensees through their own mobile payment solutions

*	Includes capital and interest

CREDIT FACILITY

As at March 31, 2014, the outstanding amount of the revolving demand credit facility is $nil (December 31, 2013- $nil).

The Corporation has a term loan facility of $12 million provided by Export Development Canada to fund qualified expenditures.

As at March 31, 2014, the outstanding amount of the credit facility is $nil (December 31, 2013- $nil).

LONG-TERM DEBT

The following is a summary of long-term debt outstanding at March 31, 2014 and December 31, 2013:


	March 31, 2014 $		December 31, 2013 $
Current maturity		2,185,463		2,387,557
Long-term debt		199,358,181		192,798,839

		201,543,644		195,186,396

(a)	Subordinated Debt

interest at the annual rate of 14% plus an additional interest representing 1% of yearly gross sales of the Corporation for the first $25 million of sales and an additional 0.20% for sales over $25 million. In the event that only the first drawing is disbursed by the lender, the calculation of the additional interest shall be adjusted to 0.5% of the first $25 million of the Corporation’s gross sales for a given year, and to 0.1% of the Corporation’s gross sales exceeding $25 million for a given year. Any amount, principal or interest, which is not paid when due will bear interest at the annual rate of 25% until it is paid in full.

During the three month period ended March 31, 2014, the Corporation incurred $7,767 (2013 – $23,301) in interest.


	March 31, 2014 $			December 31, 2013 $
Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		200,000			275,000
Current maturity		(200,000	)		(275,000	)

		—			—

(b) Non-convertible subordinated debentures

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.

LOGO

During the three month period ended March 31, 2014, the Corporation incurred $886,679 (2013 – nil) in interest.


	March 31, 2014 $
Fair Value of Liability component		26,844,352
Fair Value of Equity component		3,155,648
Face Value		30,000,000

Transaction costs		1,831,234

The following table reflects movements recognized during the three month period ended March 31, 2014.


	Face value		Liability component		Equity component
Opening balance (net of transaction costs)		30,000,000		25,205,742		2,963,024
Accretion of liability component (effective interest of 13.60%)		—		1,448,697		—

Balance at March 31, 2014		30,000,000		26,654,439		2,963,024

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$
2015		—
2016		30,000,000

Cadillac Jack has entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack will have access to term loans in an aggregate principal amount of up to $160 million (the “Credit Facilities”). The Credit Facilities have replaced the existing $110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya, as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses and will be used to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. The Credit Facilities bear interest at a rate of LIBOR plus 7.00% with a LIBOR floor of 1.00% per annum payable quarterly commencing March 20, 2014. The Credit Facilities have a term of 4 years from the closing date and are secured by the assets of Cadillac Jack and its subsidiaries. Amaya has provided an unsecured guarantee of the obligations of Cadillac Jack in favour of the lenders. The Credit Facilities have maintenance covenants based on maximum leverage and minimum coverage, for which the Corporation was in compliance with as of March 31, 2014.

During the three month period ended March 31, 2014, the Corporation incurred $3,530,570 (2013 - nil) in interest.


	March 31, 2014 $			December 31, 2013 $
Principal		176,437,800			170,176,000
Transaction costs		(2,086,552	)		(1,947,209	)
Accretion (effective interest rate of 8.35%)		124,673			12,558
Translation		(3,379	)		(63,305	)
Current maturity		(1,768,800	)		(1,701,760	)

		172,703,742			166,476,284

Term loan principal repayments over the next four years amount to the following:


	$
2015		1,768,800
2016		1,768,800
2017		1,768,800
2018		171,131,400

(d)	Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

During the three month period ended March 31, 2014, the Corporation incurred $6,312 (2013 – $10,855) in interest.


	March 31, 2014 $			December 31, 2013 $
Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		216,663			410,797
Current maturity		(216,663	)		(410,797	)

		—			—

Cash Flows by Activity

The table below outlines a summary of cash inflows and outflows by activity.

Cash Inflows and (Outflows) by Activity:


	For the three month period ended
	March 31, 2014 $			March 31, 2013 $
Operating activities		1,252,189			7,481,455
Financing activities		(352,238	)		23,789,439
Investing activities		23,892,954			(8,389,907	)

CASH PROVIDED BY (USED IN) OPERATIONS

The Corporation generated positive cash flows from operating activities for the three-month period ended March 31, 2014. This is primarily attributable to collections of accounts receivable and reduced investment in technical compliance and platform enhancements geared to the US online gaming market. Cash provided from (used for) operating activities for the three-month period ended March 31, 2014 was $1.25 million as compared to $7.48 million for the three-month period ended March 31, 2013. The decrease in cash flow from operating activities in the first quarter of 2014 relative to the first quarter of 2013 was driven by a lower amount of accounts receivable collections.

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

The cash provided from (used in) financing activities for the three-month period ended March 31, 2014 and March 31, 2013 was $(0.35) million and $23.79 million respectively. During the three-month period ended March 31, 2014, use of cash from financing activities was primarily related to repayment of long-term debt. During the three-month period ended March 31, 2013, cash from financing activities was primarily derived from proceeds of approximately $28.54 million related to issuance of debt partially offset by a share buyback of 660,800 shares.

LOGO

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

Cash provided by (used in) investing activities for the three month period ended March 31, 2014 was $23.89 million as compared to $(8.39) million for the three month period ended March 31, 2013. The increase in the three month period ended March 31, 2014 is primarily due to proceeds from the WagerLogic Sale of $52.5 million partially offset primarily by the Diamond Game Acquisition for USD$18 million.

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

These consolidated financial statements were prepared on a going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments.

PRINCIPLES OF CONSOLIDATION

ASSOCIATES

NON-CURRENT ASSETS HELD FOR SALE

REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Participation arrangements

LOGO

Software Licensing

Hosted Casino

Revenues from Hosted Casino are recognized as the services are performed, on a daily basis, at the time of the gambling transactions.

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

IAS 21 (‘‘Effects of Changes in Foreign Currency Rates’’) requires entities to consider primary and secondary indicators when determining the functional currency. Primary indicators are closely linked to the primary economic environment in which the entity operates and are given more weight. Secondary indicators provide supporting evidence to determine an entity’s functional currency. Once the functional currency of an entity is determined, it should be used consistently, unless significant changes in economic facts, events and conditions indicate that the functional currency has changed.

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Transactions and balances

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling
MXN		Mexican Peso
SEK		Swedish Krona

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

OPERATING SEGMENTS

The Corporation’s operating segment is organized around the markets it serves and is reported in a manner consistent with the internal reporting provided to the Chairman and Chief Executive Officer, the Corporation’s chief operating decision- maker. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Corporation. Currently the Corporation has only one operating segment, Diversified Gaming Solutions.

LOGO

FINANCIAL INSTRUMENTS

Financial assets

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). No financial assets are classified as fair value through profit or loss.

Available-for-sale

Held-to-maturity and loans and receivables

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the intention and ability to hold to maturity. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than twelve months after the consolidated statements of financial position date, which are classified as non-current assets. Financial instruments classified as held-to-maturity and loans and receivables are initially recorded at fair value and subsequently measured at amortized cost using the effective interest method. No financial assets are held-to- maturity. Cash and cash equivalents, restricted cash, receivable under finance lease, accounts receivable are classified as loans and receivables.

Impairment

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

LOGO

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

PROPERTY AND EQUIPMENT


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%

INTANGIBLE ASSETS


Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease

ACQUISITION-RELATED INTANGIBLES


Software Technology	Straight-line	5 years
Customer Relationships	Straight-line	15 years

GOODWILL

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

LOGO

The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

TAXATION

Current tax

Deferred tax

STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity- settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

LEASES

LOGO

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 19). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

Provision for minimum revenue guarantee

ROYALTIES

The Corporation licenses various royalty rights from several owners of intellectual property rights. These rights are used to produce games for use in Hosted Casino and Branded Games. Generally, the arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight-line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense.

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at March 31, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post-tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at March 31, 2014, was 12.00%. As at March 31, 2014, there was no need for impairment.

Impairment of other long-lived assets

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Stock-based compensation and warrants

Inventory write-down

Research and development investment tax credits

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

Contingent consideration

Provision for minimum revenue guarantee

JUDGMENTS

Finance leases

Deferred Development Costs

Estimated useful lives of long-lived assets

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enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

Change in Accounting Policies

Interests in Other Entities

The Corporation have adopted the following five standards applying to interests in other entities as at January 1, 2013:

IFRS 10, Consolidated Financial Statements;

IFRS 11, Joint Arrangements;

IFRS 12, Disclosure of Interests in Other Entities;

IAS 27, Separate Financial Statements (as amended in 2011); and

IAS 28, Investments in Associates and Joint Ventures (as amended in 2011).

IFRS 13, Fair Value Measurement

IFRS 13 defined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity-specific measurement, so assumptions that market participants would use should be applied in measuring fair value.

The adoption of IFRS 13 did not have an effect on our consolidated financial statements for the current period. The disclosure requirements of IFRS 13 are incorporated in the consolidated financial statements. This includes disclosures about fair values of financial assets and liabilities measured on a recurring basis and non-financial financial assets and liabilities measured on a non-recurring basis. Disclosures about assumptions used in calculating the fair value of assets classified as held for sale are included in the consolidated financial statements (note 11).

IAS 1, Presentation of Financial Statements

Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

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measure a liability at fair value will present the portion of the change in its fair value due to change in the entity’s own credit risk in the other comprehensive income section of the income statement (no longer recognized in profit or loss). Entities are allowed to apply this change before applying any of the other requirements in IFRS 9.

Off Balance Sheet Arrangements

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $21,179,000. The minimum annual payments are as follows:


	$
Within one year		11,075,000
Later than one year but not later than 5 years		9,991,000
More than 5 years		113,000

OUTSTANDING SHARE DATA

As at May 15, 2014, the Corporation had a total of 94,205,770 common shares issued and outstanding, 5,626,392 options issued under the Corporation’s stock option plan, and 6,589,470 share purchase warrants issued and outstanding.

BUSINESS RISKS AND UNCERTAINTIES

The Corporation operates in a rapidly changing environment that involves numerous risks and uncertainties, many of which are beyond Amaya’s control and which could have a material effect on Amaya’s business, revenue, operating results and financial condition.

Each of these risk factors could materially adversely affect the Corporation’s business, revenue, operating results and financial condition, as well as materially adversely affect the value of an investment in the securities of the Corporation.

The Corporation’s current principal risks and uncertainties as identified by Management are described below:

•

The manufacture and distribution of gaming solutions is subject to extensive scrutiny and regulation at all levels of government;

•

Online, social, casual and mobile gaming is a relatively new industry that continues to evolve. The success of this industry and Amaya’s online business will be affected by future developments in social networks, mobile platforms, legal or regulatory developments which are beyond Amaya’s control;

•

The Corporation and its licensees are subject to applicable laws in the jurisdictions in which they operate and future legislative and court decisions may have a material impact on operations and financial results;

•

The Corporation’s Native American tribal customers that operate Class II games under the IGRA are subject to regulation by the NIGC. Any changes in regulations could cause the Corporation to modify its Class II games to comply with the new regulations, which may result in the Corporation’s products becoming less competitive;

•

There are significant barriers to entry to the market for the Corporation’s solutions and if the Corporation is unable to overcome the barriers to entry, it will materially affect its results of operations and future prospects;

•

There is intense competition amongst gaming solution providers. If the Corporation is unable to obtain significant early market presence or it loses market share to its competitors, it will materially affect its results of operations and future prospects;

•

The ability of the Corporation to complete announced acquisitions and divestitures. The risks associated with these acquisitions and divestitures could have a material adverse effect upon the Corporation’s business, financial condition and operating results;

•

The markets for the Corporation’s solutions are characterized by rapidly changing technology, evolving industry standards and increasingly sophisticated customer requirements. The Corporation’s inability to develop solutions that are competitive in technology and price and that meet customer needs could have a material adverse effect on the Corporation’s business, financial condition and results of operations;

•

A significant portion of Amaya’s operations are conducted in foreign jurisdictions. As such, Amaya’s operations may be adversely affected by changes in foreign government policies and legislation or social instability and other factors which are not within the control of Amaya;

•

The Corporation holds patents, trademarks and other intellectual property rights. The Corporation has also applied for patent protection in the United States, Canada and Europe, relating to certain existing and proposed processes, designs and methods. If the Corporation is denied any or all of these patents, it may not be able to successfully prevent its competitors from imitating its solutions or using some or all of the processes that are the subject of such patent applications;

•

The sales cycle for the Corporation’s products and services is variable, typically ranging from between a few weeks to several months and in some cases even longer, from the point of initial contact with a potential customer to the actual completion of a sale. If any events were to occur that affect the timing of the order, the sales of the Corporation’s solutions or services may be cancelled or delayed, which would reduce the Corporation’s revenue;

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•

The Corporation’s solutions are complex and, accordingly, they may contain defects or errors, particularly when first introduced or as new versions are released. Defects and errors in the Corporation’s solutions could materially and adversely affect the Corporation’s reputation, result in significant costs to it, delay planned release dates and impair its ability to sell its products in the future;

•

The Corporation incorporates security features into the design of its gaming machines and other systems which are designed to prevent the Corporation and its customers from being defrauded. If the Corporation’s security systems fail to prevent fraud, the Corporation’s operating results could be adversely affected;

•

A substantial portion of the Corporation’s revenue is earned in U.S. dollars and Euros, but a substantial portion of the Corporation’s operating expenses are incurred in Canadian and U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar, the Euro and other currencies, such as the Canadian dollar, may have a material adverse effect on the Corporation’s business, financial condition and operating results;

•

The Corporation has experienced and expects to continue to experience rapid growth in the Corporation’s headcount and operations, placing significant demands on its operational and financial infrastructure. If the Corporation does not effectively manage its growth, its ability to develop and market its solutions could suffer, which could negatively affect its operating results;

•

Contract awards by lottery authorities are sometimes challenged by unsuccessful bidders, which can result in costly and protracted legal proceedings that can result in delayed implementation or cancellation of the award. Further, there can be no assurance that the current contracts of Amaya will be extended or that Amaya will be awarded new contracts as a result of competitive bidding processes in the future;

•

Some of the Corporation’s licensees rely on Internet service providers to allow the Corporation’s licensees’ customers and servers to communicate with each other. If Internet service providers experience service interruptions, communications over the Internet may be interrupted and impair the Corporation’s ability to carry on business. Further, there can be no assurance that the Internet infrastructure or the Corporation’s own network systems will continue to be able to meet the demand placed on it by the continued growth of the Internet, the overall online gaming industry or of the Corporation’s customers;

•

Any disruption in the Corporation’s network or telecommunications services could affect the Corporation’s ability to operate its games or financial systems, which would result in reduced revenues and customer down time;

•

The Corporation’s ability to make scheduled payments on or to refinance its debt obligations and to make distributions to enable it to service its debt obligations depends on its financial and operating performance. If the Corporation’s cash flows and capital resources are insufficient to fund its debt service obligations, it may be forced to reduce or delay activities and capital expenditures, sell assets, seek additional capital, or restructure or refinance its indebtedness;

•

As a supplier of gaming solutions, the Corporation must continually offer themes and products that appeal to gaming operators and players. The Corporation’s success depends in part on unpredictable and volatile factors that are beyond its control, such as customer preferences, competing games, travel activity and the availability of other entertainment activities;

•

The Corporation is heavily dependent on the gaming industry. A decline in demand for the Corporation’s products in the gaming industry could adversely affect its business;

•

From time to time, Amaya may be subject to litigation claims through the ordinary course of its business operations which could result in substantial costs and diversion of Amaya’s resources. This could cause a material adverse effect on its business, financial condition and results of operations;

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Cautionary Note Regarding Forward Looking Statements

Certain statements contained or incorporated by reference herein constitute forward-looking statements under Canadian securities legislation. These statements relate to future events or the Corporation’s future performance, business prospects or opportunities and product development. All such statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements contained or incorporated by reference herein should not be unduly relied upon. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained or incorporated by reference in this document.

These forward-looking statements involve risks and uncertainties relating to, among other things, the Corporation’s limited operating history, the heavily regulated industry, the significant barriers to entry to the market for the Corporation’s solutions, competition issues, the possibility that the Corporation be unable to complete future acquisitions and integrate those businesses successfully, , the impact of change in regulations or industry standards, international operations and risks of foreign operations. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described in this document as well as the Corporation’s other publicly disclosed documents.

Further Information

Additional information on the Corporation, including the Annual Information Form, may be obtained on SEDAR at www.sedar.com.

Montreal, Quebec

May 15, 2014

(Signed) “Daniel Sebag”

Daniel Sebag, CPA, CA

Chief Financial Officer

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EX-99.30

Exhibit 99.30

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David Baazov, Chief Executive Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended March 31, 2014.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2014 and ended on March 31, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 15, 2014

/s/ David Baazov

David Baazov

Chief Executive Officer

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EX-99.31

Exhibit 99.31

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Daniel Sebag, Chief Financial Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended March 31, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2014 and ended on March 31, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 15, 2014

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

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EX-99.32

Exhibit 99.32

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	Consolidated Financial Statements (Unaudited)			1
TABLE OF CONTENTS		Consolidated Statements of Financial Position		1
		Consolidated Statements of Changes in Equity		2
		Consolidated Statements of Comprehensive Income (Loss)		3

		Consolidated Statements of Cash Flows		4

	Notes to Consolidated Financial Statements			5

		1.	Nature of business	5

		2.	Private Placement	5

		3.	Summary of significant accounting policies	5

		4.	Change In Accounting Policies	20

		5.	Recent Accounting Pronouncements	21

		6.	Cash and cash equivalents	22

		7.	Investment tax credits receivable	22

		8.	Accounts receivable	23

		9.	Inventories	23

		10.	Receivable under finance lease	23

		11.	Assets and liabilities classified as held for sale	24

		12.	Restricted cash	24

		13.	Investments	24

		14.	Goodwill and intangible assets	26

		15.	Property plant and equipment	27

		16.	Income taxes	28

		17.	Credit facility	29

		18.	Accounts payable and accrued liabilities	29

		19.	Provisions	30

		20.	Long-term debt	30

		21.	Equipment Financing	34

		22.	Commitments	34

		23.	Share capital	34

		24.	Contributed surplus	35

		25.	Major customers	37

		26.	Financial instruments	38

		27.	Fair value	40

		28.	Capital Management	40

		29.	Geographic information	41

		30.	Statement of cash-flows	41

		31.	Related party transactions	42

		32.	Contingency	42

		33.	Revenues	42

		34.	Business Combination	43

		35.	Expenses Classified By Nature	44

		36.	Net earnings per share	45

		37.	Sale of WagerLogic Malta Holdings Ltd.	45

		38.	Subsequent Events	46

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Consolidated Financial Statements (Unaudited)

Consolidated Statements of Financial Position


	June 30,			December 31,
	2014			2013
	$			$

ASSETS
Current
Cash and cash equivalents (note 6)		228,021,402			93,640,348
Investment tax credits receivable (note 7)		130,307			111,612
Accounts receivable (note 8)		51,135,515			47,460,201
Income tax receivable		1,170,547			520,482
Inventories (note 9)		9,787,643			7,594,918
Current maturity of receivable under finance lease (note 10)		5,006,271			4,865,300
Prepaid expenses and deposits		7,274,668			4,173,048
Assets classified as held for sale (note 11)		35,799,118			38,368,898

		338,325,471			196,734,807

Restricted cash (note 12)		129,640			130,904
Investments ( note 13)		73,669,785			10,582,448
Goodwill and intangible assets (note 14)		185,315,282			163,037,073
Property and equipment (note 15)		44,305,364			40,520,993
Deferred development costs (net of accumulated amortization of $4,495,263; 2013 - $3,039,134)		5,011,828			3,817,802
Receivable under finance lease (note 10)		8,367,757			10,004,038
Investment tax credit receivable long-term (note 7)		3,255,139			2,672,567
Deferred income taxes (note 16)		20,565,430			13,330,372
Promissory note (note 37)		10,000,000			—

		688,945,696			440,831,004


LIABILITIES
Current
Accounts payable and accrued liabilities (note 18)		35,352,497			27,477,031
Provisions (note 19)		9,373,545			3,684,900
Customer deposits		4,302,559			4,453,213
Income tax payable		1,539,486			1,763,060
Deferred revenue		706,300			—
Current maturity of long-term debt (note 20)		2,769,917			2,387,557
Current maturity of equipment financing (note 21)		1,062,271			1,132,500
Liabilities classified as held for sale (note 11)		3,290,236			4,638,272

		58,396,811			45,536,533

Accounts payable and accrued liabilities (note 18)		520,593			—
Deferred revenue		1,831,060			249,132
Long-term debt (note 20)		366,299,229			192,798,839
Equipment financing (note 21)		419,324			550,639
Provisions (note 19)		1,246,530			1,546,652
Holdback of purchase price (note 34)		7,469,000			—
Deferred income taxes (note 16)		5,343,516			5,802,246

		441,526,063			246,484,041

Commitments (note 22) and contingency (note 32)

SHAREHOLDERS’ EQUITY

Share capital (note 23)		223,389,529			220,683,283
Contributed surplus (note 24)		20,086,942			4,213,957
Accumulated other comprehensive income (loss)		6,582,554			8,837,746
Retained Earnings (Deficit)		(2,639,392	)		(39,388,023	)

		247,419,633			194,346,963

		688,945,696			440,831,004

See accompanying notes

Approved and authorized for issue on behalf of the Board on August 14, 2014


(Signed) “Daniel Sebag”, Director		(Signed) “David Baazov”, Director
Daniel Sebag, CFO		David Baazov, CEO

Consolidated Statements of Changes in Equity

For the six month period ended June 30, 2014


	Number			Share capital Amount $			Contributed Surplus $			Retained Earnings (Deficit) $			Accumulated Other Comprehensive Income $			Total Shareholders’ Equity $
Balance – January 1, 2013		79,359,759			154,771,764			2,351,415			(10,708,331	)		(835,371	)		145,579,477
Deferred income taxes in relation to transaction costs		—			(166,000	)		447,000			—			—			281,000
Issue of equity component of private placement of debt, net of transaction costs		—			—			2,963,024			—			—			2,963,024
Issue of common shares in relation to exercised warrants		329,730			1,111,558			(101,008	)		—			—			1,010,550
Issue of common shares in relation to exercised employee stock options		219,300			392,911			(146,758	)		—			—			246,153
Stock based compensation		—			—			925,400			—			—			925,400
Issue of common shares in relation to conversion of convertible debentures		7,572,912			24,612,000			(493,165	)		493,165			—			24,612,000
Share repurchase		(660,800	)		(3,243,999	)		—			—			—			(3,243,999	)
Net loss		—			—			—			(18,882,411	)		—			(18,882,411	)
Other comprehensive income (loss)		—			—			—			—			10,414,325			10,414,325

Balance – June 30, 2013		86,820,901			177,478,234			5,945,908			(29,097,577	)		9,578,954			163,905,519


Balance – January 1, 2014		94,078,297			220,683,283			4,213,957			(39,388,023	)		8,837,746			194,346,963
Deferred income taxes in relation to transaction costs		—			(236,000	)		180,147			—			—			(55,853	)
Issue of common shares in relation to exercised warrants		409,790			2,189,969			(383,269	)		—			—			1,806,700
Issue of common shares in relation to exercised employee stock options		197,819			752,277			(153,327	)		—			—			598,950
Issue of equity component of mezzanine subordinated unsecured term loan, net of transaction costs		—			—			14,694,736			—			—			14,694,736
Stock based compensation		—			—			1,534,698			—			—			1,534,698
Net Income		—			—			—			36,748,631			—			36,748,631
Other comprehensive income (loss)		—			—			—			—			(2,255,192	)		(2,255,192	)

Balance – June 30, 2014		94,685,906			223,389,529			20,086,942			(2,639,392	)		6,582,554			247,419,633

See accompanying notes

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Consolidated Statements of Comprehensive Income (Loss)


				For the three month period ended June 30,						For the six month period ended June 30,
	2014			2013			2014			2013
	$			$			$			$
Revenues (note 33)		42,451,984			37,254,390			83,654,207			75,307,637

Expenses
Cost of products (note 35)		3,795,573			715,877			5,768,049			834,429
Selling (note 35)		3,392,440			3,590,181			7,540,769			7,291,185
General and administrative (note 35)		39,360,849			33,051,785			78,117,848			67,450,363
Financial (note 35)		8,890,436			7,782,676			9,951,462			13,994,735
Acquisition-related costs (note 35)		6,150,084			22,465			9,803,673			331,944

		61,589,382			45,162,984			111,181,801			89,902,656

Gain (loss) on sale of investments (note 37)		(319,708	)		—			49,053,516			—
Income (loss) from investments		5,800,078			—			6,385,156			—

Earnings (loss) before income taxes		(13,657,028	)		(7,908,594	)		27,911,078			(14,595,019	)
Current income taxes (note 16)		2,834,130			3,032,259			6,937,732			3,722,173
Deferred income taxes (note 16)		(13,596,178	)		500,717			(15,775,285	)		565,219

Net earnings (loss)		(2,894,980	)		(11,441,570	)		36,748,631			(18,882,411	)

Other Comprehensive Income (loss), net of tax
Foreign currency translation gain (loss)		(4,616,186	)		7,634,750			(2,255,192	)		10,414,325

		(4,616,186	)		7,634,750			(2,255,192	)		10,414,325

Total Comprehensive Income (loss)		(7,511,166	)		(3,806,820	)		34,493,439			(8,468,086	)

Basic earnings (loss) per common share (note 36)	$	(0.03	)	$	(0.13	)	$	0.39		$	(0.22	)

Diluted earnings (loss) per common share (note 36)	$	(0.03	)	$	(0.13	)	$	0.37		$	(0.22	)

See accompanying notes

Consolidated Statements of Cash Flows


				For the three month period ended June 30,						For the six month period ended June 30,
	2014 $			2013 $			2014 $			2013 $

Operating activities
Net earnings (loss)		(2,894,980	)		(11,441,570	)		36,748,631			(18,882,411	)
Interest accretion on convertible debentures		—			—			—			1,493,146
Interest accretion on long term debt		1,006,802			788,817			1,449,902			1,418,278
Paid in kind interest		981,026			—			981,026			—
Loss on sale of property and equipment		80,456			178,677			298,720			186,431
Gain on sale of intangibles		(824	)		280			—			37,533
Sale of previously leased gaming machines		90,872			—			530,504			—
Sale of previously leased third party licenses		—			—			61,580			—
Write off of licenses and software		—			—			6,271			—
Unrealised loss (gain) on foreign exchange		1,439,812			(1,743,963	)		(822,621	)		(1,193,186	)
Depreciation of property and equipment		3,863,671			3,120,115			7,530,014			6,515,125
Amortization of intangible assets		5,623,439			4,317,904			11,026,157			8,443,155
Amortization of deferred development costs		745,955			287,806			1,456,128			419,288
Transfer of inventory to property and equipment		—			(1,072	)		—			(145,187	)
Deferred income taxes		(13,596,178	)		500,717			(15,775,285	)		565,219
Stock-based compensation		781,135			493,778			1,534,698			925,400
Finance lease		1,819,076			639,985			1,475,059			1,446,894
Gain on sale of investments (note 37)		319,708			—			(49,053,516	)		—
Accrued transaction costs		—			(468	)		—			(63,334	)

		259,970			(2,858,994	)		(2,552,732	)		1,166,351
Changes in non-cash operating elements of working capital (note 30)		(3,757,545	)		(10,773,186	)		(1,473,477	)		(7,317,076	)

		(3,497,575	)		(13,632,180	)		(4,026,209	)		(6,150,725	)


Financing activities
Proceeds from long term debt		192,302,169			—			192,302,169			28,552,971
Issuance of capital stock in relation with exercised warrants		1,776,700			616,800			1,806,700			1,010,550
Issuance of capital stock in relation with exercised employee stock options		254,791			133,118			598,950			246,153
Repurchase of shares		—			—			—			(3,243,999	)
Transaction costs related to the issuance of long term debt		—			—			—			(384,206	)
Repayment of long-term debt		(634,707	)		(1,633,383	)		(1,361,104	)		(3,275,495	)

		193,698,953			(883,465	)		193,346,715			22,905,974


Investing activities
Deferred development costs		(2,338,140	)		(1,915,699	)		(4,237,896	)		(4,241,521	)
Additions to property and equipment		(4,490,221	)		(4,314,466	)		(6,955,677	)		(7,679,748	)
Acquired intangible assets		(2,411,735	)		(4,277,823	)		(4,888,250	)		(7,058,779	)
Proceeds from sale of license and software		—			44,534			—			43,808
Proceeds from sale of property and equipment		57,705			203,322			57,705			286,201
Purchase of investments		(50,077	)		—			(2,260,836	)		—
Proceeds from sale of investments (note 37)		—			—			52,500,000			—
Unrealized gain on marketable securities		(5,848,000	)		—			(6,532,000	)		—
Minimum revenue guarantee		(2,170,030	)		—			(2,170,030	)		—
Deposit on Rational Group acquisition		(54,294,500	)		—			(54,294,500	)		—
Investment in subsidiaries		(858,602	)		—			(19,847,008	)		—

		(72,403,600	)		(10,260,132	)		(48,628,492	)		(18,650,039	)

Increase (Decrease) in cash and cash equivalents		117,797,778			(24,775,777	)		140,692,014			(1,894,790	)
Cash and cash equivalents – beginning of period		119,270,575			54,015,971			93,640,348			31,327,745
Unrealized foreign exchange difference in cash and cash equivalents		(9,046,951	)		6,856,763			(6,310,960	)		6,664,002

Cash and cash equivalents – end of period		228,021,402			36,096,957			228,021,402			36,096,957

See accompanying notes

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Notes to Consolidated Financial Statements

1. Nature of business

Founded in 2004, Amaya Gaming Group Inc. (“Amaya” or “Corporation”) is engaged in the design, development, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide. Amaya’s objective is to become a leading provider of technology-based gaming solutions while maintaining a steadfast commitment to the highest levels of integrity and responsibility. Amaya provides products, services and systems to land-based and online gaming operators, government bodies and the hospitality industry. Amaya has one reportable segment, Diversified Gaming Solutions, which in the second quarter ended June 30, 2014 consisted primarily of the following categories of solutions and services: interactive gaming solutions, land-based gaming solutions, and lottery solutions. Amaya’s solutions are designed to provide end users with popular, engaging and cutting-edge content across multiple formats and through a secure technology environment, and thereby improve the profitability, productivity, security and brand of the operator. Amaya has developed its portfolio of solutions through both internal development and strategic acquisitions. Amaya acquired Chartwell Technology Inc. (“Chartwell”) in July 2011, CryptoLogic Ltd. (“CryptoLogic”) in April 2012, Ongame Network Ltd. (“Ongame”) in November 2012, Cadillac Jack Inc. (“Cadillac Jack”) in November 2012, and Diamond Game Enterprises (“Diamond Game”) in February, 2014, all of which provide technology, content and services to a diversified base of customers in the regulated gaming industry.

Throughout its history, Amaya has continually strived to improve its offering of solutions and services to address both the markets it serves as well as new domestic and international opportunities.

2. Private Placement

3. Summary of significant accounting policies

BASIS OF PRESENTATION

These consolidated financial statements were prepared on a going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. A wholly owned subsidiary is an entity over which the Corporation has control, where control is defined as the power to govern financial and operating policies. On consolidation, all significant inter-entity transactions and balances have been eliminated. As at June 30, 2014, the consolidated financial statements included 58 wholly owned subsidiaries.

ASSOCIATES

NON-CURRENT ASSETS HELD FOR SALE

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REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Participation leases and arrangements

Software Licensing

Hosted Casino

Revenues from Hosted Casino are recognized as the services are performed, on a daily basis, at the time of the gambling transactions.

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Transactions and balances

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

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The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling
MXN		Mexican Peso
SEK		Swedish Krona

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

OPERATING SEGMENTS

Currently the Corporation has only one operating segment, Diversified Gaming Solutions. The Corporation’s operating segment is organized around the markets it serves and is reported in a manner consistent with the internal reporting provided to the Chairman and Chief Executive Officer, the Corporation’s chief operating decision-maker. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Corporation.

FINANCIAL INSTRUMENTS

Financial assets

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). No financial assets are classified as fair value through profit or loss.

Available-for-sale

Held-to-maturity and loans and receivables

Impairment

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

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Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

PROPERTY AND EQUIPMENT


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%

INTANGIBLE ASSETS


Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease

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ACQUISITION-RELATED INTANGIBLES


Software Technology	Straight-line	5 years
Customer Relationships	Straight-line	15 years

GOODWILL

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

TAXATION

Current tax

Deferred tax

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STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity-settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

LEASES

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 19). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.84 million CAD), of which (i) €0.67 million ($0.98 million CAD) is recorded in Provisions (see note 19); and (ii) €3.33 million ($4.86 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($10.67 million CAD), of which (i) USD$3.64 million ($3.88 million CAD) is recorded in Provisions (see note 19); (ii) USD $4.39 million ($4.68 million CAD) is recorded in accounts payable and accrued liabilities; and (iii) USD $1.97 million ($2.11 million CAD) was paid.

ROYALTIES

The Corporation licenses various royalty rights from several owners of intellectual property rights. These rights are used to produce games for use in Hosted Casino and Branded Games. Generally, the arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight-line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense.

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

LOGO

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at June 30, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post-tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at June 30, 2014, was 12.00%. As at June 30, 2014, there was no need for impairment.

Impairment of other long-lived assets

The key assumptions utilized in the determination of future cash flows represent Management’s best estimate of the range of economic conditions relating to the CGU, and are based on historical experience, economic trends, and communications with other key stakeholders of the Corporation. These key assumptions include the revenue growth rate, EBITDA¹ margin as a percentage of revenues, capital expenditures as a percentage of revenues, and the inflation growth rate. Significant changes in the key assumptions utilized in the determination of future cash flows could result in an impairment charge or reversal of an impairment loss. As at June 30, 2014 and June 30, 2013, there was no need for an impairment charge.

Stock-based compensation and warrants

Inventory write-down

Research and development investment tax credits

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

LOGO

The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period. As at June 30, 2014 a valuation allowance of $5,070,481 (2013 – $4,314,532) was recorded.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.84 million CAD), of which (i) €0.67 million ($0.98 million CAD) is recorded in Provisions (see note 19); and (ii) €3.33 million ($4.86 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($10.67 million CAD), of which (i) USD$3.64 million ($3.88 million CAD) is recorded in Provisions (see note 19); (ii) USD $4.39 million ($4.68 million CAD) is recorded in accounts payable and accrued liabilities; and (iii) USD $1.97 million ($2.11 million CAD) was paid.

JUDGMENTS

Finance leases

Deferred Development Costs

Estimated useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

4. Change In Accounting Policies

Interests in Other Entities

The Corporation have adopted the following five standards applying to interests in other entities as at January 1, 2013:

IFRS 10, Consolidated Financial Statements;

IFRS 11, Joint Arrangements;

IFRS 12, Disclosure of Interests in Other Entities;

IAS 27, Separate Financial Statements (as amended in 2011); and

IAS 28, Investments in Associates and Joint Ventures (as amended in 2011).

IFRS 13, Fair Value Measurement

IFRS 13 defined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity-specific measurement, so assumptions that market participants would use should be applied in measuring fair value.

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IAS 1, Presentation of Financial Statements

5. Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

6. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include the following:


	June 30, 2014 $		December 31, 2013 $
Cash in bank		228,021,402		93,640,348

		228,021,402		93,640,348

As at June 30, 2014, an amount of $4,302,559 is reserved to settle customer deposits.

7. Investment tax credits receivable


	June 30, 2014 $		December 31, 2013 $
Research and development investment tax credits
2009		1,362,643		1,362,643
2010		128,409		128,409
2011		339,527		217,129
2012		651,083		159,877
2013		575,710		916,121
2014		328,074		—

		3,385,446		2,784,179

Investment tax credit receivable		130,307		111,612

Investment tax credit receivable long-term		3,255,139		2,672,567

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8. Accounts receivable

The Corporation’s accounts receivable include the following:


	June 30, 2014				December 31, 2013
	Amount		CAD equivalent		Amount		CAD equivalent
CAD		1,282,094		1,282,094		350,189		350,189
USD		35,925,112		38,337,127		32,969,218		35,122,599
EUR		3,452,200		5,028,472		4,214,276		6,184,195
GBP		941,841		1,713,094		603,607		1,061,598
MXN		43,443,129		3,573,595		49,156,015		3,895,249
SEK		6,104,730		966,646		3,718,979		626,784
OTHER				234,487				219,587

				51,135,515				47,460,201

9. Inventories


	June 30, 2014 $		December 31, 2013 $
Raw materials		6,725,003		6,416,215
Finished goods		3,062,640		1,178,703

		9,787,643		7,594,918

The cost of inventory recognized as an expense during the six month period ended June 30, 2014 was approximately $5,768,000(2013 – $834,000). The amount of inventory write-downs recognized as an expense in the cost of products for the same period was $nil (2013 – $nil). In 2014 and 2013 there were no reversals of write-downs from the previous years.

10. Receivable under finance lease

The Corporation’s receivable under finance lease includes the following:


	June 30, 2014 $			December 31, 2013 $
Total minimum lease payments receivable		16,853,796			18,604,586
Unearned finance income		(3,479,768	)		(3,735,248	)

		13,374,028			14,869,338
Current maturity of receivable under finance lease		5,006,271			4,865,300

		8,367,757			10,004,038

Finance income recognized in revenue for the six month period ended June 30, 2014 amounted to $373,674 (2013 – $320,872).

The present value of minimum lease payments receivable, unearned finance income and future minimum lease payments receivable under the finance leases are as follows:


	Present Value of Minimum Lease Payments Receivable $		Unearned Finance Income $		Future Minimum Lease Payments Receivable $
2015		5,006,271		1,011,055		6,017,326
2016		4,433,507		1,124,771		5,558,278
2017		3,273,576		1,057,120		4,330,696
2018		660,674		286,822		947,496

		13,374,028		3,479,768		16,853,796

11. Assets and liabilities classified as held for sale

The following is a summary of assets and liabilities classified as held for sale at June 30, 2014, in connection with certain proprietary trademarks and other intellectual property.


	Total
Goodwill and intangible assets		28,235,749
Deferred development costs		7,563,369

Assets classified as held for sale		35,799,118


	Total
Deferred tax liability		3,290,236

Liabilities classified as held for sale		3,290,236

12. Restricted cash

An amount of $129,640 (2013 –$130,904) is being held by the Courts of Malta pending the outcome of two separate lawsuits filed by one former client (see note 32).

13. Investments

(a) Investments in quoted instruments

During the six month period ended June 30, 2014, the Corporation acquired 550,000 additional common shares of The Intertain Group Limited for a total cost of $2.2 million. An unrealized gain was recorded on the appreciation of the common share value of the investment ($6.83 CAD on June 30, 2014)


	June 30, 2014 $
At December 31, 2013		9,250,000
Purchase of common stock		2,200,000
Unrealized gain on investment		6,532,000

Balance at June 30, 2014		17,982,000

LOGO

(b) Investments in Associates


	June 30, 2014 $
At December 31, 2013		1,332,448
Share of profit (loss)		(146,844	)
Contribution during the period		207,681

Balance at June 30, 2014		1,393,285

On December 27, 2013, the Corporation acquired a 49% interest in Les Studios Side City Inc., a Canadian corporation operating in Montreal, Quebec as a game development studio. The equity method of accounting is used in measuring this investment. The summarised financial information of the investment as at June 30, 2014 is detailed below and is based on the associate’s financial statements prepared in accordance with IFRS.


Les Studios Side City Inc.
Current Assets	730,750
Non-Current Assets	191,855
Current Liabilities	188,832
Non-Current Liabilities	1,132,729
Net Assets of Associate	(398,957	)
Ownership Interest in Associate	49	%
Revenue	165,811
Profit	(299,682	)
Total Comprehensive Income for the year	(299,682	)

On June 12, 2014, the Corporation made a deposit of $54.30 million ($50.00 million USD) to the holders of Oldford Group securities.

(d) Subsidiaries

The composition of the Corporation at the end of the reporting period was as follows.


Region of incorporation and operation	Number of wholly-owned subsidiaries
	2014		2013
North America		17		14
Europe		32		32
Latin America & Caribbean		5		5
Other		4		4

		58		55

14. Goodwill and intangible assets

COST


	Software $			Licenses $			Placement fee $			Acquisition- Related Intangibles $			Goodwill $			Total $
Balance – January 1, 2013		3,038,777			6,520,715			—			84,179,530			93,964,475			187,703,497
Additions		7,663,347			5,535,738			5,536,742			—			—			18,735,827
Disposals		(59,934	)		(73,759	)		—			—			—			(133,693	)
Reclassifications		16,018			9,417			—			—			—			25,435
Reclassification to held for sale		(799,815	)		(209,398	)		—			(10,826,452	)		(21,246,316	)		(33,081,981	)
Translation		404,476			262,944			181,166			6,226,433			7,256,694			14,331,713

Balance – December 31, 2013		10,262,869			12,045,657			5,717,908			79,579,511			79,974,853			187,580,798

Additions		2,237,633			2,650,617			—			—			—			4,888,250
Additions through business combination		—			—			—			12,709,116			16,128,349			28,837,465
Disposals		(70,480	)		(34,824	)		(39,485	)		—			—			(144,789	)
Reclassification to held for sale		(290,170	)		—			—			—			—			(290,170	)
Translation		(61,904	)		(20,816	)		19,348			(164,766	)		(187,031	)		(415,169	)

Balance – June 30, 2014		12,077,948			14,640,634			5,697,771			92,123,861			95,916,171			220,456,385

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Software $			Licenses $			Placement fee $			Acquisition- Related Intangibles $			Goodwill $		Total $
Balance – January 1, 2013		495,433			2,184,014			—			4,291,335			—		6,970,782
Amortization		1,713,160			2,043,986			646,262			14,957,376			—		19,360,784
Disposals		—			(8,674	)		—			—			—		(8,674	)
Reclassifications		201,925			(25,134	)		—			—			—		176,791
Reclassification to held for sale		(380,794	)		(78,279	)		—			(2,205,441	)		—		(2,664,514	)
Translation		179,157			45,362			21,147			462,890			—		708,556

Balance – December 31, 2013		2,208,881			4,161,275			667,409			17,506,160			—		24,543,725

Amortization		1,396,289			1,180,307			590,627			7,858,934			—		11,026,157
Disposals		(70,480	)		2,994			(9,871	)		—			—		(77,357	)
Reclassification to held for sale		(319,483	)		—			—			—			—		(319,483	)
Translation		(45,560	)		(18,096	)		(13,647	)		45,364			—		(31,939	)

Balance – June 30, 2014		3,169,647			5,326,480			1,234,518			25,410,458			—		35,141,103

CARRYING AMOUNT

Software
$

Licenses
$

Placement
fee
$

Acquisition-
Related
Intangibles
$

Goodwill
$

Total
$

At December 31, 2013

8,053,988

7,884,382

5,050,499

62,073,351

79,974,853

163,037,073

At June 30, 2014

8,908,301

9,314,154

4,463,253

66,713,403

95,916,171

185,315,282

LOGO

15. Property plant and equipment

COST


	Revenue- Producing Assets $			Machinery and Equipment $			Furniture and Fixtures $			Computer Equipment $			Total $
Balance – January 1, 2013		29,376,126			3,332,319			3,194,662			6,782,952			42,686,059
Additions		14,202,995			50,842			706,949			2,469,645			17,430,431
Transfers to inventory		(2,104,057	)		—			—			—			(2,104,057	)
Disposals		(1,177,399	)		(17,096	)		(139,887	)		(234,622	)		(1,569,004	)
Reclassifications		2,459,037			(2,378,361	)		—			—			80,676
Translation		1,630,909			85,686			262,740			300,222			2,279,557

Balance – December 31, 2013		44,387,611			1,073,390			4,024,464			9,318,197			58,803,662

Additions		5,662,346			—			98,916			1,194,415			6,955,677
Transfers to inventory		(1,383,443	)		—			—			—			(1,383,443	)
Additions through business combination		5,382,873			104,448			67,682			878,031			6,433,034
Disposals		(1,756,117	)		—			(266,499	)		(727,882	)		(2,750,498	)
Reclassifications		9,960			—			(13,380	)		3,420			—
Translation		452,993			(3,145	)		(11,629	)		(327,091	)		111,128

Balance – June 30, 2014		52,756,223			1,174,693			3,899,554			10,339,090			68,169,560

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Revenue- Producing Assets $			Machinery and Equipment $			Furniture and Fixtures $			Computer Equipment $			Total $
Balance – January 1, 2013		3,605,594			488,004			700,394			1,217,717			6,011,709
Depreciation		9,793,903			137,332			947,675			1,854,941			12,733,851
Transfers to inventory		(662,624	)		—			—			—			(662,624	)
Disposals		(280,893	)		(2,828	)		(83,419	)		—			(367,140	)
Reclassifications		199,181			(118,505	)		—			—			80,676
Impairment		361,320			—			—			—			361,320
Translation		51,380			4,884			84,426			(15,813	)		124,877

Balance – December 31, 2013		13,067,861			508,887			1,649,076			3,056,845			18,282,669

Depreciation		6,130,186			69,751			293,629			1,036,448			7,530,014
Transfers to inventory		(169,472	)		—			—			—			(169,472	)
Disposals		(1,224,437	)		—			(266,499	)		(372,635	)		(1,863,571	)
Reclassification		7,359			—			(7,359	)		—			—
Translation		351,012			(765	)		(6,865	)		(258,826	)		84,556

Balance – June 30, 2014		18,162,509			577,873			1,661,982			3,461,832			23,864,196

CARRYING AMOUNT

Revenue-
Producing
Assets
$

Machinery
and
Equipment
$

Furniture
and
Fixtures
$

Computer
Equipment
$

Total
$

At December 31, 2013

31,319,750

564,503

2,375,388

6,261,352

40,520,993

At June 30, 2014

34,593,714

596,820

2,237,572

6,877,258

44,305,364

As at June 30, 2014, the Corporation did not record any impairment of idle gaming equipment (2013 - $nil).

16. Income taxes

Income taxes reported differ from the amount computed by applying the statutory rates to incomes (loss) before income taxes. The reasons are as follows:


	June 30, 2014 $			June 30, 2013 $
Statutory income taxes		7,508,000			(3,948,000	)
Non-taxable income		(31,020,000	)		(883,000	)
Non-deductible expenses		3,944,000			2,185,000
Differences in effective income tax rates in foreign jurisdictions		7,475,000			3,909,000
Non-capital losses utilized for which a deferred tax has been recorded		—			722,000
Non-capital losses for which no tax benefit has been recorded		3,603,000			1,931,000
Non-capital losses for which a tax benefit has been recorded		(348,000	)		371,000

Current and deferred income taxes		(8,838,000	)		4,287,000

Significant components of the Corporation’s deferred income tax balance at June 30, 2014 were as follows:


	Deferred development costs $			Property & Equipment $			Share & Debt issuance costs $			Finance Lease $			Intangibles $			Tax Losses $			Investment tax credits $			Foreign tax credits $			Other $			Total $
At January 1, 2013		351,000			4,442,000			1,247,000			(4,024,000	)		(19,956,000	)		14,102,000			(1,000	)		10,772,000			352,000			7,285,000
Charged / (credited) to the income statement		(1,407,000	)		(1,827,000	)		(708,000	)		247,000			3,803,000			(2,437,000	)		—			2,882,000			—			553,000

Charged / (credited)directly to balance sheet		—			—			—			(2,322,000	)		—			(2,792,000	)		—			—			986,000			(4,128,000	)

Charged / (credited) to other comprehensive income		(77,000	)		55,000			2,000			49,000			(1,528,000	)		363,000			—			850,000			91,000			(195,000	)

Charged / (credited)directly to equity		—			—			710,000			—			—			160,000			—			—			—			870,000

Reclassification to asset held for sale		1,522,000			—			—			—			1,621,000			—			—			—			—			3,143,000

Reclassification		—			(1,327,000	)		16,000			3,850,000			(2,172,000	)		(1,258,000	)		1,000			(145,000	)		1,035,000			—

At December 31, 2013		389,000			1,343,000			1,267,000			(2,200,000	)		(18,232,000	)		8,138,000			—			14,359,000			2,464,000			7,528,000

Charged / (credited) to the income statement		(200,000	)		857,000			291,000			623,000			10,912,000			2,360,000			—			993,000			(60,000	)		15,776,000
Charged / (credited)directly to balance sheet		—			—			—			(1,284,000	)		—			(3,202,000	)		—			—			(279,000	)		(4,765,000	)
Charged / (credited) to other comprehensive income		—			(27,000	)		(3,000	)		40,000			(207,000	)		81,000			—			19,000			17,000			(80,000	)

Charged / (credited)directly to equity		—			—			(223,000	)		—			—			—			—			—			—			(223,000	)
Reclassification to asset held for sale		175,000			—			—			—			—			—			—			—			—			175,000
Acquisition of subsidiary		—			(160,000	)		—			—			(3,177,000	)		148,000			—			—			—			(3,189,000	)

At June 30, 2014		364,000			2,013,000			1,332,000			(2,821,000	)		(10,704,000	)		7,525,000			—			15,371,000			2,142,000			15,222,000

As at June 30, 2014, the Corporation had Federal and Provincial non-capital losses of approximately $28,175,000 and $27,637,000 respectively (December 31, 2013 – $25,879,000; $19,549,000) that may be applied against earnings of future years, not later than 2032. The Corporation’s foreign subsidiaries have non-capital losses of approximately $45,459,000 (December 31, 2013 - $50,897,000) that may be applied against earnings in future years, no later than 2017. The possible income tax benefit of $20,968,000 (December 31, 2013 – $29,752,000) of the non-capital losses has been recognized in the accounts.

LOGO

As at June 30, 2014, the Corporation had undeducted research and development expenses of approximately $2,321,000 federally and $4,039,000 provincially (December 31, 2013 – $2,216,000; $3,925,000) with no expiration date. The deferred income tax benefits of these deductions are recognized in the accounts.

17. Credit facility

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. The revolving demand credit facility can be used for general working capital purposes. The facility bears interest at the bank’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances (June 30, 2014 - $nil), the Corporation has provided the Bank a first ranking security interest over all of the movable/personal property of the Corporation.

As at June 30, 2014, the outstanding amount of the revolving demand credit facility is $nil (December 31, 2013- $nil).

Under the terms of the credit facility arrangement with the Bank, the Corporation is required amongst other conditions, to maintain at all times certain ratios and a minimum level of net worth. As at June 30, 2014 and December 31, 2013, the Corporation was not in breach of the terms of the credit facility agreement.

18. Accounts payable and accrued liabilities

The Corporation’s accounts payable include the following:


	June 30, 2014				December 31, 2013
	Amount		CAD equivalent		Amount		CAD equivalent
CURRENT
CAD		5,556,238		5,556,238		3,116,069		3,116,069
USD		17,744,284		18,933,703		12,365,338		13,149,841
EURO		1,944,109		2,831,896		1,734,562		2,545,596
GBP		1,262,349		2,300,653		744,064		1,309,633
SEK		26,411,963		4,182,504		32,662,449		5,504,814
MXN		18,668,499		1,535,656		22,442,972		1,824,349
OTHER				11,847				26,729

TOTAL CURRENT				35,352,497				27,477,031

LONG-TERM
USD		487,903		520,593		—		—

TOTAL				35,873,090				27,477,031

19. Provisions


	June 30, 2014			December 31, 2013
Opening balance		5,231,552			12,799,977
Additional provision for jackpots		2,543,786			2,269,513
Revenue guarantee		10,670,000			—
Contingent consideration in connection with Ongame acquisition		—			(4,874,791	)
Revenue guarantee utilized		(6,790,115	)		—
Jackpot provision amounts utilised		(468,452	)		(6,095,732	)
Reclassification		(579,725	)		—
Translation		13,029			1,132,585

Ending balance		10,620,075			5,231,552
Short-term portion		(9,373,545	)		(3,684,900	)

Long-term portion		1,246,530			1,546,652

20. Long-term debt

The following is a summary of long-term debt outstanding at June 30, 2014 and December 31, 2013:


	June 30, 2014 $		December 31, 2013 $
Current maturity		2,769,917		2,387,557
Long-term debt		366,299,229		192,798,839

		369,069,146		195,186,396

(a) Subordinated Debt

Under the terms of the subordinated debt agreement with the lender, the Corporation is required, amongst other conditions, to maintain at all times certain ratios. As at June 30, 2014, the Corporation was not in breach of the terms of the subordinated debt agreement.

LOGO

The Corporation fully repaid to the subordinated debt during the period ended June 30, 2014.

During the six month period ended June 30, 2014, the Corporation incurred $9,781 (2013 – $23,301) in interest.


	June 30, 2014 $		December 31, 2013 $
Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		—		275,000
Current maturity		—		(275,000	)

		—		—

(b) Non-convertible subordinated debentures

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.

During the six month period ended June 30, 2014, the Corporation incurred $2,189,421 (2013 – 1,353,371) in interest.


	June 30, 2014 $
Fair Value of Liability component		26,844,352
Fair Value of Equity component		3,155,648
Face Value		30,000,000

Transaction costs		1,831,234

The following table reflects movements recognized during the six month period ended June 30, 2014.


	Face value		Liability component		Equity component
Opening balance (net of transaction costs)		30,000,000		25,205,742		2,963,024
Accretion of liability component (effective interest of 13.60%)		—		2,190,480		—

Balance at June 30, 2014		30,000,000		27,396,222		2,963,024

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$
2015		—
2016		30,000,000

On December 20, 2013 Cadillac Jack entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack has access to term loans in an aggregate principal amount of up to USD$160 million (the “Credit Facilities”). The Credit Facilities replaced the existing USD$110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya, as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and to be used to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. On May 15, 2014, Cadillac Jack obtained an incremental USD$80 million term loan to Cadillac Jack’s existing USD$160 million senior term loan for the purpose of financing working capital expenses and general corporate purposes of the Amaya group. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”). The Senior Facility will mature over a 5-year term from the closing date and is secured by the assets of Cadillac Jack and its subsidiaries. The Senior Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios for which the Corporation was in compliance with as of June 30, 2014.

During the six month period ended June 30, 2014, the Corporation incurred $8,450,271 (2013 - nil) in interest.


	June 30, 2014 $			December 31, 2013 $
Principal		255,226,400			170,176,000
Transaction costs		(4,385,832	)		(1,947,209	)
Accretion (effective interest rate of 9.90%)		264,951			12,558
Translation		111,964			(63,305	)
Current maturity		(2,560,800	)		(1,701,760	)

		248,656,683			166,476,284

Term loan principal repayments over the next five years amount to the following:


	$
2015		2,560,800
2016		2,560,800
2017		2,560,800
2018		2,560,800
2019		244,983,200

LOGO

(d) Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

The Corporation fully repaid the other long-term debt during the six months ended June 30, 2014.

During the six month period ended June 30, 2014, the Corporation incurred $9,488 (2013 – $19,595) in interest.


	June 30, 2014 $			December 31, 2013 $
Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		209,117			410,797
Current maturity		(209,117	)		(410,797	)

		—			—

(e) Mezzanine subordinated unsecured term loan

On May 15, Cadillac Jack obtained mezzanine debt (the “Mezzanine Facility”) in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash. The Mezzanine Facility will mature over a 6-year term from the closing date and is unsecured. Amaya has provided an unsecured guarantee of the obligations under the Mezzanine Facility of Cadillac Jack in favour of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios which the Corporation was in compliance with as of June 30, 2014. The Corporation has agreed to grant the lenders, in relation to the Mezzanine Facility, 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD$19.17 at any time up to a period ending 10 years after the closing date (see note 24).

During the six month period ended June 30, 2014, the Corporation incurred $1,821,907 (2013 - nil) in interest.


	June 30, 2014 $
Fair Value of Liability component		91,604,231
Fair Value of Equity component		15,095,769
Face Value		106,700,000

Transaction costs		2,834,584

The following table reflects movements recognized during the six month period ended June 30, 2014.


	Face value		Liability component			Equity component
Opening balance (net of transaction costs)		106,700,000		89,170,680			14,694,736
Paid In Kind Interest		—		981,027			—
Accretion of liability component (effective interest of 16.16%)		—		121,271			—
Translation		—		(26,654	)		—

Balance at June 30, 2014		106,700,000		90,246,324			14,694,736

21. Equipment Financing

During the six month period ended June 30, 2014, the Corporation incurred $49,534 (2013 – $75,636) in interest.


	June 30, 2014 $			December 31, 2013 $
Agreements bear interest at between 1.11% and 8.54% per annum, all maturing by 2018 and payable in monthly instalments of $121,745 including interest		1,481,595			1,683,139
Current maturity		(1,062,271	)		(1,132,500	)

		419,324			550,639

Principal repayments over the next four years amount to the following:


	$
2015		1,062,271
2016		279,181
2017		84,517
2018		55,626

		1,481,595

22. Commitments

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $22,800,000.


	$
Within one year		11,757,000
Later than one year but not later than 5 years		10,957,000
More than 5 years		86,000

23. Share capital

During the six month period ended June 30, 2014:

•

the Corporation issued 409,790 common shares for cash consideration of $1,806,700 as a result of the exercise of warrants. Initially the 409,790 warrants were valued at $383,269 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 197,819 common shares for cash consideration of $598,950 as a result of the exercise of stock options. Initially the 197,819 stock options were valued at $153,327 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to contributed surplus was reallocated to the common shares.

LOGO

During the year ended December 31, 2013:

•

the Corporation issued 7,572,912 common shares in relation to conversion of convertible debentures at the conversion price of $3.25.

•

the Corporation purchased 660,800 common shares for cancellation for $3,243,999. On the cancellation of common shares, $1,880,355 was allocated to contributed surplus.

•

the Corporation completed a private placement offering of 6,400,000 common shares at a price of $6.25 per common share for aggregate gross proceeds of $40,000,000 (see note 2).

24. Contributed surplus

STOCK OPTIONS

The aggregate number of common shares of the Corporation reserved for issuance on the exercise of all stock options granted under the Plan at any time cannot exceed 10% of the issued and outstanding common shares of the Corporation at any such time. The exercise price of the share options shall not be less than the discounted market price of the common shares of the Corporation on the TSX. The options have a maximum term of five years. Options issued from 2012 onwards vest in equal increments over four years. Options issued in prior years vested in equal increments over two years.

The following table provides information about outstanding stock options at June 30, 2014:


	For the six month period ended June 30, 2014					For the year ended December 31, 2013
	Number of options			Weighted average exercise price $		Number of options			Weighted average exercise price $
Beginning balance		5,124,379			3.75		5,447,800			3.00
Transactions during the period:
Issued		742,500			8.04		997,500			6.39
Exercised		(197,819	)		3.03		(932,696	)		1.93
Expired / forfeited		(176,579	)		5.18		(388,225	)		4.32

Ending balance		5,492,481			4.31		5,124,379			3.75

During the six month period ended June 30, 2014, the Corporation granted 742,500 stock options to employees to purchase common shares.

The stock options are exercisable at prices ranging from $1.00 to $8.43 per share and have a weighted average contractual term of 3.01 years.


			Outstanding options				Exercisable options
Exercise prices $	Number of options		Weighted average outstanding maturity period (years)		Number of options		Exercise price $
1.00		1,075,600		1.05		1,075,600		1.00
1.30		50,000		1.20		50,000		1.30
2.16		20,750		2.24		20,750		2.16
2.50		75,000		1.55		75,000		2.50
2.60		65,000		1.50		65,000		2.60
2.63		10,000		1.65		10,000		2.63
2.71		65,000		2.01		65,000		2.71
2.85		160,000		2.04		160,000		2.85
3.38		40,000		1.91		40,000		3.38
4.20		1,066,875		3.03		333,844		4.20
4.24		1,173,506		3.42		293,377		4.24
4.35		78,750		3.43		19,688		4.35
4.90		17,500		3.53		4,375		4.90
6.00		12,500		3.92		3,125		6.00
6.05		582,500		4.04		—		6.05
6.33		30,000		4.21		—		6.33
7.55		227,000		4.47		—		7.55
7.95		600,000		4.51		150,000		7.95
8.43		142,500		4.66		—		8.43

		5,492,481		3.01		2,365,759		2.66

The weighted-average share price of options exercised during the six month period ended June 30, 2014 was $3.03 (2013 – $1.93).

The Corporation recorded a compensation expense of $1,534,698 for the six month period ended June 30, 2014 (2013 – $925,400). The Corporation has $3,843,780 of stock option expense to be recorded in future periods.

The stock options issued during the period ended June 30, 2014 were accounted for at their fair value of $2,251,762, as determined by the Black-Scholes valuation model using the following weighted-average assumptions:


	2014			2013
Expected volatility		60	%		60	%
Expected life		3.75 years			3.75 years
Expected forfeiture rate		17	%		17	%
Risk-free interest rate		1.07	%		1.07	%
Dividend yield		Nil			Nil
Weighted average share price	$	8.04		$	6.38
Weighted average fair value of options at grant date	$	3.03		$	1.93

LOGO

WARRANTS

A summary of the activity in the Corporation’s issued warrants during the year is presented below:

The following table provides information about outstanding warrants at June 30, 2014:


	For the six month period ended June 30, 2014					For the year ended December 31, 2013
	Number of warrants			Weighted average exercise price $		Number of warrants			Weighted average exercise price $
Beginning balance		2,594,270			4.62		1,628,000			3.01
Transactions during the period:
Issued		4,000,000			19.17		1,440,000			6.25
Exercised		(409,790	)		4.41		(473,730	)		4.03
Expired		—			—		—			—

Ending balance		6,184,480			14.05		2,594,270			4.62


Grant date	Expiry date		Number of warrants		Exercise price
27-Mar-12		30-Apr-15		1,066,600		3.00
07-Feb-13		31-Jan-16		1,117,880		6.25
15-May-14		15-May-24		4,000,000		19.17

				6,184,480		14.05

During the six month period ended June 30, 2014, the Corporation received $1,806,700 for the exercise of 409,790 warrants. On the exercise of 409,790 warrants, the value of $383,269 originally allocated to contributed surplus was reallocated to the share capital.

During the six month period ended June 30, 2014, 4,000,000 warrants were issued in connection with the Mezzanine subordinated unsecured term loan representing an allocated fair value of $14,694,736. Warrants initially had an exercise price of $15 per Common Share, which was subsequently adjusted to $19.17 per Common Share effective as of June 20, 2014, representing the 5-day VWAP of the Common Shares on the TSX following the announcement of the agreement to acquire the Rational Group. The warrants may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX.

25. Major customers

Revenues from one major customer accounted for approximately 21% of revenues for the six month period ended June 30, 2014 (2013 - 25% from two customers). Outstanding accounts receivable from the one major customer at June 30, 2014 was 5% (2013 – 28% from two customers).

26. Financial instruments

FOREIGN EXCHANGE RISK

The Corporation is mainly exposed to foreign currency fluctuations on its accounts receivable, receivable under finance lease, cash, restricted cash, customer deposits, income tax receivable, income tax payable, and accounts payable and accrued liabilities. As at June 30, 2014, the Corporation’s significant foreign exchange currency exposure on these financial instruments by currency was as follows:

Analysis by currency in Canadian equivalent


	USD $			EUR $			GBP $			MXN $			SEK $
Cash		187,312,000			2,013,000			950,000			2,094,000			1,473,000
Restricted cash		—			116,000			—			—			—
Accounts receivable		38,337,000			5,028,000			1,713,000			3,574,000			967,000
Finance Lease		13,374,000			—			—			—			—
Income tax receivable		27,000			289,000			—			3,000			417,000
Accounts payable and accrued liabilities		(18,934,000	)		(2,832,000	)		(2,301,000	)		(1,536,000	)		(4,183,000	)
Income tax payable		(468,000	)		(6,000	)		(33,000	)		—			—
Provisions		(4,057,000	)		(984,000	)		(5,317,000	)		—			(262,000	)
Holdback of purchase price		(7,469,000	)		—			—			—			—
Equipment financing		(1,154,000	)		—			—			—			—
Customer deposits		(3,306,000	)		(694,000	)		(303,000	)		—			—

A ten percent increase (decrease) in the strengthening or weakening of the following currencies versus the Canadian dollar at the end of the year would have increased (decreased) net comprehensive income (loss) for the year, all other variables held constant, by:


Currency	10% Increase (Decrease)
USD		20,366,000
EUR		293,000
GBP		(529,000	)
MXN		414,000
SEK		(159,000	)

The Corporation does not hedge these exposures. This exposure is monitored by the Corporation’s reporting system and is reviewed by Management on a monthly basis.

INTEREST RATE RISK

The Corporation is exposed to fair value interest rate risk with respect to its subordinated debt, other long-term debt and convertible debentures which bear a fixed rate of interest. The Corporation is exposed to cash flow interest rate risk on its bank indebtedness and senior secured term loan, which bears interest at variable rates. A one percentage point increase (decrease) in interest rates would have decreased (increased) pre-tax earnings by approximately $896,901 in the period, with all other variables held constant. Management monitors movements in the interest rates by reviewing the Bank of Canada prime rate and LIBOR on a quarterly basis.

LOGO

CREDIT RISK

Details of the Corporation’s accounts receivable were as follows:


	June 30, 2014 $			December 31, 2013 $
Not past due		32,180,208			31,464,575
Past due 1-30 days		7,052,523			4,528,808
Past due 31-60 days		1,638,220			1,379,834
Past due 61-90 days		1,383,243			3,957,859
Past due 91-120 days		1,128,885			436,780
Past due 121-150 days		5,190,389			310,837
Past due 151-180 days		348,330			2,370,048
Past due more than 181 days		4,045,448			4,505,744
Allowance for doubtful accounts		(1,831,731	)		(1,494,284	)

Outstanding, end of period		51,135,515			47,460,201

The Corporation’s maximum exposure to credit risk is equal to the carrying value of accounts receivable as set out on the statement of financial position.

LIQUIDITY RISK

The Corporation believes that future cash flows generated by operations and availability under its borrowing facility will be adequate to meet its financial obligations.


	On Demand $		Less than 3 months $		3 to 6 Months $		6 to 9 Months $		9 to 12 months $		Greater than 1 year $
Accounts payable and accrued liabilities		35,352,497		—		—		—		—		520,593
Provisions		9,373,545		—		—		—		—		1,246,530
Customer Deposits		4,302,559		—		—		—		—		—
Income tax payable		1,539,486		—		—		—		—		—
Holdback on purchase price		—		—		—		—		—		7,469,000
Equipment financing*		—		362,976		312,172		259,442		184,018		441,529
Long-term debt*		—		9,828,851		8,435,723		9,471,382		8,513,063		581,515,017

Total		50,568,087		10,191,827		8,747,895		9,730,824		8,697,081		591,192,669

*	includes capital and interest

27. Fair value

The Corporation held shares and debentures of a publicly traded company which it classified as financial assets at fair value through profit and loss, carried at a fair value, with gains and losses recognized in the consolidated statement of comprehensive income (loss).

28. Capital Management

The Corporation’s objective in managing capital is to ensure a sufficient liquidity position to market its products, to finance its sales and marketing activities, research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with property and equipment. The ability to fund these requirements in the future depends on the Corporation’s ability to access additional capital and generate additional cash flow from its operations.

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. As at June 30, 2014, $nil (December 31, 2013 – $nil) has been used to finance the Corporation’s daily operations.

The capital management objectives listed above have not changed since the previous fiscal year.

The Corporation believes that funds from operations, as well as existing and future financial resources should be sufficient to meet the Corporation’s requirements until June 30, 2015.

LOGO

29. Geographic information


	June 30, 2014 $		June 30, 2013 $
Geographic Area
North America		47,967,718		44,958,010
Europe		15,103,277		29,673,231
Latin America & Caribbean		20,583,212		676,396

		83,654,207		75,307,637

The distribution of the Corporation’s non-current assets (consisting of goodwill and intangible assets and property and equipment) by geographical location is approximately as follows:


	June 30, 2014 $		December 31, 2013 $
Geographic Area
North America		178,374,614		151,177,935
Europe		34,148,277		36,192,336
Latin America & Caribbean		17,097,755		16,187,795

		229,620,646		203,558,066

The non-current assets classified as held for sale (see note 11) are excluded from the geographical distribution above.

30. Statement of cash-flows

Changes in non-cash operating elements of working capital is as follows:


	For the three month period ended						For the six month period ended
	June 30, 2014 $			June 30, 2013 $			June 30, 2014 $			June 30, 2013 $
Investment tax credits receivable		(373,162	)		885,565			(133,570	)		634,059
Accounts receivable		(3,293,288	)		(3,158,997	)		(3,559,459	)		3,677,164
Prepaid expenses		(2,059,205	)		1,266,540			(2,809,374	)		4,042,513
Inventories		(173,889	)		271,965			266,322			138,275
Income taxes receivable		2,457			(107,572	)		3,340			(131,867	)
Income taxes payable		2,155,788			(154,653	)		3,872,368			(68,656	)
Equipment financing		(327,940	)		(310,952	)		(234,804	)		(580,562	)
Accounts payable and accrued liabilities		(503,938	)		(1,994,274	)		(652,203	)		(4,738,344	)
Provisions		1,061,320			(3,397,801	)		1,537,143			(2,648,840	)
Deferred revenue		402,859			(21,826	)		427,784			(133	)
Customer deposits		(648,547	)		(4,051,181	)		(191,024	)		(7,640,685	)

		(3,757,545	)		(10,773,186	)		(1,473,477	)		(7,317,076	)

Supplemental information
Income taxes paid		229,575			1,181,287			1,886,409			1,359,616
Interest paid		7,009,871			3,060,790			11,620,591			6,633,058

31. Related party transactions


	June 30, 2014 $		June 30, 2013 $
Salaries, bonuses and short term employee benefits		847,000		597,000
Share based payments		676,000		227,000

		1,523,000		824,000

32. Contingency

As a result of two separate lawsuits filed by one of the Corporation’s former clients in the Courts of Malta, a combined total of $129,640 Canadian Dollar equivalent is currently being held by the Courts (see note 12).

Management is of the opinion that these claims are unfounded and that the possibility of a material liability is unlikely. As a result, no provision has been recorded.

33. Revenues

The Corporation revenues consist of the following major categories:


	For the six month period ended
	June 30, 2014 $		June 30, 2013 $
Finance income		483,941		145,670
Finance leases		1,430,241		320,872
Software licensing		15,938,285		27,758,945
Sales		16,059,532		1,760,684
Participation leases and arrangements		48,534,044		39,069,225
Hosted casino		1,208,164		6,252,241

		83,654,207		75,307,637

LOGO

34. Business Combination

DIAMOND GAME

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $
Cash and cash equivalents		39,546
Inventory		1,192,150
Trade and other receivables		1,718,606
Prepaid expenses		317,345
Property, plant and equipment		5,865,276
Trade payables and accrued liabilities		(3,637,693	)
Equipment financing		(104,794	)
Deferred revenue		(1,756,675	)
Deferred income tax liability		(46,709	)
Intercompany liability		(2,111,756	)
Purchase price allocated Intangibles		11,587,451
Goodwill		14,704,914
Deferred income tax liability		(2,896,810	)

Total consideration		24,870,851
Cash consideration		17,870,851
Holdback on Purchase Price		7,000,000

Total consideration		24,870,851

Of the USD$24.87 million consideration paid by Amaya in connection with the acquisition of Diamond Game, there was a holdback of USD $7 million.

If the acquisition had occurred on January 1, 2014, Diamond Game would have contributed USD$9.80 million and USD$0.72 million to consolidated revenues and net income respectively. Since the date of acquisition, Diamond Game has contributed USD$7.37 million and USD$0.66 million to consolidated revenues and net income respectively.

Acquisition-related costs directly related to the Diamond Game acquisition was USD$1,145,834 and was expensed in the consolidated statement of comprehensive income (loss) during the year ended December 31, 2013 and in the period ended March 31, 2014.

35. Expenses Classified By Nature


	For the three month period ended									For the six month period ended
	June 30, 2014 $			June 30, 2013 $			June 30, 2014 $			June 30, 2013 $
Cost of Products
Inventories, beginning of period		9,931,024			7,751,093			7,594,918			7,530,794
Translation		(317,287	)		223,634			(69,801	)		104,084
Purchases		3,969,479			619,507			5,498,682			933,793
Inventory acquired on business combination		—			—			1,317,922			—
Net Transfer from (to) revenue producing assets		—			1,072			1,213,971			145,187
Inventories, end of period		(9,787,643	)		(7,879,429	)		(9,787,643	)		(7,879,429	)

		3,795,573			715,877			5,768,049			834,429

Financial
Interest and bank charges		8,353,445			4,501,159			13,235,154			10,229,827
Foreign exchange		536,991			3,281,517			(3,283,692	)		3,764,908

		8,890,436			7,782,676			9,951,462			13,994,735
General and administrative
Utilities		234,907			167,950			476,958			299,375
Office		806,960			637,176			1,309,986			840,472
Taxes and licenses		940,249			607,621			1,293,806			1,121,487
Insurance		363,029			306,820			686,841			531,683
Salaries and fringe benefits		16,520,803			13,146,601			32,388,992			26,305,321
Termination of employment agreement		269,525			402,918			1,347,143			1,850,747
Stock-based compensation		781,135			493,778			1,534,698			925,400
Depreciation of property and equipment		3,863,671			3,120,115			7,530,014			6,515,125
Amortization of deferred development costs		745,955			287,806			1,456,128			419,288
Amortization of intangible assets		5,332,436			4,317,904			10,435,530			8,443,155
Consulting fees		2,479,883			3,071,705			5,283,728			6,714,340
General donations		26,903			57,671			32,567			86,260
Maintenance and repairs		1,941,308			914,446			3,411,400			1,888,666
Professional fees		1,462,103			1,970,746			3,527,098			3,863,593
Termination of agency agreement		—			—			—			100,834
Communications		1,794,645			1,869,634			3,663,792			3,888,511
Automobile		86,807			63,731			158,055			133,105
Bad debt		138,070			39,024			337,447			646,426
Rent		1,492,624			1,388,449			2,944,945			2,688,885
Loss on disposal of assets		79,836			187,690			298,720			187,690

		39,360,849			33,051,785			78,117,848			67,450,363
Selling
Royalties		1,330,233			1,450,716			2,847,802			2,780,034
Advertising and promotion		659,932			927,114			2,015,796			2,227,920
Travel and entertainment		1,049,780			912,945			1,971,876			1,773,156
Shipping		352,495			299,406			705,295			510,075

		3,392,440			3,590,181			7,540,769			7,291,185
Acquisition-related costs
Underwriter fees		—									—
Professional fees		6,150,084			22,465			9,803,673			331,944

		6,150,084			22,465			9,803,673			331,944

LOGO

36. Net earnings per share

The following table sets forth the computation of basic and diluted loss per common share from continuing operations for the three and six month period ended June 30, 2014 and 2013.


	For the three month period ended						For the six month period ended
	June 30, 2014 $			June 30, 2013 $			June 30, 2014 $		June 30, 2013 $
Numerator
Numerator for basic and diluted (loss) per common share – net loss		(2,894,980	)		(11,441,570	)		36,748,631		(18,882,411	)

Denominator
Denominator for basic (loss) per common share – weighted average number of common shares		94,295,777			86,733,824			94,216,683		85,763,654

Effect of dilutive securities		4,558,263			2,811,170			4,149,369		2,791,877

Stock options		2,990,258			2,126,652			2,676,490		2,034,349
Warrants		1,568,005			684,518			1,472,879		757,528

Dilutive potential common shares		98,854,041			89,544,994			98,366,052		88,555,531

Denominator for diluted (loss) per common share – adjusted weighted number of shares		94,295,777			86,733,824			98,366,052		85,763,654
Basic earnings (loss) per common share		(0.03	)		(0.13	)		0.39		(0.22	)
Diluted earnings (loss) per common share		(0.03	)		(0.13	)		0.37		(0.22	)

For the three month period ended June 30, 2014 and the three and six month period ended June 30, 2013, the diluted loss per share was the same as the basic net loss per share since the dilutive effect of stock options, warrants and other convertible instruments was not included in the calculation; otherwise the effect would have been anti-dilutive. Accordingly, the diluted loss per share for the period was calculated using the basic weighted average number of common shares outstanding.

37. Sale of WagerLogic Malta Holdings Ltd.

Subsidiaries of Amaya will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to a services agreement.

The Share Purchase Agreement includes an earn out agreement pursuant to which the vendor thereunder may receive additional cash consideration payable on the second and third anniversary date from closing based on the achievement of certain revenue targets, as well as a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($10.67 million CAD), of which USD$3.64 million ($3.88 million CAD) is recorded in Provisions in the consolidated statement of financial position at June 30, 2014.

38. Subsequent Events

The Corporation completed the acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the parent company of Isle of Man-headquartered Rational Group Ltd. (“Rational Group”), the owner and operator of the PokerStars and Full Tilt Poker brands, in an all-cash transaction for an aggregate purchase price of US$4.9 billion (“Purchase Price”), including certain deferred payments and subject to customary purchase price adjustments (“Acquisition”).

FINANCING DETAILS

The Purchase Price (excluding certain deferred payments) and fees and expenses relating to the Acquisition and the related financing that have been paid by closing of the Transaction were financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares, allocated as follows:

•

$1.05 billion of convertible preferred shares, $600 million of which were subscribed by funds or accounts managed or advised by GSO Capital Partners LP or its affiliates. Terms of the convertible preferred shares are included in the Corporation’s Management Information Circular dated June 30, 2014, which was filed on SEDAR.

•

C$640 million of subscription receipts at C$20 per subscription receipt which were automatically converted on a one-to-one basis into common shares upon closing of the Acquisition.

•

Certain funds or accounts managed or advised by GSO Capital Partners LP or its affiliates purchased $55 million of common shares at C$20 per share.

•

Senior Secured Credit Facilities in the aggregate principal equivalent amount in US Dollars of approximately $2.92 billion, and consisting of the following:

•

a $1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor;

•

a $100 million five-year first lien revolving credit facility priced at Libor plus 4.00%, none of which was drawn at completion; and

•

an $800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor.

•

Approximately $213 million from cash on hand, which includes the $50 million deposit made on June 12, 2014.

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EX-99.33

Exhibit 99.33

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TABLE OF CONTENTS	Management’s Discussion and Analysis	1
	Overview	1
	Outlook	8

	Basis of Presentation	9

	Forward-looking Statements	9

	Selected Financial Information	10

	Financial Condition	10

	Summary of Quarterly Results	11

	Comparison of Results	11

	Comparison of the Three and Six-Month period ended June 30, 2014 and June 30, 2013	11

	Comparison of the Three-Month Period Ended June 30, 2014 and March 31, 2014	13

	Liquidity and Capital Resources	14

	Cash Flows by Activity	19

	Summary of Significant Accounting Policies	20

	Change in Accounting Policies	34

	Recent Accounting Pronouncements	35

	Off Balance Sheet Arrangements	36

	Cautionary Note Regarding Forward Looking Statements	40

	Further Information	40

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Management’s Discussion and Analysis

The following discussion and analysis provides a review of the Corporation’s results of operations, financial condition and cash flows for the three and six month period ended June 30, 2014. This document should be read in conjunction with the information contained in the Corporation’s consolidated financial statements and related notes for the three and six month period ended June 30, 2014, which were prepared in accordance with International Financial Reporting Standards. The consolidated financial statements and additional information regarding the business of the Corporation are available at www.sedar.com

For reporting purposes, the Corporation prepares consolidated financial statements in Canadian dollars and in conformity with International Financial Reporting Standards. Unless otherwise indicated, all dollar (“$”) amounts in this Management Discussion and Analysis are expressed in Canadian dollars. References to “EUR” are to European Euros, references to “GBP” are to Pounds Sterling, references to “USD” are to U.S. dollars, references to “MXN” are to Mexican Peso and references to “SEK” are to Swedish Kronor.

This Management Discussion and Analysis (MD&A) is dated August 14, 2014, for the three and six month period ended June 30, 2014.

Overview

The Corporation offers a true ecosystem of physical, virtual and mobile gaming solutions to capitalize on the convergence of physical and interactive gaming. The Corporation believes such convergence can help operators achieve a higher yield per customer by enabling them to acquire a customer through one medium (physical or interactive) and then leverage its existing brand, marketing and loyalty programs, and a common wallet to cross sell its other offerings.

Products and Services

Amaya has one reportable segment, Diversified Gaming Solutions, which in the second quarter ended June 30, 2014 consisted primarily of the following categories of solutions and services: business-to-business (“B2B”) interactive gaming solutions, land-based gaming solutions, and lottery solutions.

Interactive Gaming Solutions

Amaya’s interactive gaming solutions include:

ii.

iii.

iv.

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Land-based Gaming Solutions

ii.

Lottery Solutions

Amaya’s Lottery Solutions are designed to permit gaming jurisdictions to exploit additional sources of revenue. They consist primarily of the following:

Instant Ticket Vending Machines

ii.

Mobile Lottery

Acquisitions

On November 1, 2012, Amaya announced that it had completed the purchase of Ongame from bwin.party digital entertainment plc. Ongame is a provider of poker software and network solutions.

On November 5, 2012, Amaya announced that it had completed the purchase of Cadillac Jack, an acquisition previously announced on September 25, 2012.

On February 14, 2014, Amaya announced that it had closed its acquisition of Diamond Game, a private and arms-length company.

On August 1, 2014, Amaya announced that it had closed its acquisition of Rational Group, one of the world’s largest online gaming companies and owner and operator of the PokerStars and Full Tilt brands. In addition to operating two of the largest online poker sites where it has dealt more than 100 billion poker hands and held over 800 million online tournaments, the group is the largest producer of live poker events around the world.

Second quarter and Subsequent Highlights

Rational Group Acquisition

On August 1, 2014, Amaya announced that it had completed the acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the parent company of Isle of Man-headquartered Rational Group Ltd. (“Rational Group”), the owner and operator of the PokerStars and Full Tilt Poker brands, in an all-cash transaction for an aggregate purchase price of USD$4.9 billion (the “Purchase Price”), including certain deferred payments and subject to customary purchase price adjustments (the “Acquisition”).

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The Rational Group operates business-to-consumer (“B2C”) gaming and related businesses and brands including PokerStars, Full Tilt Poker, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions and poker programming created for television and online audiences. The online poker platforms PokerStars and Full Tilt Poker are collectively the world’s most popular and profitable online poker brands with more than 85 million registered players on desktop and mobile devices. In addition to operating two of the largest online poker sites where it has dealt more than 100 billion poker hands and held over 800 million online tournaments, the group is the largest producer of live poker events around the world.

Rational Group’s businesses are among the most respected in the industry for delivering high-quality player experiences, unrivalled customer service, and innovative software. The Group employs industry-leading practices in payment security, game integrity, and player fund protection, offering customer support in 29 languages. The Rational Group holds more online poker licenses than any other e-gaming company, and works closely with regulators around the world to help establish sensible global regulation.

Amaya intends to strongly support Rational Group’s growth initiatives in new gaming verticals, including casino, sportsbook and social gaming, and new geographies. On July 21, 2014, Amaya announced that a selection of its online casino games had been launched on Full Tilt Poker to bolster the site’s expansion into casino gaming. Earlier this year, Full Tilt began expanding its game portfolio by offering a range of single- and multi-player variations of Blackjack and Roulette as well as online slots. Rational Group has enhanced its online slots offering with the integration of Amaya’s Casino Gaming System, completed in July, 2014, and in the future will further leverage Amaya’s international reach and product pipeline for additional offerings.

Rational Group employs more than 1,700 people globally and is consistently selected as one of the “Best Workplaces” in the UK, Ireland and Costa Rica by the Great Places to Work Institute.

The Purchase Price (excluding certain deferred payments) and fees and expenses relating to the Acquisition and the related financing that were paid by closing of the Transaction were financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares, allocated as follows:

•

USD$1.05 billion of convertible preferred shares, which were subscribed for as follows: USD$600 million were subscribed by funds or accounts managed or advised by GSO Capital Partners LP or its affiliates (collectively, “GSO”); approximately USD$270 million were subscribed for by certain funds or accounts managed or advised by BlackRock Financial Management, Inc. or its affiliates (collectively, “BlackRock”); and, Canaccord Genuity purchased from treasury, on an underwritten bought-deal private placement basis, approximately USD$180 million. The Convertible Preferred Shares will not be listed on any exchange but, subject to legal limitations, will be freely transferable at the option of a holder. Each Convertible Preferred Share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually. The Corporation may, at any time after the first three (3) years of issuance, give notice of its election to cause all of the outstanding Convertible Preferred Shares to be automatically converted, subject to certain conditions. The terms of the convertible preferred shares are included in the Corporation’s Management Information Circular dated June 30, 2014, which was filed on SEDAR.

•

$640 million of subscription receipts at $20 per subscription receipt (the “Subscription Price”), underwritten on a bought deal, private placement basis, which were automatically converted on a one-to-one basis into common shares upon closing of the Acquisition. BlackRock purchased approximately USD$55 million of the subscription receipts. The Subscription Price represented a premium of approximately 66.4% to the closing price of C$12.02 per common share on the TSX on June 11, 2014, the last trading day prior to the announcement of the Acquisition, and a premium of approximately 108.5% over the 30-trading day volume-weighted average price of C$9.59 per common share on the TSX, up to and including June 11, 2014.

•

GSO purchased USD$55 million of common shares at C$20 per share.

•

Senior Secured Credit Facilities in the aggregate principal equivalent amount in US Dollars of approximately $2.92 billion, fully underwritten by Deutsche Bank AG New York Branch (“Deutsche Bank”), Barclays Bank PLC (“Barclays”), and Macquarie Capital (USA) Inc. (“Macquarie Capital”), and consisting of the following:

•

a USD$1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor;

•

a USD$100 million five-year first lien revolving credit facility priced at Libor plus 4.00%, none of which was drawn at completion; and

•

an USD$800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor.

•

Approximately USD$213 million from cash on hand, which includes the USD$50 million deposit made on June 12, 2014, the date of the announcement of the Acquisition.

Both GSO and BlackRock participated in the debt financing.

In connection with the Transaction, and as consideration for GSO’s and BlackRock’s significant role in the financing of the Transaction, the Corporation has granted 11 million common share purchase warrants to GSO (the “GSO Warrants”) and 1.75 million common share purchase warrants to BlackRock (the “BlackRock Warrants”, collectively with the GSO Warrants, the “Rational Group Warrants”), each with an exercise price of C$0.01 and exercisable for a term of 10 years, as payment for a portion of the fees payable to the two parties.

Oldford Group recorded consolidated revenues of approximately USD$1.133 billion (2012 – USD$976 million) and net income of USD$422 million (2012 – USD$314 million) in the fiscal year ended December 31, 2013. Oldford Group recorded consolidated revenues of approximately USD$487 million (2013 – USD$464 million) and net income of USD$193 million (2012 – USD$167 million) in the five months ended May 31, 2014.

Further details on the Acquisition, including financial statements for the Oldford Group, are included in public filings made on SEDAR, including press releases related to the Acquisition, the Corporation’s Management Information Circular related to its Annual and Special Meeting of Amaya Shareholders held July 30, 2014, and a Business Acquisition Report.

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2014 Full Year Financial Guidance

Due to the Corporation’s acquisition of Rational Group, whose results will be consolidated under Amaya’s as of August 1, 2014, Amaya has updated its 2014 full year financial targets, originally identified May 15, 2014:

•

Revenue of $669 to $715 million, compared to originally identified target range of $193 to $203 million

•

Adjusted EBITDA of $265 to $285 million, compared to originally identified target range of $77 to $86 million

The updated targets reflect the following:

•

Consolidating five months of results from the Rational Group

•

Elimination upon consolidation of the contribution that was originally included in Amaya’s May guidance from the integration of its online casino games onto Rational Group’s Full Tilt casino offering, as Rational Group is now a wholly owned subsidiary of Amaya

Other Highlights

On May 15, 2014, Amaya’s wholly-owned subsidiary Cadillac Jack, Inc. (“Cadillac Jack”) obtained credit facilities from FS Investment Corporation and FS Investment Corporation II for the purpose of financing working capital expenses and general corporate purposes of the Amaya group. These lending entities are advised by FB Income Advisor, LLC and FSIC II Advisor, LLC, respectively, and sub-advised by an affiliate of GSO Capital Partners LP, Blackstone’s credit business. The credit facilities provide for (1) an incremental US$80 million term loan to Cadillac Jack’s existing US$160 million senior term loan, with the new aggregate principal amount of US$240 million bearing interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”); and (2) mezzanine debt in the form of a subordinated term loan in the aggregate principal amount of US$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash (the “Mezzanine Facility”, and collectively with the Senior Facility, the “New Facilities”). The Senior Facility will mature over a 5-year term and the Mezzanine Facility will mature over a 6-year term from the closing date. The Senior Facility is secured by the assets of Cadillac Jack and its subsidiaries. The Mezzanine Facility is unsecured. Amaya has provided an unsecured guarantee of the obligations under the New Facilities of Cadillac Jack in favour of the lenders. The New Facilities contain customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios. Amaya has agreed to grant the lenders, in relation to the Mezzanine Facility, with 4 million common share purchase warrants (the “CJ Warrants”) entitling the holders thereof to acquire one common share of Amaya. The CJ Warrants initially had an exercise price of $15 per Common Share, which was subsequently adjusted to $19.17 per Common Share effective as of June 20, 2014, representing the 5-day VWAP of the Common Shares on the TSX following the announcement of the agreement to acquire the Rational Group. The CJ Warrants may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX.

On May 2, 2014, Amaya announced that its subsidiary Cadillac Jack had received approval from New Jersey’s Division of Gaming Enforcement (the “DGE”) to utilize its Genesis DV1 slot machine platform and associated hardware and software, including top performing game titles Fire Wolf, Siberian Siren, and Legend of White Buffalo, in the state. Cadillac Jack has subsequently obtained multiple transactional waivers to begin supplying machines to Atlantic City casinos

Outlook

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In the second quarter ended June 30, 2014, Amaya was a business-to-business (“B2B”) provider of diversified gaming solutions to licensed gaming operators and government bodies. However, with the Corporation’s Acquisition of Rational Group, the Corporation’s primary revenue provider, beginning in the third quarter of 2014, will be Rational Group’s business-to-consumer (“B2C”) gaming and related businesses and brands.

Basis of Presentation

The following information and comments are intended to provide a review and analysis of the Corporation’s operational results and financial position for the three and six month periods ended June 30, 2014, as compared to the corresponding periods ended on June 30, 2013. This MD&A should be read in conjunction with the consolidated financial statements and related notes for the three and six month periods ended June 30, 2014. Such consolidated financial statements, and the respective notes thereto have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Unless otherwise indicated, the information contained herein is stated as of June 30, 2014.

Forward-looking Statements

Selected Financial Information


	For the six month period ended		For the Year ended
	June 30, 2014 $		December 31, 2013 $
Total Revenue		83,564,207		154,529,443
Net Income (Loss)		36,748,631		(29,172,857	)
Basic Earnings (Loss) Per Share		0.39		(0.33	)
Diluted Earnings (Loss) Per Share		0.37		(0.33	)
Total Assets		688,945,696		440,831,004
Total Long Term Financial Liabilities		383,129,252		200,947,508
Cash Dividends Declared Per Share		—		—

Financial Condition

The Corporation’s asset base increase of approximately $250,000,000 was driven by the proceeds of the Corporation’s sale of WagerLogic for aggregate gross proceeds of $62,500,000, an incremental facility of USD$80,000,000 to Cadillac Jack’s existing senior term loan, mezzanine debt of USD$100,000,000, and the acquisition of Diamond Game.

Based on the Corporation’s current revenue expectations, the funds available from the Corporation’s private placement of debt and shares, the funds available from refinancing of its senior secured term loan and mezzanine debt, and the funds available from the WagerLogic sale, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.


	For the six month period ended June 30,


	2014 $		2013 $
	2014 $		2013 $
Revenues by Geographic Area
North America		47,967,718		29,809,790
Europe		15,103,277		29,679,695
Latin America & Caribbean		20,583,212		15,818,152

The revenue increase in the Latin America and the Caribbean for the six month period ended June 30, 2014 relative to the six month period ended June 30, 2013 is primarily attributable to increased sales of gaming machines.

The revenue increase in North America for the six month period ended June 30, 2014 relative to the six month period ended June 30, 2013 is primarily attributable to growth in Cadillac Jack’s revenues in the U.S. and the acquisition of Diamond Game whose customer base is predominantly North American.

The revenue decrease in Europe for the six month period ended June 30, 2014 relative to the six month period ended June 30, 2013 is primarily attributable to the decrease in hosted casino revenue driven by the sale of WagerLogic and the decrease in B2B interactive gaming software licensing revenue.

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Summary of Quarterly Results


For the three months ended	30-Sep-12 $		31-Dec-12 $			31-Mar-13 $			30-Jun-13 $			30-Sep-13 $			31-Dec-13 $			31-Mar-14 $		30-Jun-14 $
For the three months ended	30-Sep-12 $		31-Dec-12 $			31-Mar-13 $			30-Jun-13 $			30-Sep-13 $			31-Dec-13 $			31-Mar-14 $		30-Jun-14 $
Revenue		18,317,140		37,194,312			38,053,247			37,254,390			40,213,213			39,008,593			41,202,223		42,451,984
Net income (loss)		881,451		(711,309	)		(7,440,841	)		(11,441,570	)		(3,466,018	)		(6,824,429	)		39,643,610		(2,894,980	)
Basic earnings (loss) per Common share		0.01		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.42		(0.03	)
Diluted earnings (loss) per Common share		0.01		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.38		(0.03	)

Comparison of Results

Comparison of the Three and Six-Month period ended June 30, 2014 and June 30, 2013

REVENUE

Revenue for the three month period ended June 30, 2014, was $42.45 million compared to $37.25 million for the three month period ended June 30, 2013, representing an increase of 14%. This is primarily attributable to (i) an increase in gaming machines sold outright; and (ii) consolidating Diamond Game revenue, partially offset by (i) reduced software licensing revenues attributable to significant upfront software licensing fees earned in the second quarter of 2013 for platform set-ups and platform licensing and a decline in revenue from Ongame; and (ii) the sale in February, 2014 of WagerLogic, which generated hosted casino revenues for Amaya in the second quarter of 2013. The revenue for the three month period ended June 30, 2014, was generated from financing income, financing leases, participation leases and arrangements, outright sales, hosted casino, and software licensing of the Corporation’s solutions in the amounts of $0.32 million, $0.20 million, $24.81 million, $10.82 million, $nil, and $6.30 million respectively (Q2 2013 – $0.08 million, $0.18 million, $19.31 million, $1.12 million, $2.33 million, $14.23 million).

Revenue for the six month period ended June 30, 2014, was $83.65 million compared to $75.31 million for the six month period ended June 30, 2013, representing an increase of 11%. This is primarily attributable to (i) an increase in gaming machines sold outright; and (ii)consolidating Diamond Game revenue, partially offset by i) reduced software licensing revenues attributable to significant upfront software licensing fees earned in the second quarter of 2013 for platform set-ups and platform licensing and a decline in revenue from Ongame; and (ii) the sale in February, 2014 of WagerLogic, which had generated hosted casino revenues. The revenue for the six month period ended June 30, 2014, was generated from financing income, financing leases, participation leases and arrangements, outright sales, hosted casino, and software licensing of the Corporation’s solutions in the amounts of $0.48 million, $1.43 million, $48.53 million, $16.06 million, $1.21 million, and $15.94 million respectively (H1 2013 – $0.15 million, $0.32 million, $39.07 million, $1.76 million, $6.25 million, $27.76 million).

COST OF PRODUCTS

Cost of products relates to the cost of products that are sold outright or under finance leases; such products are typically physical gaming products such as slot machines.

Cost of products increased from $0.72 million in the three month period ended June 30, 2013, to $3.80 million in the three month period ended June 30, 2014. The increase reflects the increase in sales of gaming machines.

Cost of products increased from $0.83 million in the six month period ended June 30, 2013, to $5.77 million in the six month period ended June 30, 2014. The increase reflects the increase in sales of gaming machines.

SELLING

Sales and marketing expenses decreased from $3.59 million for the three month period ended June 30, 2013, to $3.39 million for the three month period ended June 30, 2014, representing a decrease of 6%. The decrease was driven by reduced royalty payments to third party brand and game developers during the three month period ended June 30, 2014.

Sales and marketing expenses increased from $7.29 million for the six month period ended June 30, 2013, to $7.54 million for the six month period ended June 30, 2014, representing an increase of 3%. The increase was driven by increased shipments of slot machines during the six month period ended June 30, 2014.

GENERAL AND ADMINISTRATIVE

General and administrative expenses increased from $33.05 million for the three month period ended June 30, 2013, to $39.36 million for the three month period ended June 30, 2014, representing an increase of 19%. The increase was driven by (i) a growing employee base due to the Diamond Game acquisition; (ii) increased amortization of intangibles, property and equipment, and deferred development costs; (iii) increased repairs and maintenance expenses associated with Diamond Game’s install base; (iv) increased stock-based compensation; partially offset by the following: (v) higher consulting and professional fees during the three month period ended June 30, 2013, partially related to developing the AGO platform.

General and administrative expenses increased from $67.45 million for the six month period ended June 30, 2013, to $78.12 million for the six month period ended June 30, 2014, representing an increase of 16%. The increase was driven by (i) a growing employee base due to the Diamond Game acquisition; (ii) increased amortization of intangibles, property and equipment, and deferred development costs; (iii) increased repairs and maintenance expenses associated with Diamond Game’s install base; (iv) increased stock-based compensation; partially offset by the following: (v) higher consulting and professional fees during the three month period ended June 30, 2013, partially related to developing the AGO platform; and (vi) higher employment agreement termination expenses incurred during the six month period ended June 30, 2013.

FINANCIAL

Financial expenses increased from $7.78 million for the three month period ended June 30, 2013, to $8.89 million for the three month period ended June 30, 2014. The increase is primarily attributable to interest on refinanced senior secured term loan and mezzanine debt financing incurred during the three month period ended June 30, 2014.

Financial expenses decreased from $13.99 million for the six month period ended June 30, 2013, to $9.95 million for the six month period ended June 30, 2014. The decrease is primarily attributable to interest accretion on convertible debentures in connection with the offer to buy all of the outstanding shares of Cryptologic during the six month period ended June 30, 2013.

ACQUISITION RELATED EXPENSES

Acquisition related expenses increased from $0.02 million for the three month period ended June 30, 2013, to $6.15 million for the three month period ended June 30, 2014. The increase is driven by professional fees incurred in connection with the Rational Group acquisition during the three month period ended June 30, 2014.

Acquisition related expenses increased from $0.33 million for the six month period ended June 30, 2013, to $9.80 million for the six month period ended June 30, 2014. The increase is driven by professional fees incurred in connection with the Rational Group and Diamond Game acquisitions during the six month period ended June 30, 2014.

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CURRENT AND DEFERRED INCOME TAX

Current income taxes decreased from $3.03 million for the three month period ended June 30, 2013, to $2.83 million for the three month period ended June 30, 2014. Taxable income during the three month period ended June 30, 2014 decreased relative to taxable income generated during the three month period ended June 30, 2013.

Current income taxes increased from $3.72 million for the six month period ended June 30, 2013, to $6.94 million for the six month period ended June 30, 2014. Taxable income during the six month period ended June 30, 2014 increased relative to taxable income generated during the six month period ended June 30, 2013.

For the three month period ended June 30, 2014, the Corporation recognized deferred income tax recovery driven primarily by (i) differences between accounting and tax treatment of purchase price allocated intangibles; and (ii) temporary differences arising from benefit of loss carry forwards; and (iii) tax election adjusting the tax basis of assets acquired in the Diamond Game acquisition.

For the six month period ended June 30, 2014, the Corporation recognized deferred income tax recovery driven primarily by (i) differences between accounting and tax treatment of purchase price allocated intangibles; and (ii) temporary differences arising from benefit of loss carry forwards; and (iii) tax election adjusting the tax basis of assets acquired in the Diamond Game acquisition.

Comparison of the Three-Month Period Ended June 30, 2014 and March 31, 2014

REVENUE

Revenue for the three month period ended June 30, 2014, was $42.45 million compared to $41.20 million for the three month period ended March 31, 2014, representing an increase of 3%. This revenue increase was driven by (i) consolidating a full quarter of Diamond Game participation leases and arrangements revenue and (ii) outright sales of Cadillac Jack gaming machines; partially offset by (iii) decreased hosted casino revenue due to the sale of WagerLogic; and (iv) decreased software licensing revenue.

COST OF PRODUCTS

Cost of products relates to the cost of products that are sold outright or under finance leases; such products are typically physical gaming products such as slot machines. Cost of products increased from $1.97 million in the three month period ended March 31, 2014, to $3.80 million in the three month period ended June 30, 2014. The increase reflects the increase in sales of gaming machines during three month period ended June 30, 2014.

SELLING

Sales and marketing expenses decreased from $4.15 million for the three month period ended March 31, 2014, to $3.39 million for the three month period ended June 30, 2014. The decrease was driven by increased trade show expenditures during the three month period ended March 31, 2014.

GENERAL AND ADMINISTRATIVE

General and administrative expenses increased from $38.76 million for the three month period ended March 31, 2014, to $39.36 million for the three month period ended June 30, 2014. The increase was driven by (i) a growing employee base due to the Diamond Game acquisition; (ii) increased amortization of intangibles, property and equipment, and deferred development costs; and (iii) increased repairs and maintenance expenses associated with Diamond Game’s install base; partially offset by (iv) lower professional and consulting fees and (v) increased employment agreement termination expenses incurred during the three month period ended March 31, 2014.

FINANCIAL

Financial expenses increased from $1.06 million for the three month period ended March 31, 2014, to $8.89 million for the three month period ended June 30, 2014. The increase is primarily attributable to the impact of foreign exchange and interest on refinanced senior secured term loan and mezzanine debt financing incurred during the three month period ended June 30, 2014.

ACQUISITION RELATED EXPENSES

Acquisition related expenses increased from $3.65 million for the three month period ended March 31, 2014, to $6.15 million for the three month period ended June 30, 2014. The increase is driven by professional fees incurred in connection with the Rational Group acquisition during the three month period ended June 30, 2014.

CURRENT AND DEFERRED INCOME TAX

Current income taxes decreased from $4.10 million for the three month period ended March 31, 2014, to $2.83 million for the three month period ended June 30, 2014. The decrease primarily attributable to the Corporation being less taxable in a number of tax jurisdictions in which it operates.

For the three month period ended June 30, 2014, the Corporation recognized deferred income tax recovery driven primarily by (i) differences between accounting and tax treatment of purchase price allocated intangibles; and (ii) temporary differences arising from benefit of loss carry forward; and (iii) tax election adjusting the tax basis of assets acquired in the Diamond Game acquisition.

Liquidity and Capital Resources

Based on the Corporation’s current revenue expectations, the funds available from the Corporation’s private placement of debt and shares, the funds available from refinancing of its senior secured term loan, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.

The Corporation is exposed to liquidity risk with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring forecasted and actual cash flows and matching maturity profiles of financial assets and liabilities. The Corporation’s objective is to maintain a balance between continuity of funding and flexibility through borrowing facilities available through the Corporation’s bank and other lenders. The Corporation’s policy is to ensure adequate funding is available from operations, established lending facilities and other sources as required.

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	On Demand $		Less Than 1 year $		1-3 years $		4-5 years $		More Than 5 years $
June 30, 2014
Accounts payable and accrued liabilities		35,352,497		—		30,938		37,030		452,625
Provisions		9,373,545		—		984,104		—		262,426
Customer deposits†		4,302,559		—		—		—		—
Income taxes payable		1,539,486		—		—		—		—
Holdback of purchase price		—		—		7,469,000		—		—
Equipment financing*		—		1,118,608		441,529		—		—
Long-term debt*		—		36,249,019		100,672,551		309,681,399		171,161,067
Commitments under lease agreements for premises, hardware support contracts, and purchase obligations		—		11,757,000		9,600,000		1,357,000		86,000

Total		50,568,087		49,124,627		119,198,122		311,075,429		171,962,118

†

*	Includes capital and interest

CREDIT FACILITY

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. The revolving demand credit facility can be used for general working capital purposes. The facility bears interest at the bank’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances (June 30, 2014 - $nil), the Corporation has provided the Bank a first ranking security interest over all of the movable/personal property of the Corporation.

As at June 30, 2014, the outstanding amount of the revolving demand credit facility is $nil (December 31, 2013- $nil).

Under the terms of the credit facility arrangement with the Bank, the Corporation is required amongst other conditions, to maintain at all times certain ratios and a minimum level of net worth. As at June 30, 2014 and December 31, 2013, the Corporation was not in breach of the terms of the credit facility agreement.

LONG-TERM DEBT

The following is a summary of long-term debt outstanding at June 30, 2014 and December 31, 2013:


	June 30, 2014 $		December 31, 2013 $


Current maturity		2,769,917		2,387,557
Long-term debt		366,299,229		192,798,839

		369,069,146		195,186,396

(a)	Subordinated Debt

The Corporation fully repaid to the subordinated debt during the period ended June 30, 2014.

During the six month period ended June 30, 2014, the Corporation incurred $9,781 (2013 – $23,301) in interest.


	June 30, 2014 $		December 31, 2013 $


Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		—		275,000
Current maturity		—		(275,000	)

		—		—

(b) Non-convertible subordinated debentures

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.

During the six month period ended June 30, 2014, the Corporation incurred $2,189,421 (2013 – 1,353,371) in interest.


	June 30, 2014 $


Fair Value of Liability component		26,844,352
Fair Value of Equity component		3,155,648
Face Value		30,000,000

Transaction costs		1,831,234

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The following table reflects movements recognized during the six month period ended June 30, 2014.

Face
value

Liability
component

Equity
component

Opening balance (net of transaction costs)

30,000,000

25,205,742

2,963,024

Accretion of liability component (effective interest of 13.60%)

—

2,190,480

—

Balance at June 30, 2014

30,000,000

27,396,222

2,963,024

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$
2015		—
2016		30,000,000

During the six month period ended June 30, 2014, the Corporation incurred $8,450,271 (2013 - nil) in interest.


	June 30, 2014 $			December 31, 2013 $


Principal		255,226,400			170,176,000
Transaction costs		(4,385,832	)		(1,947,209	)
Accretion (effective interest rate of 9.90%)		264,951			12,558
Translation		111,964			(63,305	)
Current maturity		(2,560,800	)		(1,701,760	)

		248,656,683			166,476,284

Term loan principal repayments over the next five years amount to the following:


	$
2015		2,560,800
2016		2,560,800
2017		2,560,800
2018		2,560,800
2019		244,983,200

(d)	Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

The Corporation fully repaid the other long-term debt during the six months ended June 30, 2014.

During the six month period ended June 30, 2014, the Corporation incurred $9,488 (2013 – $19,595) in interest.


	June 30, 2014 $			December 31, 2013 $


Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		209,117			410,797
Current maturity		(209,117	)		(410,797	)

		—			—

(e)	Mezzanine subordinated unsecured term loan

During the six month period ended June 30, 2014, the Corporation incurred $1,821,907 (2013 - nil) in interest.


	June 30, 2014 $


Fair Value of Liability component		91,604,231
Fair Value of Equity component		15,095,769
Face Value		106,700,000

Transaction costs		2,834,584

The following table reflects movements recognized during the six month period ended June 30, 2014.


	Face value		Liability component			Equity component
	Face value		Liability component			Equity component
Opening balance (net of transaction costs)		106,700,000		89,170,680			14,694,736
Paid In Kind Interest		—		981,027			—
Accretion of liability component (effective interest of 16.16%)		—		121,271			—
Translation		—		(26,654	)		—

Balance at June 30, 2014		106,700,000		90,246,324			14,694,736

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Cash Flows by Activity

The table below outlines a summary of cash inflows and outflows by activity.

Cash Inflows and (Outflows) by Activity:


	For the three month period ended						For the six month period ended
	June 30, 2014 $			June 30, 2013 $			June 30, 2014 $			June 30, 2013 $
Operating activities		(3,497,575	)		(13,632,180	)		(4,026,209	)		(6,150,725	)
Financing activities		193,698,953			(883,465	)		193,346,715			22,905,974
Investing activities		(72,403,600	)		(10,260,132	)		(48,628,492	)		(18,650,039	)

CASH PROVIDED BY (USED IN) OPERATIONS

The Corporation generated negative cash flows from operating activities for the three-month period ending June 30, 2014. This is primarily attributable to deceleration of accounts receivable collections, acceleration of supplier payments, and settlement of termination of employment expenses from businesses held for sale. Cash used for operating activities for the three-month period ending June 30, 2014 was $(3.50) million as compared to $(13.63) million for the three-month period ending June 30, 2013.

The Corporation generated negative cash flows from operating activities for the six-month period ending June 30, 2014. This is primarily attributable to deceleration of accounts receivable collections, acceleration of supplier payments, and settlement of termination expenses from businesses held for sale. Cash used for operating activities for the six-month period ending June 30, 2014 was $(4.03) million as compared to $(6.15) million for the six-month period ending June 30, 2013.

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

The cash provided from (used in) financing activities for the three-month period ending June 30, 2014 and June 30, 2013 was $193.70 million and $(0.88) million respectively. During the three-month period ending June 30, 2014, cash from financing activities was primarily derived from proceeds from incremental senior secured term loan and mezzanine debt financing. During the three-month period ended June 30, 2013, the primary use of cash from financing activities was repayments of long-term debt.

The cash provided from (used in) financing activities for the six-month period ending June 30, 2014 and June 30, 2013 was $193.35 million and $22.91 million respectively. During the six-month period ending June 30, 2014, cash from financing activities was primarily derived from proceeds from incremental senior secured term loan and mezzanine debt financing. During the six-month period ended June 30, 2013, cash from financing activities was primarily derived from issuance of debt partially offset by a share buyback of 660,800 shares.

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

The use of cash for investing activities for the three month period ending June 30, 2014 was $(72.40) million as compared to $(10.26) million for the three month period ending June 30, 2013. During the three month period ending June 30, 2014, the key expenditure driving the Corporation’s use of cash for investing activities was the USD$50.0 million deposit in connection with the Rational Group Acquisition. During the three-month period ended June 30, 2013, the key expenditures driving the Corporation’s use of cash for investing activities were: (i) continued investment in development of proprietary technology and gaming content; (ii) deployment of Cadillac Jack revenue producing assets; and (iii) acquisition of brand licensing capabilities.

The use of cash for investing activities for the six month period ending June 30, 2014 was $(48.63) million as compared to $(18.65) million for the six month period ending June 30, 2013. During the six month period ending June 30, 2014, the key expenditure driving the Corporation’s use of cash for investing activities was (i) the USD$50.0 million deposit in connection with the Rational Group Acquisition; (ii) the acquisition of Diamond Game for USD$18 million; (iii) continued additions to property and equipment related to deployment of Cadillac Jack revenue producing assets; offset by proceeds of sale of WagerLogic of $52,500,000. During the six-month period ended June 30, 2013, the key expenditures driving the Corporation’s use of cash for investing activities were: (i) continued investment in development of proprietary technology and gaming content; (ii) deployment of Cadillac Jack revenue producing assets; and (iii) acquisition of brand licensing capabilities.

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

These consolidated financial statements were prepared on a going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. A wholly owned subsidiary is an entity over which the Corporation has control, where control is defined as the power to govern financial and operating policies. On consolidation, all significant inter-entity transactions and balances have been eliminated. As at June 30, 2014, the consolidated financial statements included 58 wholly owned subsidiaries.

ASSOCIATES

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NON-CURRENT ASSETS HELD FOR SALE

REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Participation leases and arrangements

Software Licensing

Hosted Casino

Revenues from Hosted Casino are recognized as the services are performed, on a daily basis, at the time of the gambling transactions.

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Transactions and balances

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Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling
MXN		Mexican Peso
SEK		Swedish Krona

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

OPERATING SEGMENTS

FINANCIAL INSTRUMENTS

Financial assets

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). No financial assets are classified as fair value through profit or loss.

Available-for-sale

Held-to-maturity and loans and receivables

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Impairment

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

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PROPERTY AND EQUIPMENT


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%
INTANGIBLE ASSETS
Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease
ACQUISITION-RELATED INTANGIBLES
Software Technology	Straight-line	5 years
Customer Relationships	Straight-line	15 years

GOODWILL

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

TAXATION

Current tax

Deferred tax

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STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity-settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

LEASES

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 19). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.84 million CAD), of which (i) €0.67 million ($0.98 million CAD) is recorded in Provisions (see note 19); and (ii) €3.33 million ($4.86 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($10.67 million CAD), of which (i) USD$3.64 million ($3.88 million CAD) is recorded in Provisions (see note 19); (ii) USD $4.39 million ($4.68 million CAD) is recorded in accounts payable and accrued liabilities; and (iii) USD $1.97 million ($2.11 million CAD) was paid.

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ROYALTIES

The Corporation licenses various royalty rights from several owners of intellectual property rights. These rights are used to produce games for use in Hosted Casino and Branded Games. Generally, the arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight-line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense.

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at June 30, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post-tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at June 30, 2014, was 12.00%. As at June 30, 2014, there was no need for impairment.

Impairment of other long-lived assets

The key assumptions utilized in the determination of future cash flows represent Management’s best estimate of the range of economic conditions relating to the CGU, and are based on historical experience, economic trends, and communications with other key stakeholders of the Corporation. These key assumptions include the revenue growth rate, EBITDA¹ margin as a percentage of revenues, capital expenditures as a percentage of revenues, and the inflation growth rate. Significant changes in the key assumptions utilized in the determination of future cash flows could result in an impairment charge or reversal of an impairment loss. As at June 30, 2014 and June 30, 2013, there was no need for an impairment charge.

Stock-based compensation and warrants

Inventory write-down

Research and development investment tax credits

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

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The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period. As at June 30, 2014 a valuation allowance of $5,070,481 (2013 – $4,314,532) was recorded.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.84 million CAD), of which (i) €0.67 million ($0.98 million CAD) is recorded in Provisions (see note 19); and (ii) €3.33 million ($4.86 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$10 million ($10.67 million CAD), of which (i) USD$3.64 million ($3.88 million CAD) is recorded in Provisions (see note 19); (ii) USD $4.39 million ($4.68 million CAD) is recorded in accounts payable and accrued liabilities; and (iii) USD $1.97 million ($2.11 million CAD) was paid.

JUDGMENTS

Finance leases

Deferred Development Costs

Estimated useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

Change in Accounting Policies

Interests in Other Entities

The Corporation have adopted the following five standards applying to interests in other entities as at January 1, 2013:

IFRS 10, Consolidated Financial Statements;

IFRS 11, Joint Arrangements;

IFRS 12, Disclosure of Interests in Other Entities;

IAS 27, Separate Financial Statements (as amended in 2011); and

IAS 28, Investments in Associates and Joint Ventures (as amended in 2011).

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IFRS 13, Fair Value Measurement

IFRS 13 defined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity-specific measurement, so assumptions that market participants would use should be applied in measuring fair value.

IAS 1, Presentation of Financial Statements

Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

Off Balance Sheet Arrangements

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $22,800,000. The minimum annual payments are as follows:


	$
Within one year		11,757,000
Later than one year but not later than 5 years		10,957,000
More than 5 years		86,000

OUTSTANDING SHARE DATA

As at August 14, 2014, the Corporation had a total of 130,432,275 common shares issued and outstanding, 9,172,532 options issued under the Corporation’s stock option plan, and 5,490,885 share purchase warrants issued and outstanding.

BUSINESS RISKS AND UNCERTAINTIES

The Corporation’s current principal risks and uncertainties as identified by Management are described below:

•

The manufacture and distribution of gaming solutions is subject to extensive scrutiny and regulation at all levels of government;

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•

The Corporation’s ability to make scheduled payments on or to refinance its debt obligations and to make distributions to enable it to service its debt obligations depends on its financial and operating performance. If the Corporation’s cash flows and capital resources are insufficient to fund its debt service obligations, it may be forced to reduce or delay activities and capital expenditures, sell assets, seek additional capital, or restructure or refinance its indebtedness;

•

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•

The Corporation is heavily dependent on the gaming industry. A decline in demand for the Corporation’s products in the gaming industry could adversely affect its business;

•

A more comprehensive list of the risks and uncertainties affecting Amaya can be found in its most recent Annual Information Form filed with the Canadian Securities Regulatory Authorities at www.sedar.com. Additionally, risk factors related to the Corporation’s Acquisition of Rational Group subsequent to quarter end are included in Amaya’s Management Information Circular dated June 30, 2014 and available on www.sedar.com. Investors are urged to consult such risk factors.

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Cautionary Note Regarding Forward Looking Statements

Further Information

Additional information on the Corporation, including the Annual Information Form, may be obtained on SEDAR at www.sedar.com.

Montreal, Quebec

August 14, 2014

(Signed) “Daniel Sebag”

Daniel Sebag, CPA, CA

Chief Financial Officer

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EX-99.34

Exhibit 99.34

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David Baazov, Chief Executive Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended June 30, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2014 and ended on June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 14, 2014

/s/ David Baazov

David Baazov

Chief Executive Officer

- 2 -

EX-99.35

Exhibit 99.35

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Daniel Sebag, Chief Financial Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended June 30, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2014 and ended on June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 14, 2014

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

- 2 -

EX-99.36

Exhibit 99.36

LOGO


TABLE OF CONTENTS	Consolidated Financial Statements (Unaudited)	1
	Consolidated Statements of Financial Position	1
	Consolidated Statements of Changes in Equity	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Consolidated Statements of Cash Flows	4

	Notes to Consolidated Financial Statements	5

	1. Nature of business	5

	2. Private Placement	6

	3. Summary of significant accounting policies	6

	4. Recent Accounting Pronouncements	21

	5. Cash and cash equivalents	22

	6. Investment tax credits receivable	22

	7. Accounts receivable	23

	8. Inventories	23

	9. Receivable under finance lease	23

	10. Restricted cash	24

	11. Investments	24

	12. Goodwill and intangible assets	27

	13. Property plant and equipment	28

	14. Income taxes	29

	15. Credit facility	30

	16. Accounts payable and accrued liabilities	30

	17. Provisions	31

	18. Customer deposits	32

	19. Long-term debt	32

	20. Equipment Financing	36

	21. Commitments	37

	22. Share capital	37

	23. Contributed surplus	38

	24. Financial instruments	41

	25. Fair value	43

	26. Capital Management	43

	27. Geographic information	44

	28. Statement of cash-flows	45

	29. Related party transactions	45

	30. Revenues	45

	31. Segmented information	46

	32. Discontinued operations	46

	33. Business Combination	48

	34. Expenses Classified By Nature	51

	35. Net earnings per share	52

	36. Sale of WagerLogic Malta Holdings Ltd.	52

LOGO

Consolidated Financial Statements (Unaudited)

Consolidated Statements of Financial Position


	September 30, 2014 $000’s			December 31, 2013 $000’s

ASSETS

Current

Cash and cash equivalents (note 5)		388,239			93,640
Restricted cash (note 10)		108,640			—
Investment tax credits receivable (note 6)		176			112
Accounts receivable (note 7)		128,324			47,460
Income tax receivable		8,687			520
Inventories (note 8)		9,560			7,595
Current maturity of receivable under finance lease (note 9)		4,095			4,865
Prepaid expenses and deposits		43,352			4,174
Investments (note 11)		368,910			—
Assets classified as held for sale		—			38,369

		1,059,983			196,735

Restricted cash (note 10)		42,945			131
Prepaid expenses and deposits		24,641			—
Investments (note 11)		38,646			10,582
Goodwill and intangible assets (note12)		5,555,588			163,037
Property and equipment (note 13)		97,703			40,521
Deferred development costs (net of accumulated amortization of $5,366,000; 2013 - $3,039,000)		8,722			3,818
Receivable under finance lease (note 9)		6,960			10,004
Investment tax credit receivable long-term (note 6)		12,881			2,673
Deferred income taxes (note 14)		60,969			13,330
Promissory note (note 36)		5,164			—

		6,914,202			440,831


LIABILITIES
Current
Accounts payable and accrued liabilities (note 16)		163,809			27,477
Other payables (note 18)		108,640
Provisions (note 17)		41,967			3,685
Customer deposits (note 18)		676,111			4,453
Income tax payable		19,059			1,763
Deferred revenue		1,377			—
Current maturity of long-term debt (note 19)		19,183			2,388
Current maturity of equipment financing (note 20)		1,395			1,133
Liabilities classified as held for sale		—			4,638

		1,031,541			45,537

Other payables (note 16)		13,233			—
Deferred revenue		1,985			248
Long-term debt (note 19)		3,374,793			192,799
Equipment financing (note 20)		1,233			551
Provisions (note 17)		392,081			1,547
Holdback of purchase price (note 33)		7,840			—
Deferred income taxes (note 14)		33,432			5,802

		4,856,138			246,484

Commitments (note 21)

SHAREHOLDERS’ EQUITY

Share capital (note 22)		1,640,562			220,683
Contributed surplus (note 23)		375,409			4,214
Accumulated other comprehensive income		62,345			8,838
Non-controlling interests		(133	)		—
Retained deficit		(20,119	)		(39,388	)

		2,058,064			194,347

		6,914,202			440,831

See accompanying notes

Approved and authorized for issue on behalf of the Board on November 13, 2014


(Signed) “Daniel Sebag”, Director		(Signed) “David Baazov”, Director
Daniel Sebag, CFO		David Baazov, CEO

Consolidated Statements of Changes in Equity

For the nine month period ended September 30, 2014


	Common share Number			Common share capital Amount $000’s			Convertible preferred shares number		Convertible preferred shares amount $000’s		Contributed Surplus $000’s			Retained Earnings (Deficit) $000’s			Accumulated Other Comprehensive Income $000’s			Non- controlling interest $000’s			Total Shareholders’ Equity $000’s
Balance – January 1, 2013		79,359,759			154,772			—		—		2,351			(10,708	)		(836	)		—			145,579

Deferred income taxes in relation to transaction costs		—			389			—		—		443			—			—			—			832

Issue of equity component of private placement of debt, net of transaction costs		—			—			—		—		2,963			—			—			—			2,963

Issue of common shares in relation to exercised warrants		473,730			2,308			—		—		(397	)		—			—			—			1,911

Issue of common shares in relation to exercised employee stock options		308,400			536			—		—		(176	)		—			—			—			360

Stock based compensation		—			—			—		—		1,436			—			—			—			1,436

Issue of common shares in relation to conversion of convertible debentures		7,572,912			24,612			—		—		(493	)		493			—			—			24,612

Issue of common shares in relations to private placement of equity, net of transaction costs		6,400,000			37,485			—		—		—			—			—			—			37,485

Share repurchase		(660,800	)		(3,244	)		—		—		—			—			—			—			(3,244	)

Net loss		—			—			—		—		—			(22,349	)		—			—			(22,349	)

Other comprehensive income (loss)		—			—			—		—		—			—			4,951			—			4,951


Balance – September 30, 2013		93,454,001			216,858			—		—		6,127			(32,564	)		4,115			—			194,536


Balance – January 1, 2014		94,078,297			220,683			—		—		4,214			(39,388	)		8,838			—			194,347

Deferred income taxes in relation to transaction costs		—			7,301			—		18,219		422			—			—			—			25,942

Issue of common shares in relation to exercised warrants		1,255,980			6,773			—		—		(1,198	)		—			—			—			5,575

Issue of common shares in relation to exercised employee stock options		395,113			1,988			—		—		(430	)		—			—			—			1,558
Issue of equity component of mezzanine subordinated unsecured term loan, net of transaction costs		—			—			—		—		15,436			—			—			—			15,436
Issue of convertible preferred shares in relation to Oldford purchase, net of transaction costs		—			—			1,139,356		1,069,300		—			—			—			—			1,069,300
Issue of common shares in relation to Oldford purchase, net of transaction costs		34,984,025			670,235			—		—		—			—			—			—			670,235

Common share purchase warrants		—			(365,174	)		—		—		365,174			—			—			—			—
Convertible preferred share paid in kind		—			—			11,237		11,237		(11,237	)		—			—			—			—

Stock based compensation		—			—			—		—		3,028			—			—			—			3,028

Net Income		—			—			—		—		—			19,269			—			(133	)		19,136

Other comprehensive income (loss)		—			—			—		—		—			—			53,507			—			53,507

Balance – September 30, 2014		130,713,415			541,806			1,150,593		1,098,756		375,409			(20,119	)		62,345			(133	)		2,058,064

See accompanying notes

LOGO

Consolidated Statements of Comprehensive Income (Loss)


				For the three month period ended September 30,						For the nine month period ended September 30,
	2014 $000’s			2013 $000’s			2014 $000’s			2013 $000’s
Revenues (note 30)		238,958			38,584			319,584			108,809

Expenses
Cost of products (note 34)		679			2,536			6,447			3,370
Selling (note 34)		31,414			3,971			38,531			10,827
General and administrative (note 34)		154,343			25,843			215,962			76,559
Financial (note 34)		15,843			849			25,648			14,371
Acquisition-related costs (note 34)		12,130			845			21,934			1,177

		214,409			34,044			308,522			106,304

Gain (loss) on sale of investments (note 36)		(16,319	)		—			32,734			—
Income (loss) from investments		8,355			—			14,740			—

Earnings (loss) before income taxes		16,585			4,540			58,536			2,505
Current income taxes (note 14)		1,239			7,327			7,963			11,032
Deferred income taxes (note 14)		(11,070	)		(4,426	)		(26,942	)		(4,286	)

Net earnings (loss) from continuing operations		26,416			1,639			77,515			(4,241	)

Discontinued operations
Net loss from discontinued operations (net of tax) (note 32)		(44,029	)		(5,105	)		(58,379	)		(18,107	)

Net Earnings (loss)		(17,613	)		(3,466	)		19,136			(22,348	)

Net earnings (loss) attributable to
Shareholders of Amaya		(17,480	)		(3,466	)		19,269			(22,348	)
Non-controlling interests		(133	)		—			(133	)		—

Net earnings (loss)		(17,613	)		(3,466	)		19,136			(22,348	)

Other Comprehensive Income (loss), net of tax
Foreign currency translation and available for sale gain (loss)		55,762			(2,684	)		53,507			4,950

		55,762			(2,684	)		53,507			4,950

Total Comprehensive Income (loss)		38,149			(6,150	)		72,643			(17,398	)

Basic earnings (loss) per common share (note 35)	$	(0.15	)	$	(0.04	)	$	0.19		$	(0.25	)

Diluted earnings (loss) per common share (note 35)	$	(0.15	)	$	(0.04	)	$	0.18		$	(0.25	)

See accompanying notes

Consolidated Statements of Cash Flows


				For the three month period ended September 30,						For the nine month period ended September 30,
	2014 $000’s			2013 $000’s			2014 $000’s			2013 $000’s

Operating activities
Net earnings (loss)		(17,613	)		(3,466	)		19,136			(22,348	)
Dormant accounts recognized as revenue		(1,494	)		—			(1,494	)		—
Interest accretion on convertible debentures		—			—			—			1,493
Interest accretion on Oldford Group acquisition deferred payment		3,657			—			3,657			—
Interest accretion on long term debt		2,984			832			4,434			2,251
Paid in kind interest		1,973			—			2,954			—
Loss on sale of property and equipment		321			173			620			360
Loss on sale of intangibles		49			9			55			46
Loss on sale of accounts receivable		3,887			—			3,887			—
Sale of previously leased gaming machines and licenses		150			—			742			—
Unrealised loss (gain) on foreign exchange		(7,873	)		38			(8,697	)		(1,155	)
Depreciation of property and equipment		5,169			2,936			12,699			9,451
Amortization of intangible assets		29,294			5,568			40,320			14,011
Amortization of deferred development costs		871			396			2,327			815
Deferred income taxes		(10,836	)		(4,237	)		(26,611	)		(3,672	)
Stock-based compensation		1,493			510			3,028			1,436
Finance lease		811			(10,664	)		2,286			(9,217	)
Loss on discontinued operation, net of cash disposed of		37,856			—			37,856			—
Gain on sale of investments (note 36)		16,320			—			(32,734	)		—
Impairment		9,039			2,131			9,039			2,131

		76,058			(5,774	)		73,504			(4,398	)
Changes in non-cash operating elements of working capital (note 28)		62,864			8,822			61,391			1,295

		138,922			3,048			134,895			(3,103	)


Financing activities
Proceeds from long term debt		2,957,936			—			3,150,238			28,553
Proceeds from convertible preferred share issuance		1,139,356			—			1,139,356			—
Proceeds from common share issuance		699,681			37,485			699,681			37,485
Issuance of capital stock in relation with exercised warrants		3,768			900			5,575			1,911
Issuance of capital stock in relation with exercised employee stock options		958			114			1,557			359
Repurchase of shares		—			—			—			(3,244	)
Transaction costs related to the issuance of long term debt		—			—			—			(384	)
Transaction costs relating to convertible preferred share issuance		(70,056	)		—			(70,056	)		—
Transaction costs relating to common share issuance		(29,446	)		—			(29,446	)		—
Repayment of long-term debt		(869	)		(1,693	)		(2,230	)		(4,969	)

		4,701,328			36,806			4,894,675			59,711


Investing activities
Deferred development costs		(5,056	)		(3,272	)		(9,294	)		(7,513	)
Additions to property and equipment		(5,854	)		(3,957	)		(12,810	)		(11,637	)
Acquired intangible assets		(1,666	)		(6,669	)		(6,554	)		(13,728	)
Proceeds from sale of license and software		—			16			—			60
Proceeds from sale of property and equipment		—			173			58			459
Purchase of investments		(43	)		—			(2,304	)		—
Proceeds from sale of investments (note 36)		—			—			52,500			—
Cash disposed of in discontinued operations		(2,323	)		—			(2,323	)		—
Unrealized gain on marketable securities		(8,716	)		—			(15,248	)		—
Minimum revenue guarantee		(5,081	)		—			(7,251	)		—
Investment in subsidiaries		(4,522,759	)		—			(4,596,901	)		—

		(4,551,498	)		(13,709	)		(4,600,127	)		(32,359	)

Increase (Decrease) in cash and cash equivalents		288,752			26,145			429,443			24,249
Cash, cash equivalents and restricted cash – beginning of period		228,151			36,097			93,771			31,328
Unrealized foreign exchange difference in cash and cash equivalents		22,921			(4,088	)		16,610			2,577

Cash, cash equivalents, and restricted cash – end of period		539,824			58,154			539,824			58,154

See accompanying notes

LOGO

Notes to Consolidated Financial Statements

1. Nature of business

Amaya is a leading provider of technology-based products and services in the gaming industry. Amaya has two reportable segments, Business –to-Consumer (“B2C”) and Business-to-Business (“B2B”). In the third quarter ended September 30, 2014, B2C consisted of Rational Group, while B2B consisted of Amaya’s B2B interactive gaming solutions, land-based gaming solutions, and lottery solutions.

Amaya’s primary business is its business-to-consumer (“B2c”) operation, Rational Group, which was acquired on August 1, 2014. Rational Group operates globally and conducts its principal activities from its headquarters in the Isle of Man. Rational Group owns and operates gaming and related businesses and brands including, among others, PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in major global casinos, and poker programming created for television and online audiences. Rational Group has identified expansion into new markets and adjacent online gaming verticals, notably casino and sportsbook, as growth initiatives.

PokerStars and Full Tilt are Rational Group’s two main brands and they provide distinct online gaming platforms operated under separate brands. Sites operated by PokerStars and Full Tilt collectively hold a majority of the global share of real money poker player liquidity and are among the leaders in play money poker player liquidity (Source: Pokerscout.com, November 3, 2014). Since it launched in 2001, PokerStars has become the first choice of players all over the world and it operates the world’s most popular online poker sites. PokerStars provides desktop client services and products to its customers which include real-money online poker cash games, tournaments and fast fold poker. PokerStars’ mobile apps are among the most popular poker apps on the iOS and Android platforms. PokerStars is home to the largest Internet poker events and the biggest weekly tournaments. More than 115 billion hands have been dealt on PokerStars, which is more than any other site. PokerStars also offers play-money chips for sale and use for online poker play on PokerStars.net and on the Facebook application PokerStars Play on Facebook. In the fourth quarter of 2014, PokerStars.es, the licensed PokerStars site for Spain, expanded its offering by providing table games with plans to launch casino games such as slots in 2015, with similar plans announced for PokerStars.it, the licensed brand in Italy. Full Tilt is a leading gaming brand known for delivering some of the most innovative online poker games in the world. Through its revolutionary poker formats Rush Poker and Adrenaline Rush, Full Tilt Poker offers its players fast-paced, quick-fold gameplay on both desktop and mobile. In 2014, Full Tilt began expanding its game portfolio by offering a variety of online table and casino games on its global sites including a range of single- and multi-player variations of Blackjack and Roulette, online slots and Live Dealer games.

Rational Group employs industry-leading practices in payment security, game integrity, player fund protection, marketing and promotion, customer support and VIP rewards/loyalty programs. It has a robust, scalable technology platform. Rational Group serves a global community, with customer support in almost 30 languages, and has a database of more than 85 million registered players.

Amaya’s B2B business is engaged in the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide, primarily to land-based and online gaming operators and government bodies. These B2B solutions include technology, content and services for interactive gaming and electronic games and game systems for commercial, charitable and tribal casinos, as well as government lotteries and gaming agencies. Amaya developed its portfolio of B2B solutions through both internal development and strategic acquisitions. Amaya’s Board of Directors has approved of a plan to dispose of Amaya’s B2B poker and gaming platform provider, Ongame Network Ltd. (“Ongame”).

2. Private Placement

On July 7, 2014, the Corporation completed a private placement of 32 million common shares at a price of $20 per common share for total gross proceeds of $640 million. The private placement was conducted through a syndicate of underwriters. The net proceeds from the private placement were used as part of the financing for the Oldford Group acquisition. The total transaction costs of the offering, including underwriter’s compensation, amounted to $29,445,552.

On August 1, 2014, the Corporation completed a private placement of 2,984,025 common shares at a price of $20 per common share for total gross proceeds of $59,680,500. The proceeds from the private placement were used as part of the financing for the Oldford Group acquisition. The private placement arose from a commitment from funds or accounts managed or advised by GSO Capital Partners LP or its affiliates (collectively, “GSO”).

On August 1, 2014, the Corporation completed a private placement of 1,139,356 convertible preferred shares at a price of $1,000 per convertible preferred share for total gross proceeds of $1,139,356,000. The net proceeds from the private placement were used as part of the financing for the Oldford Group acquisition. Each convertible preferred share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually. The total transaction costs of the offering, including underwriter’s compensation, amounted to $70,055,803.

3. Summary of significant accounting policies

BASIS OF PRESENTATION

The interim consolidated financial statements have been prepared in accordance with IAS 34, Interim financial reporting, as issued by the IASB. The interim consolidated financial statements follow the same accounting policies as the most recent annual consolidated financial statements. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Financial Report for the fiscal year ended December 31, 2013.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. A wholly owned subsidiary is an entity over which the Corporation has control, where control is defined as the power to govern financial and operating policies. On consolidation, all significant inter-entity transactions and balances have been eliminated. As at September 30, 2014, the consolidated financial statements included 123 wholly owned subsidiaries.

LOGO

ASSOCIATES

Associates are entities over which the Corporation has the power to participate in the financial and operating policy decisions of the entity, but over which it does not have control or joint control. Associates are accounted for using the equity method of accounting.

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Non-Current assets held for sale

A non-current asset (or disposal group) held for sale represents an asset whose carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the sale must be highly probable and the non-current asset (or disposal group) must be available for immediate sale in its present condition. The appropriate level of management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from its classification. Disposal groups and non-current assets held for sale are included in the consolidated statement of financial position at fair value less costs to sell, if this is lower than the previous carrying amount. Once an asset is classified as held for sale or included in a group of assets held for sale, no further depreciation or amortisation is recorded.

Discontinued operations

These are either separate major lines of business or geographical operations that have been sold or classified as held for sale. When held for use, discontinued operations were a cash-generating unit or a group of cash-generating units. They comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Their results are shown separately in the consolidated statement of profit or loss and comparative figures are restated to reclassify them from continuing to discontinued operations.

REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

B2C Revenue

Revenue from the B2C Business is primarily generated from the provision of real money online poker games and tournaments by clients operated by PokerStars and Full Tilt, with the brands generating a scaled commission fee, or “rake”, from ring/cash games and entry fees for tournaments. Revenue is measured at the fair value of the consideration derived. Revenue is only recognised when it is probable that the economic benefits will flow to the B2c Business and the amount of revenue can be measured reliably.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Participation leases and arrangements

Software Licensing

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

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TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Transactions and balances

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

The consideration transferred by the Corporation to acquire control of a subsidiary is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred and equity interests issued by the Corporation, including the fair value of all the assets and liabilities resulting from a deferred payment arrangement. Acquisition related costs are expensed as incurred.

OPERATING SEGMENTS

Amaya has two reportable segments, Business–to-Consumer (“B2C”) and Business-to-Business (“B2B”). In the third quarter ended September 30, 2014, B2C consisted of Rational Group, while B2B consisted of Amaya’s B2B interactive gaming solutions, land-based gaming solutions, and lottery solutions.

Amaya’s primary business is its business-to-consumer (“B2C”) operation, Rational Group, which was acquired on August 1, 2014. The Corporation’s operating segments are organized around the markets they serve (B2C and B2B) serve and are reported in a manner consistent with the internal reporting provided to the Chairman and Chief Executive Officer, the Corporation’s chief operating decision-maker. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses relating to transactions with other components of the Corporation.

FINANCIAL INSTRUMENTS

Financial assets

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). The Corporation’s investment in Intertain is classified as fair value through profit or loss.

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Available-for-sale

Held-to-maturity and loans and receivables

Impairment

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

The Corporation’s compound financial instruments comprise of a mezzanine subordinated unsecured term loan which grants the lenders, in relation to the Mezzanine Facility, 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD$19.17 at any time up to a period ending 10 years after the closing date. The liability component of the non-convertible debentures is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The Corporation has determined the fair value of the liability component. Then, the proceeds were allocated between the liability and the equity components using the residual method. Any directly attributable transaction costs are allocated to the liability and the warrants in proportion to their initial carrying amounts.

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

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Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

PROPERTY AND EQUIPMENT


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%
Land and building	Straight-line	25 years

INTANGIBLE ASSETS


Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease

ACQUISITION-RELATED INTANGIBLES


Software Technology	Straight-line	5 years
Customer Relationships	Straight-line	15 years
Brands	N/A	Indefinite useful life

GOODWILL

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

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The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

TAXATION

Current tax

Deferred tax

STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity-settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

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LEASES

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 17). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.66 million CAD), of which (i) €0.67 million ($0.96 million CAD) is recorded in Provisions (see note 17); and (ii) €3.33 million ($4.70 million CAD) was paid.

The acquisition of Oldford includes a contingent consideration of USD$400 million which shall be subject to adjustment, payable on February 1, 2017, based upon the occurrence of certain events. The Corporation has estimated that contingent consideration of USD$ 400 million (CAD$ 448 million) will be payable on February 1, 2017. The fair value of the contingent consideration of USD$ 346 million (CAD$ 391 million) is recorded in Provisions (see note 17) and was calculated using a 6% discount rate, equivalent to the discount rate negotiated by the parties in case of early payment of the contingent consideration.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$24.81 million ($27.78 million CAD), of which (i) USD$13.75 million ($15.40 million CAD) is recorded in Provisions (see note 17); (ii) USD $4.58 million ($5.13 million CAD) was offset against the promissory note of $10 million CAD; and (iii) USD $6.48 million ($7.25 million CAD) was paid.

ROYALTIES

The Corporation licenses various royalty rights from several owners of intellectual property rights. Generally, the arrangements require material prepayments of minimum guaranteed amounts which have been recorded as prepayments in the consolidated statements of financial position. These prepaid amounts are amortized over the life of the arrangement as gross revenue is generated or on a straight-line basis if the underlying games are expected to have an effective royalty rate greater than the agreed amount. The amortization of these amounts is recorded as royalty expense.

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

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ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at September 30, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post-tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at September 30, 2014, was 12.00%. As at September 30, 2014, there was no need for impairment.

Impairment of other long-lived assets

The key assumptions utilized in the determination of future cash flows represent Management’s best estimate of the range of economic conditions relating to the CGU, and are based on historical experience, economic trends, and communications with other key stakeholders of the Corporation. These key assumptions include the revenue growth rate, EBITDA¹ margin as a percentage of revenues, capital expenditures as a percentage of revenues, and the inflation growth rate. Significant changes in the key assumptions utilized in the determination of future cash flows could result in an impairment charge or reversal of an impairment loss. As at September 30, 2014 and September 30, 2013, there was no need for an impairment charge.

Stock-based compensation and warrants

Research and development investment tax credits

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period. As at September 30, 2014 a valuation allowance of $5,574,000 (2013 – $4,314,532) was recorded.

JUDGMENTS

Finance leases

Deferred Development Costs

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Estimated useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

4. Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

The IASB also issued new requirements in IFRS 9 to address the problem of volatility in profit or loss arising from an issuer choosing to measure its own debt at fair value (i.e., the “own credit” problem).

The IASB added to IFRS 9 impairment requirements related to the accounting for expected credit losses on an entity’s financial assets and commitments to extend credit.

An entity shall apply this Standard retrospectively for annual periods beginning on or after January 1, 2018 with early adoption permitted. The impairment provisions of IFRS 9 will not however be available for earlier application by those entities reporting under Canadian GAAP until the necessary due process, translation and publication processes have been completed by the AcSB.

IFRS 15, REVENUES FROM CONTRACTS WITH CUSTOMERS

The FASB and IASB (the Boards) have issued converged standards on revenue recognition. This new IFRS affects any entity using IFRS that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. This IFRS will supersede the revenue recognition requirements in IAS 18 and most industry-specific guidance.

•

Step 1: Identify the contract(s) with a customer.

•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

An entity shall apply this Standard for annual reporting periods beginning on or after January 1, 2017. Earlier application is permitted. IFRS 15 will not however be available for earlier application by those entities reporting under Canadian GAAP until the necessary due process, translation and publication processes have been completed by the AcSB.

5. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include the following:


	September 30, 2014 $000’s		December 31, 2013 $000’s
Cash in bank		388,239		93,640

		388,239		93,640

As at September 30, 2014, an amount of $206,737,000 is reserved to settle customer deposits.

6. Investment tax credits receivable


	September 30, 2014 $000’s		December 31, 2013 $000’s
Research and development investment tax credits
2009		1,372		1,363
2010		128		128
2011		1,729		217
2012		2,436		160
2013		3,109		917
2014		4,283		—

		13,057		2,785

Investment tax credit receivable current		176		112

Investment tax credit receivable long-term		12,881		2,673

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7. Accounts receivable

The Corporation’s trade accounts receivable include the following:


	September 30, 2014				December 31, 2013
	Amount 000’s		CAD equivalent 000’s		Amount 000’s		CAD equivalent 000’s
CAD		7,794		7,794		350		350
USD		53,235		59,631		32,969		35,123
EUR		18,436		26,103		4,214		6,184
GBP		8,827		16,182		604		1,062
OTHER				18,614				4,741

				128,324				47,460

8. Inventories


	September 30, 2014 $000’s		December 31, 2013 $000’s
Raw materials		6,676		6,416
Finished goods		2,884		1,179

		9,560		7,595

The cost of inventory recognized as an expense during the nine month period ended September 30, 2014 was approximately $6,447,000(2013 – $3,370,000). The amount of inventory write-downs recognized as an expense in the cost of products for the same period was $nil (2013 – $nil). In 2014 and 2013 there were no reversals of write-downs from the previous years.

9. Receivable under finance lease

The Corporation’s receivable under finance lease includes the following:


	September 30, 2014 $000’s			December 31, 2013 $000’s
Total minimum lease payments receivable		16,081			18,604
Unearned finance income		(3,438	)		(3,735	)

		12,643			14,869
Allocated impairment loss		(1,588	)		—

Current maturity of receivable under finance lease		4,095			4,865

		6,960			10,004

Finance income from finance leases recognized in revenue for the nine month period ended September 30, 2014 amounted to $603,000 (2013 – $527,000).

The present value of minimum lease payments receivable, unearned finance income and future minimum lease payments receivable under the finance leases are as follows:


	Present Value of Minimum Lease Payments Receivable $000’s		Unearned Finance Income $000’s		Future Minimum Lease Payments Receivable $000’s
2015		4,095		634		4,729
2016		3,857		881		4,738
2017		3,103		1,110		4,213

		11,055		2,625		13,680

10. Restricted cash

Restricted cash held by the Corporation is comprised of the following components:


	September 30, 2014 $000’s
Amount owing to the DOJ* payable August 2015		108,640
Guarantees in connection with licenses held		12,831
Funds in excess of working capital requirements set aside for deferred payment **		29,987
Other		127

Balance at September 30, 2014		151,585
Restricted cash – current		(108,640	)

Restricted cash – long term		42,945

The Purchase Price for the acquisition of Oldford Group is comprised of a USD$4.5 billion payment payable upon closing of the transaction, as well as a deferred payment in the aggregate amount of US$400 million, which, depending upon the occurrence or non-occurrence of certain conditions, may be subject to adjustment.

11. Investments

(a) Investments in quoted instruments – Fair Value Through Profit and Loss

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During the nine month period ended September 30, 2014, the Corporation acquired 550,000 additional common shares of The Intertain Group Limited for a total cost of $2.2 million. An unrealized gain was recorded during the nine month period ended September 30, 2014 on the appreciation of the common share value of the investment ($10.87 CAD on September 30, 2014).


	September 30, 2014 $000’s
At December 31, 2013		9,250
Purchase of common stock		2,200
Unrealized gain on investment		14,997

Balance at September 30, 2014		26,447

(b) Investments in quoted instruments – Available for Sale


At September 30 2014				At September 30 2013
Carrying Amount $000’s	Fair Value $000’s	Gain (loss) in AOCI $000’s		Carrying Amount $000’s		Fair Value $000’s		Gain (loss) in AOCI $000’s
368,910	368,910		85		—		—		—


	September 30, 2014 $000’s
At December 31, 2013		1,332
Share of profit (loss)		(256	)
Contribution during the period		365

Balance at September 30, 2014		1,441

On December 27, 2013, the Corporation acquired a 49% interest in Les Studios Side City Inc., a Canadian corporation operating in Montreal, Quebec as a game development studio. The equity method of accounting is used in measuring this investment. The summarised financial information of the investment as at September 30, 2014 is detailed below and is based on the associate’s financial statements prepared in accordance with IFRS.


Les Studios Side City Inc.	$000’s
Current Assets		852
Non-Current Assets		200
Current Liabilities		188
Non-Current Liabilities		1,487
Net Assets of Associate		(623	)
Ownership Interest in Associate		49	%
Revenue		853
Profit		(523	)
Total Comprehensive Income for the year		(523	)

(d) Investments in unquoted markets – Available for sale


At September 30 2014				At September 30 2013
Carrying Amount $000’s	Fair Value $000’s	Gain (loss) in AOCI $000’s		Carrying Amount $000’s		Fair Value $000’s		Gain (loss) in AOCI $000’s
10,592	10,592		—		—		—		—

(e) Subsidiaries

The composition of the Corporation at the end of the reporting period was as follows.


Region of incorporation and operation	Number of wholly-owned subsidiaries
	2014		2013
Americas		24		19
Europe		93		32
Other		6		4

		123		55

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12. Goodwill and intangible assets

COST


	Software $000’s			Licenses $000’s			Placement fee $000’s			Acquisition- Related Intangibles $000’s			Acquisition- Related Brands $000’s		Goodwill $000’s			Total $000’s
Balance – January 1, 2013		3,039			6,521			—			84,180			—		93,964			187,704
Additions		7,663			5,536			5,537			—			—		—			18,736
Disposals		(60	)		(74	)		—			—			—		—			(134	)
Reclassifications		16			9			—			—			—		—			25
Reclassification to held for sale		(800	)		(209	)		—			(10,826	)		—		(21,247	)		(33,082	)
Translation		405			263			181			6,226			—		7,257			14,332

Balance – December 31, 2013		10,263			12,046			5,718			79,580			—		79,974			187,581

Additions		3,420			3,134			—			—			—		—			6,554
Additions through business combination		792			—			—			1,828,644			514,252		2,977,768			5,321,456
Disposals		(120	)		(905	)		(36	)		—			—		—			(1,061	)
Impairment		(5,069	)		(2,714	)		—			—			—		—			(7,783	)
Discontinued operations		(616	)		—			—			(9,161	)		—		—			(9,777	)
Translation		194			309			303			42,074			10,830		66,965			120,675

Balance – September 30, 2014		8,864			11,870			5,985			1,941,137			525,082		3,124,707			5,617,645

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Software $000’s			Licenses $000’s			Placement fee $000’s			Acquisition- Related Intangibles $000’s			Acquisition- Related Brand $000’s		Goodwill $000’s		Total $000’s
Balance – January 1, 2013		496			2,184			—			4,291			—		—		6,971
Amortization		1,713			2,044			646			14,958			—		—		19,361
Disposals		—			(9	)		—			—			—		—		(9	)
Reclassifications		202			(25	)		—			—			—		—		177
Reclassification to held for sale		(381	)		(78	)		—			(2,206	)		—		—		(2,665	)
Translation		179			46			21			463			—		—		709

Balance – December 31, 2013		2,209			4,162			667			17,506			—		—		24,544

Amortization		2,389			1,793			881			35,257			—		—		40,320
Disposals		(70	)		(240	)		(10	)		—			—		—		(320	)
Impairment		(1,523	)		(1,127	)		—			—			—		22		(2,628	)
Discontinued operations		(572	)		—			—			(1,179	)		—		—		(1,751	)
Translation		23			74			58			1,737			—		—		1,892

Balance – September 30, 2014		2,456			4,662			1,596			53,321			—		22		62,057

CARRYING AMOUNT

Software
$000’s

Licenses
$000’s

Placement
fee
$000’s

Acquisition-
Related
Intangibles
$000’s

Acquisition-
Related
Brand
$000’s

Goodwill
$000’s

Total
$000’s

At December 31, 2013

8,054

7,884

5,051

62,074

—

79,974

163,037

At September 30, 2014

6,408

7,208

4,389

1,887,816

525,082

3,124,685

5,555,588

A number of B2B-related intangible assets have been determined to be redundant to the Company’s core operations, notably its B2C Business. Impairment losses in the amount of $5,155,000 (2013 - $nil) were therefore recognized during the nine month period ended September 30, 2014.

13. Property plant and equipment

COST


	Revenue-Producing Assets $000’s			Machinery and Equipment $000’s			Furniture and Fixtures $000’s			Computer Equipment $000’s			Land and Building $000’s		Total $000’s
Balance – January 1, 2013		29,376			3,332			3,195			6,783			—		42,686
Additions		14,203			51			707			2,469			—		17,430
Transfers to inventory		(2,104	)		—			—			—			—		(2,104	)
Disposals		(1,177	)		(17	)		(140	)		(235	)		—		(1,569	)
Reclassifications		2,459			(2,378	)		—			—			—		81
Translation		1,631			85			263			301			—		2,280

Balance – December 31, 2013		44,388			1,073			4,025			9,318			—		58,804

Additions through business combination		5,364			104			8,572			15,068			31,236		60,344
Additions		10,179			42			543			2,046			—		12,810
Disposals		(1,969	)		(17	)		(1,117	)		(778	)		—		(3,881	)
Reclassifications		(1,734	)		1			16			334			—		(1,383	)
Discontinued operations		—			—			(240	)		(1,035	)		—		(1,275	)
Impairment		(3,691	)		(828	)		—			—			—		(4,519	)
Translation		1,538			8			306			245			658		2,755

Balance – September 30, 2014		54,075			383			12,105			25,198			31,894		123,655

ACCUMULATED AMORTIZATION AND IMPAIRMENTS


	Revenue-Producing Assets $000’s			Machinery and Equipment $000’s			Furniture and Fixtures $000’s			Computer Equipment $000’s			Land and Building $000’s		Total $000’s
Balance – January 1, 2013		3,606			488			700			1,218			—		6,012
Depreciation		9,794			137			948			1,855			—		12,734
Transfers to inventory		(663	)		—			—			—			—		(663	)
Disposals		(281	)		(3	)		(83	)		—			—		(367	)
Reclassifications		199			(118	)		—			—			—		81
Impairment		361			—			—			—			—		361
Translation		52			5			84			(16	)		—		125

Balance – December 31, 2013		13,068			509			1,649			3,057			—		18,283

Depreciation		9,490			107			872			2,004			226		12,699
Disposals		(1,309	)		(17	)		(792	)		(425	)		—		(2,543	)
Reclassifications		(162	)		—			(7	)		—			—		(169	)
Discontinued operations		—			—			(54	)		(151	)		—		(205	)
Impairment		(1,735	)		(488	)		—			—			—		(2,223	)
Translation		216			1			56			(168	)		5		110

Balance – September 30, 2014		19,568			112			1,724			4,317			231		25,952

CARRYING AMOUNT

Revenue-Producing
Assets
$000’s

Machinery and
Equipment
$000’s

Furniture and
Fixtures
$000’s

Computer
Equipment
$000’s

Land and
Building
$000’s

Total
$000’s

At December 31, 2013

31,320

564

2,376

6,261

—

40,521

At September 30, 2014

34,507

271

10,381

20,881

31,663

97,703

A number of B2B-related tangible assets have been determined to be redundant to the Company’s core operations, notably its B2C Business. Impairment losses in the amount of $2,296,000 (2013 - $nil) were therefore recognized during the nine month period ended September 30, 2014.

LOGO

14. Income taxes

Income taxes reported differ from the amount computed by applying the statutory rates to incomes (loss) before income taxes. The reasons are as follows:


	September 30, 2014 $000’s			September 30, 2013 $000’s
Statutory income taxes		15,746			(2,493	)
Non-taxable income		(36,162	)		(4,325	)
Non-deductible expenses		13,107			6,187
Differences in effective income tax rates in foreign jurisdictions		(20,504	)		6,320
Non-capital losses for which no tax benefit has been recorded		8,834			1,057

Current and deferred income taxes		(18,979	)		6,746

Significant components of the Corporation’s deferred income tax balance at September 30, 2014 were as follows:


	Deferred development costs $ 000’s			Property & Equipment $000’s			Share & Debt issuance costs $000’s			Finance Lease $000’s			Intangibles $000’s			Tax Losses $000’s			Investment tax credits $000’s			Foreign tax credits $000’s			Other $000’s			Total $000’s
At January 1, 2013		351			4,442			1,247			(4,024	)		(19,956	)		14,102			(1	)		10,772			352			7,285
Charged / (credited) to the income statement		(1,407	)		(1,827	)		(708	)		247			3,803			(2,437	)		—			2,882			—			553
Charged / (credited) directly to balance sheet		—			—			—			(2,322	)		—			(2,792	)		—			—			986			(4,128	)
Charged / (credited) to other comprehensive income		(77	)		55			2			49			(1,528	)		363			—			850			91			(195	)
Charged / (credited) directly to equity		—			—			710			—			—			160			—			—			—			870
Reclassification to asset held for sale		1,522			—			—			—			1,621			—			—			—			—			3,143

Reclassification		—			(1,327	)		16			3,850			(2,172	)		(1,258	)		1			(145	)		1,035			—

At December 31, 2013		389			1,343			1,267			(2,200	)		(18,232	)		8,138			—			14,359			2,464			7,528

Charged / (credited) to the income statement		(79	)		3,376			114			1,501			16,681			3,950			—			929			470			26,942
Charged / (credited) directly to balance sheet		—			—			—			1,801			—			(4,294	)		—			—			(453	)		(2,946	)
Charged / (credited) to other comprehensive income		—			(2	)		(176	)		129			(668	)		57			—			795			163			298
Charged / (credited) directly to equity		—			—			25,942			—			—			—			—			—			—			25,942
Discontinued operations		—			—			—			—			2,111			—			—			—			—			2,111
Acquisition of subsidiary		—			(155	)		—			—			(33,145	)		962			—			—			—			(32,338	)

At September 30, 2014		310			4,562			27,147			1,231			(33,253	)		8,813			—			16,083			2,644			27,537

As at September 30, 2014, the Corporation had Federal and Provincial non-capital losses of approximately $35,201,000 and $32,206,000 respectively (December 31, 2013 – $25,879,000; $19,549,000) that may be applied against earnings of future years, not later than 2034. The Corporation’s foreign subsidiaries have non-capital losses of approximately $52,846,000 (December 31, 2013 - $50,897,000) that may be applied against earnings in future years, no later than 2032. The possible income tax benefit of $15,667,000 (December 31, 2013 – $29,752,000) of the non-capital losses has been recognized in the accounts.

As at September 30, 2014, the Corporation had undeducted research and development expenses of approximately $2,493,000 federally and $4,233,000 provincially (December 31, 2013 – $2,216; $3,925,000) with no expiration date. The deferred income tax benefits of these deductions are recognized in the accounts.

15. Credit facility

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. The revolving demand credit facility can be used for general working capital purposes. The facility bears interest at the bank’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances (September 30, 2014 - $nil), the Corporation has provided the Bank a first ranking security interest over all of the movable/personal property of the Corporation.

On August 1 2014, an additional credit facility of USD $100 million five-year first lien revolving credit facility priced at Libor plus 4.00% was obtained. The credit facility can be used for general working capital purposes.

As at September 30, 2014, the outstanding amount of the revolving demand credit facility is $nil (December 31, 2013- $nil) and the outstanding amount of the first lien revolving credit facility is $nil.

Under the terms of the credit facility arrangement with the Bank, the Corporation is required amongst other conditions, to maintain at all times certain ratios and a minimum level of net worth. As at September 30, 2014 and December 31, 2013, the Corporation was not in breach of the terms of the credit facility agreements.

16. Accounts payable and accrued liabilities

The Corporation’s accounts payable include the following:


	September 30, 2014				December 31, 2013
	Amount 000’s		CAD equivalent 000’s		Amount 000’s		CAD Equivalent 000’s
CAD		11,400		11,400		3,116		3,116
USD		95,555		107,026		12,365		13,150
EURO		19,127		27,176		1,735		2,545
GBP		6,316		13,975		744,064		1,310
OTHER				4,232				7,356

Total current accounts payable and accrued liabilities				163,809				27,477

LOGO

The Corporation’s other current payable relates to settlement with the U.S. Department of Justice (DOJ) Southern District of New York, announced in July 2012. As part of the settlement agreement, PokerStars also acquired the assets of its primary competitor at the time, Full Tilt Poker, and committed to the full reimbursement of Full Tilt Poker customers inside and outside the United States. The funds required to settle the payment are included in current restricted cash (see note 10).


	September 30, 2014				December 31, 2013
	Amount 000’s		CAD equivalent 000’s		Amount 000’s		CAD Equivalent 000’s
USD		97,000		108,640		—		—

Total current other payable				108,640		—		—

The Corporation’s other long term payables include the following:


	September 30, 2014				December 31, 2013
	Amount 000’s		CAD equivalent 000’s		Amount 000’s		CAD Equivalent 000’s
CAD		2,317		2,317		—		—
USD		9,746		10,916		—		—

Total long term other payables				13,233		—		—

17. Provisions

The provisions in the statement of financial position include, among other items, the provision for jackpots, the provision of deferred payment in connection with the acquisitions of Ongame and Oldford (see note 10) and the minimum revenue guarantee in connection with the sale of WagerLogic Ltd (see note 36). The carrying amounts and the movements in the provision are as follows:


	September 30, 2014 $000’s			December 31, 2013 $000’s
Opening balance		5,232			12,800
Provision acquired on business combination		22,392			—
Additional provision for jackpots		2,842			2,270
Additional provision for player bonus		18,652			—
Deferred payment – Oldford Group acquisition		387,115			—
Accretion on deferred consideration – Oldford Group acquisition		3,657			—
Revenue guarantee		27,785			—
Deferred payment – Ongame acquisition		—			(4,875	)
Revenue guarantee utilized		(12,385	)		—
Player bonus utilized		(18,475	)		—
Jackpot provision amounts utilised		(2,760	)		(6,096	)
Translation		(7	)		1,133

Ending balance		434,048			5,232
Short-term portion		(41,967	)		(3,685	)

Long-term portion		392,081			1,547

18. Customer deposits

Customer deposit liabilities relate to player deposits which are held segregated in multiple separate bank accounts from those holding operational funds or working capital. These deposits are included in Current Assets in the Consolidated Statements of Financial Position under Cash and cash equivalents and Investments. Such investments are short-term highly liquid investments that are readily convertible to known amounts of cash, including unrestricted short-term bank deposits originally purchased with maturities of three months or less. Sufficient headroom for player balances to be settled is maintained. Both PokerStars and Full Tilt hold end user’s deposits, along with winnings plus any bonuses, in trust accounts from which money may not be removed if it would result in a shortfall of players’ funds.


	September 30, 2014 $000’s		December 31, 2013 $000’s
Customer cash deposits		586,239		4,453
Frequent Player points		89,872		—

		676,111		4,453

19. Long-term debt

The following is a summary of long-term debt outstanding at September 30, 2014 and December 31, 2013:


	September 30, 2014 $000’s		December 31, 2013 $000’s
Current portion		19,183		2,388
Long-term debt		3,374,793		192,799

		3,393,976		195,187

(a) Subordinated Debt

The Corporation fully repaid to the subordinated debt during the period ended September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $10,000 (2013 – $23,000) in interest.


	September 30, 2014 $000’s		December 31, 2013 $000’s
Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		—		275
Current portion		—		(275	)

		—		—

(b) Non-convertible subordinated debentures

LOGO

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.


	September 30, 2014 $000’s
Fair Value of Liability component		26,844
Fair Value of Equity component		3,156
Face Value		30,000

Transaction costs		1,831

During the nine month period ended September 30, 2014, the Corporation incurred $2,841,000 (2013 – $2,237,000) in interest of which $1,158,000 relates to interest accretion.

The following table reflects movements recognized during the nine month period ended September 30, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		30,000		25,206		2,963
Exercise of warrants		—		—		(1,442	)
Accretion of liability component (effective interest of 13.60%)		—		2,395		—

Balance at September 30, 2014		30,000		27,601		1,521

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$000’s
2015		—
2016		30,000

On December 20, 2013 Cadillac Jack entered into an agreement for the refinancing of its credit facilities. Under this agreement, Cadillac Jack has access to term loans in an aggregate principal amount of up to USD$160 million (the “Credit Facilities”). The Credit Facilities replaced the existing USD$110 million non-convertible senior secured term loan secured by Cadillac Jack’s assets that was made available to finance the acquisition of Cadillac Jack by Amaya, as of November 5, 2012 (the “2012 Loan”). The Credit Facilities were used to fully repay the outstanding balance on the 2012 Loan, as well as related fees and expenses, and to be used to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. On May 15, 2014, Cadillac Jack obtained an incremental USD$80 million term loan to Cadillac Jack’s existing USD$160 million senior term loan for the purpose of financing working capital expenses and general corporate purposes of the Corporation. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”). The Senior Facility will mature over a 5-year term from the closing date and is secured by the assets of Cadillac Jack and its subsidiaries. The Senior Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios for which the Corporation was in compliance with as of September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $14,785,000 (2013 - $7,585,000) in interest of which $424,000 relates to interest accretion.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		267,423			170,176
Transaction costs		(4,375	)		(1,947	)
Accretion (effective interest rate of 9.90%)		437			13
Translation		(96	)		(64	)
Current portion (net of unamortized transaction costs of $740,000)		(1,950	)		(1,702	)

		261,439			166,476

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,690
2016		2,690
2017		2,690
2018		2,690
2019		256,663

(d) Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

The Corporation fully repaid the other long-term debt during the nine months ended September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $13,000 (2013 – $29,000) in interest.


	September 30, 2014 $000’s		December 31, 2013 $000’s
Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		—		411
Current maturity		—		(411	)

		—		—

(e) Mezzanine subordinated unsecured term loan

On May 15, 2014 Cadillac Jack obtained mezzanine debt (the “Mezzanine Facility”) in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash. The Mezzanine Facility will mature over a 6-year term from the closing date and is unsecured. Amaya has provided an unsecured guarantee of the obligations under the Mezzanine Facility of Cadillac Jack in favour of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios which the Corporation was in compliance with as of September 30, 2014. The Corporation has agreed to grant the lenders, in relation to the Mezzanine Facility, 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD$19.17 at any time up to a period ending 10 years after the closing date (see note 23).

During the nine month period ended September 30, 2014, the Corporation incurred $5,485,000 (2013 - nil) in interest of which $390,000 relates to interest accretion and $2,954,000 relates to paid in kind interest.

LOGO


	September 30, 2014 $000’s
Fair Value of Liability component		96,223
Fair Value of Equity component		15,857
Face Value		112,080

Transaction costs		2,978

The following table reflects movements recognized during the nine month period ended September 30, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		112,080		93,667		15,436
Paid In Kind Interest		—		2,954		—
Accretion of liability component (effective interest of 16.16%)		—		399		—
Translation		—		72		—

Balance at September 30, 2014		112,080		97,092		15,436

(f) First and second lien term loans

On August 1, 2014 Amaya completed the acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited which was partly financed through the issuance of long term debt, allocated as follows:

(i)

a USD$1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor

During the nine month period ended September 30, 2014, the Corporation incurred $15,996,000 (2013 - nil) in interest of which $1,400,000 relates to interest accretion in relation to the USD first lien term loan.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		1,960,000			—
Transaction costs		(69,868	)		—
Accretion (effective interest rate of 5.64%)		1,400			—
Translation		(1,443	)		—
Current portion (net of unamortized transaction costs of $8,949,000)		(10,651	)		—

		1,879,438			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		19,600
2016		19,600
2017		19,600
2018		19,600
2019+		1,881,600

During the nine month period ended September 30, 2014, the Corporation incurred $2,543,000 (2013 - nil) in interest of which $192,000 relates to interest accretion in relation to the EUR first lien term loan.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		282,867			—
Transaction costs		(9,632	)		—
Accretion (effective interest rate of 5.84%)		192			—
Translation		251			—
Current portion (net of unamortized transaction costs of $1,169,000)		(1,659	)		—

		272,019			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,829
2016		2,829
2017		2,829
2018		2,829
2019+		271,551

(ii)

a USD$800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor

During the nine month period ended September 30, 2014, the Corporation incurred $11,700,000 (2013 - nil) in interest of which $750,000 relates to interest accretion.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		896,000			—
Transaction costs		(53,512	)		—
Accretion (effective interest rate of 5.64%)		750			—
Translation		(1,111	)		—
Current portion (net of unamortized transaction costs of $4,923,000)		(4,923	)		—

		837,204			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		896,000

20. Equipment Financing

During the nine month period ended September 30, 2014, the Corporation incurred $95,000 (2013 – $113,000) in interest.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Agreements bear interest at between 1.11% and 17.89% per annum, all maturing by 2018 and payable in monthly instalments of $156,000 including interest		2,628			1,684
Current maturity		(1,395	)		(1,133	)

		1,233			551

LOGO

Principal repayments over the next four years amount to the following:


	$000’s
2015		1,395
2016		711
2017		479
2018		43

		2,628

21. Commitments

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $93,570,000.


	$000’s
Within one year		18,259
Later than one year but not later than 5 years		33,934
More than 5 years		41,377

22. Share capital

During the nine month period ended September 30, 2014:

•

the Corporation issued 1,255,980 common shares for cash consideration of $5,575,000 as a result of the exercise of warrants. Initially the 1,255,980 warrants were valued at $1,197,836 using the Black-Scholes valuation model. On the exercise of the warrants, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 395,113 common shares for cash consideration of $1,558,000 as a result of the exercise of stock options. Initially the 395,113 stock options were valued at $430,000 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 1,139,356 convertible preferred shares for cash consideration of $1,139,356,000 which was used to finance a portion of the Oldford Group acquisition. Each convertible preferred share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually. The accretion to the conversion ratio during the nine month period ended September 30, 2014 was 11,237 convertible preferred shares.

•

the Corporation issued 34,984,025 common shares for cash consideration of $699,681,000 which was used to finance a portion of the Oldford Group acquisition.

During the year ended December 31, 2013:

•

the Corporation issued 932,696 common shares for cash consideration of $1,801,000 as a result of the exercise of stock options. Initially the 932,696 stock options were valued at $798,000 using the Black-Scholes valuation model. On the exercise of the stock options, the value originally allocated to contributed surplus was reallocated to the common shares.

•

the Corporation issued 7,572,912 common shares in relation to conversion of convertible debentures at the conversion price of $3.25.

•

the Corporation purchased 660,800 common shares for cancellation for $3,244,000. On the cancellation of common shares, $1,880,000 was allocated to contributed surplus.

•

the Corporation completed a private placement offering of 6,400,000 common shares at a price of $6.25 per common share for aggregate gross proceeds of $40,000,000 (see note 2).

23. Contributed surplus

STOCK OPTIONS

The aggregate number of common shares of the Corporation reserved for issuance on the exercise of all stock options granted under the Plan at any time cannot exceed 10% of the issued and outstanding common shares of the Corporation at any such time. The exercise price of the share options shall not be less than the discounted market price of the common shares of the Corporation on the TSX. The options have a maximum term of five years. Options issued from 2012 onwards vest in equal increments over four years. Options issued in prior years vested in equal increments over two years.

The following table provides information about outstanding stock options at September 30, 2014:


	For the nine month period ended September 30, 2014					For the year ended December 31, 2013
	Number of options			Weighted average exercise price $		Number of options			Weighted average exercise price $
Beginning balance		5,124,379			3.75		5,447,800			3.00
Transactions during the period:
Issued		3,721,300			24.73		997,500			6.39
Exercised		(395,113	)		3.94		(932,696	)		1.93
Expired / forfeited		(177,481	)		5.17		(388,225	)		4.32

Ending balance		8,273,085			13.15		5,124,379			3.75

During the nine month period ended September 30, 2014, the Corporation granted 3,721,300 stock options to employees to purchase common shares.

The stock options are exercisable at prices ranging from $1.00 to $35.05 per share and have a weighted average contractual term of 3.51 years.

LOGO


	Outstanding options				Exercisable options
Exercise prices $	Number of options		Weighted average outstanding maturity period (years)		Number of options		Exercise price $
1.00		1,062,600		0.80		1,062,600		1.00
1.30		50,000		0.95		50,000		1.30
2.16		12,750		1.99		12,750		2.16
2.50		72,500		1.30		72,500		2.50
2.60		65,000		1.25		65,000		2.60
2.71		65,000		1.76		65,000		2.71
2.85		160,000		1.78		160,000		2.85
3.38		40,000		1.66		40,000		3.38
4.20		1,039,850		2.78		498,600		4.20
4.24		1,138,785		3.17		28,693		4.24
4.35		78,750		3.18		11,250		4.35
4.90		15,625		3.28		2,500		4.90
6.00		9,375		3.66		—		6.00
6.05		485,550		3.79		44,175		6.05
6.33		29,000		3.95		6,500		6.33
7.55		227,000		4.22		—		7.55
7.95		600,000		4.25		228,000		7.95
8.43		142,500		4.41		—		8.43
28.65		2,798,800		4.88		—		28.65
31.30		115,000		4.94		—		31.30
35.05		65,000		4.95		—		35.05

		8,273,085		3.51		2,347,568		2.84

The weighted-average share price of options exercised during the nine month period ended September 30, 2014 was $3.94 (2013 – $1.17).

The Corporation recorded a compensation expense of $3,028,000 for the nine month period ended September 30, 2014 (2013 – $1,436,000). The Corporation has $16,277,000 of stock option expense to be recorded in future periods.

The stock options issued during the period ended September 30, 2014 were accounted for at their fair value of $23,712,000, as determined by the Black-Scholes valuation model using the following weighted-average assumptions:


	2014			2013
Expected volatility		60	%		60	%
Expected life		3.75 years			3.75 years
Expected forfeiture rate		0%-17	%		17	%
Risk-free interest rate		1.07	%		1.07	%
Dividend yield		Nil			Nil
Weighted average share price	$	24.73		$	6.04
Weighted average fair value of options at grant date	$	5.08		$	1.80

WARRANTS

A summary of the activity in the Corporation’s issued warrants during the year is presented below:

The following table provides information about outstanding warrants at September 30, 2014:


	For the nine month period ended September 30, 2014					For the year ended December 31, 2013
	Number of warrants			Weighted average exercise price $		Number of warrants			Weighted average exercise price $
Beginning balance		2,594,270			4.62		1,628,000			3.01
Transactions during the period:
Issued		16,750,000			4.59		1,440,000			6.25
Exercised		(1,255,980	)		4.44		(473,730	)		4.03
Expired		—			—		—			—

Ending balance		18,088,290			4.60		2,594,270			4.62


Grant date		Expiry date		Number of warrants		Exercise price
	27-Mar-12		30-Apr-15		598,905		3.00
	07-Feb-13		31-Jan-16		739,385		6.25
	15-May-14		15-May-24		4,000,000		19.17
	1-Aug-14		1-Aug-24		12,750,000		0.01

					18,088,290		4.60

During the nine month period ended September 30, 2014, the Corporation received $5,575,000 for the exercise of 1,255,980 warrants. On the exercise of 1,255,980 warrants, the value of $1,198,000 originally allocated to contributed surplus was reallocated to the share capital.

During the nine month period ended September 30, 2014, 4,000,000 warrants were issued in connection with the Mezzanine subordinated unsecured term loan representing an allocated fair value of $15,436,000. Warrants initially had an exercise price of $15 per common share, which was subsequently adjusted to $19.17 per common share effective as of June 20, 2014, representing the 5-day VWAP of the common shares on the TSX following the announcement of the agreement to acquire the Oldford Group. The warrants may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX. 12,750,000 warrants representing an allocated fair value of $365,174,000 were issued in connection with the Oldford acquisition. Each warrant has an exercise price of $0.01 and may be exercised during a period of 10 years from the date of issuance, and they are not listed on the TSX

During the year ended December 31, 2013, 1,440,000 warrants with an exercise price of $6.25 per common share were issued in connection with the non-convertible subordinated debentures issued by the Corporation, representing an allocated fair value of $3,155,648 (see note 19).

LOGO


	2014			2013
Expected volatility		60	%		60	%
Expected life		11 years			3 years
Expected forfeiture rate		0	%		0	%
Risk-free interest rate		1.17	%		1.07	%
Dividend yield		Nil			Nil
Weighted average fair value of options at grant date	$	28.64		$	2.19

24. Financial instruments

FOREIGN EXCHANGE RISK

The Corporation is mainly exposed to foreign currency fluctuations on its accounts receivable, receivable under finance lease, cash, restricted cash, customer deposits, income tax receivable, income tax payable, and accounts payable and accrued liabilities. As at September 30, 2014, the Corporation’s significant foreign exchange currency exposure on these financial instruments by currency was as follows:

Analysis by currency in Canadian equivalent


	USD $000’s			EUR $000’s			GBP $000’s
Cash		275,159			66,989			11,462
Restricted cash		151,458			113			—
Available for sale investments		321,308			47,601			—
Accounts receivable		59,631			26,103			16,182
Finance Lease		11,056			—			—
Income tax receivable		—			8,525			—
Accounts payable and accrued liabilities		(107,026	)		(27,176	)		(13,975	)
Other payables		(119,556	)		—			—
Income tax payable		(3,783	)		(8,016	)		(930	)
Provisions		(35,274	)		(3,859	)		(3,301	)
Holdback of purchase price		(7,840	)		—			—
Equipment financing		(2,386	)		—			—
Customer deposits		(555,517	)		(113,574	)		(5,101	)

A ten percent increase (decrease) in the strengthening or weakening of the following currencies versus the Canadian dollar at the end of the year would have increased (decreased) net comprehensive income (loss) for the year, all other variables held constant, by:


Currency	10% Increase (Decrease) $000’s
USD		22,634
EUR		(329	)
GBP		434

This exposure is monitored by the Corporation’s reporting system and is reviewed by Management on a monthly basis.

INTEREST RATE RISK

The Corporation is exposed to fair value interest rate risk with respect to its subordinated debt, other long-term debt and convertible debentures which bear a fixed rate of interest. The Corporation is exposed to cash flow interest rate risk on its bank indebtedness and senior secured term loan, which bears interest at variable rates. A one percentage point increase (decrease) in interest rates would have decreased (increased) pre-tax earnings by approximately $6,184,000 in the period, with all other variables held constant. Management monitors movements in the interest rates by reviewing the Bank of Canada prime rate and LIBOR on a quarterly basis.

CREDIT RISK

Details of the Corporation’s accounts receivable were as follows:


	September 30, 2014 $000’s			December 31, 2013 $000’s
Not past due		110,870			31,464
Past due 1-30 days		4,980			4,529
Past due 31-60 days		3,000			1,380
Past due 61-90 days		2,440			3,958
Past due 91-120 days		1,454			437
Past due 121-150 days		901			311
Past due 151-180 days		907			2,370
Past due more than 181 days		5,278			4,505
Allowance for doubtful accounts		(1,506	)		(1,494	)

Outstanding, end of period		128,324			47,460

The Corporation’s maximum exposure to credit risk is equal to the carrying value of accounts receivable as set out on the statement of financial position.

LIQUIDITY RISK

The Corporation believes that future cash flows generated by operations and availability under its borrowing facility will be adequate to meet its financial obligations.

LOGO


	On Demand $000’s		Less than 3 months $000’s		3 to 6 Months $000’s		6 to 9 Months $000’s		9 to 12 months $000’s		Greater than 1 year $000’s
Accounts payable and accrued liabilities		163,809		—		—		—		—		—
Other payables		—		—		—		—		108,640		13,233
Provisions		41,967		—		—		—		—		392,081
Customer Deposits		676,111		—		—		—		—		—
Income tax payable		19,059		—		—		—		—		—
Holdback on purchase price		—		—		—		—		—		7,840
Equipment financing*		—		478		423		346		243		1,253
Long-term debt*		—		62,651		62,119		59,564		63,719		4,885,573

Total		900,946		63,129		62,542		59,910		172,602		5,299,980

*	includes capital and interest

25. Fair value

Some of the Corporation’s financial assets are measured at fair value at the end of each reporting period. The following table provides information about how the fair values of these financial assets are determined:

Financial assets

Fair value as at,

Fair value
hierarchy

Valuation techniques and key inputs

September 30,
2014
$000’s

December 31,
2013
$000’s

Investments in quoted market – FVTPL (note 11)

26,447

9,250

Level 1

Quoted bid prices in active market

Investments in quoted market – available for sale (note 11)

368,910

—

Level 1

Quoted bid prices in market

26. Capital Management

The Corporation’s objective in managing capital is to ensure a sufficient liquidity position to market its products, to finance its sales and marketing activities, research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with property and equipment. The ability to fund these requirements in the future depends on the Corporation’s ability to access additional capital and generate additional cash flow from its operations.

The Corporation defines capital as its total shareholders’ equity.

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. As at September 30, 2014, $nil (December 31, 2013 – $nil) has been used to finance the Corporation’s daily operations.

The capital management objectives listed above have not changed since the previous fiscal year.

The Corporation believes that funds from operations, as well as existing and future financial resources should be sufficient to meet the Corporation’s requirements until September 30, 2015.

27. Geographic information

The Corporation operates within two segments: its B2C Business, which starting in the third quarter of 2014 now comprises the vast majority of revenues, and its B2B Business. Revenues from external customers, attributed to countries based on location of the customer, are approximately as follows:


	For the three month period ended						For the nine month period ended
	September 30, 2014 $000’s		September 30, 2013 $000’s		September 30, 2014 $000’s		September 30, 2013 $000’s
Geographic Area
Americas		59,412		32,555		127,963		78,189
Europe		156,112		6,029		168,187		30,620
Rest of world		23,434		—		23,434		—

		238,958		38,584		319,584		108,809

The distribution of the Corporation’s non-current assets (consisting of goodwill and intangible assets and property and equipment) by geographical location is approximately as follows:


	September 30, 2014 $000’s		December 31, 2013 $000’s
Geographic Area
Americas		194,419		167,366
Europe		5,458,134		36,192
Rest of world		738		—

		5,653,291		203,558

LOGO

28. Statement of cash-flows

Changes in non-cash operating elements of working capital is as follows:


	For the three month period ended						For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s			September 30, 2014 $000’s			September 30, 2013 $000’s
Investment tax credits receivable		21			1,120			(112	)		1,754
Accounts receivable		42,457			7,059			38,898			10,736
Assets held for sale		—			(342	)		—			(342	)
Prepaid expenses		(21,126	)		107			(23,935	)		4,150
Inventories		1,502			(1,075	)		1,768			(1,082	)
Income taxes receivable		3,219			(1,363	)		3,222			(1,495	)
Income taxes payable		(1,213	)		6,132			2,660			6,063
Equipment financing		(68	)		(168	)		(302	)		(748	)
Accounts payable and accrued liabilities		45,122			28			44,469			(4,774	)
Other payables		(548	)		—			(548	)		—
Provisions		(1,549	)		(1,799	)		(12	)		(4,449	)
Deferred revenue		224			80			651			80
Customer deposits		(5,177	)		(957	)		(5,368	)		(8,598	)

		62,864			8,822			61,391			1,295

Supplemental information
Income taxes paid		986			—			2,872			—
Interest paid		11,382			88			23,003			9,741

29. Related party transactions


	September 30, 2014 $000’s		September 30, 2013 $000’s
Salaries, bonuses and short term employee benefits		2,038		885
Share based payments		1,018		270

		3,056		1,155

30. Revenues

The Corporation revenues consist of the following major categories:


	For the nine month period ended
	September 30, 2014 $000’s		September 30, 2013 $000’s
Finance income		1,524		311
Finance leases		1,661		12,825
Software licensing		17,360		35,788
Sales		17,454		2,379
Participation leases and arrangements		73,649		57,506
B2C		207,936		—

		319,584		108,809

31. Segmented information

Segmented Net Income (loss)


	September 30, 2014						September 30 2013
	B2B $000’s			B2C $000’s			B2B $000’s			B2C $000’s
Revenue		111,648			207,936			108,809			—
Gain from investments		47,474			—			—			—
Cost of products		6,447			—			3,370			—
Selling		10,742			27,789			10,827			—
General and administrative		110,330			105,632			76,559			—
Financial		5,313			20,335			14,371			—
Acquisition related		21,934			—			1,177			—

Earnings before income taxes		4,356			54,180			2,505			—

Current income tax		5,325			2,638			11,032			—
Deferred income tax		(21,104	)		(5,838	)		(4,286	)		—

Net earnings (loss) from continuing operations		20,136			57,379			(4,241	)		—

Other Segmented information


	September 30, 2014						September 30 2013
	B2B			B2C			B2B			B2C
Finance income		1,524			—			311			—
Financial expense		5,313			20,335			14,371			—
Depreciation & amortization		27,324			24,700			21,138			—
Income tax (current & deferred)		(15,779	)		(3,200	)		6,746			—
Impairment		9,017			22
Income (loss) from investments in associates		(256	)		—			—			—
Total Assets		410,180			6,504,022			440,831			—
Total Liabilities		(446,881	)		(4,409,257	)		(246,484	)		—

32. Discontinued operations

In September 2014, the Corporation’s Board of Directors has approved of a plan to dispose of Amaya’s B2B poker and gaming platform provider, Ongame Network Ltd. (“Ongame”) following a strategic decision to place greater focus on the Group’s key competencies. Previously, the subsidiary was not considered a discontinued operation as of December 31, 2013 but was classified as held for sale. The comparative consolidated statement of comprehensive income has been restated to show the discontinued operations separately from the continuing operations.

The entity measured the non-current assets and liabilities classified as held for sale at the lower of their carrying amount and fair value less costs to sell which was estimated to be $Nil. The resulting loss of $ 37,856,000 was recognized in loss on discontinued operations in the consolidated statement of comprehensive income.

The disposal of this entity is expected to take place before December 31, 2014.

LOGO

RESULTS FROM DISCONTINUED OPERATION


	For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s
Revenue		4,230			6,711
Expenses		(23,722	)		(23,940	)

Results from operating activity		(19,492	)		(17,229	)
Income tax		692			878

Results from operating activities, net of income tax		(20,184	)		(18,107	)
Loss on sale of discontinued operations		(37,856	)		—

Net loss from discontinued operations		(58,379	)		(18,107	)

CASH FLOWS FROM (USED IN) DISCONTINUED OPERATION


	For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s
Net cash used in operating activities		(21,301	)		(25,570	)
Net cash from investing activities		(5,880	)		(4,948	)
Net cash from financing activities		19,589			33,864

Net cash flows for the year		(7,371	)		3,348

EFFECT OF ON THE FINANCIAL POSITION OF THE COMPANY


	September 30, 2014 $000’s
Cash and cash equivalents		(2,323	)
Accounts receivable		(4,456	)
Income tax receivable		(567	)
Prepaid expenses and deposits		(705	)
Goodwill and intangible assets		(36,224	)
Property plant and equipment		(1,070	)
Deferred development costs		(8,468	)
Accounts payable		7,963
Customer deposits		1,825
Deferred income taxes		6,169

Net assets and liabilities		(37,856	)

33. Business Combination

DIAMOND GAME

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $USD
Cash and cash equivalents		39,546
Inventory		1,192,150
Trade and other receivables		1,718,606
Prepaid expenses		317,345
Property, plant and equipment		5,865,276
Trade payables and accrued liabilities		(3,637,693	)
Equipment financing		(104,794	)
Deferred revenue		(1,756,675	)
Deferred income tax liability		(46,709	)
Intercompany liability		(2,111,756	)
Purchase price allocated Intangibles		11,587,451
Goodwill		14,704,914
Deferred income tax liability		(2,896,810	)

Total consideration		24,870,851
Cash consideration		17,870,851
Holdback on Purchase Price		7,000,000

Total consideration		24,870,851

Of the USD$24.87 million consideration paid by Amaya in connection with the acquisition of Diamond Game, there was a holdback of USD $7 million.

If the acquisition had occurred on January 1, 2014, Diamond Game would have contributed USD $14.25 million and USD $6.13 million to consolidated revenues and net income respectively. Since the date of acquisition, Diamond Game has contributed USD $11.83 million and USD $9.07 million to consolidated revenues and net income respectively.

LOGO

OLDFORD GROUP LIMITED

The acquisition of Oldford Group Limited has been accounted for using the acquisition method and the results of operations are included in the consolidated statement of comprehensive income (loss) from the date of acquisition, which is August 1, 2014.

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition USD$000’s
Cash and cash equivalents		670,657
Inventory		776
Trade and other receivables		112,682
Income tax receivable		10,602
Prepaid expenses		35,328
Available for sale assets		9,461
Deferred income tax asset		123
Property, plant and equipment		49,169
Goodwill and Intangibles		722
Trade payables and accrued liabilities		(82,908	)
Other Payables		(97,000	)
Deferred Revenue		(436	)
Provisions		(19,993	)
Income tax payable		(12,281	)
Customer Deposits		(607,353	)
Purchase price allocated intangibles		2,124,367
Goodwill		2,699,788
Deferred income tax liability		(26,767	)

Total consideration		4,866,937

The main factors leading to the recognition of goodwill are the number of benefits to Amaya’s shareholders the Corporation believes the acquisition will provide. These include the following:

•

Acquisition of Leading Brands: The acquisition has resulted in a wholly-owned subsidiary of Amaya owning two global leading brands in online poker, PokerStars and Full-Tilt

•

New Verticals: Introduction of online real money casino and/or online sportsbook in those markets where permitted, are new opportunities for cross selling to the existing poker player base.

If the acquisition had occurred on January 1, 2014, Oldford Group would have contributed USD$844.32 million and USD$297.86 million to consolidated revenues and net income respectively. Since the date of acquisition, Oldford Group has contributed USD$189.92 million and USD$89.73 million to consolidated revenues and net income respectively.

Acquisition-related costs directly related to the Oldford Group acquisition was USD$17.81 million and was expensed in the consolidated statement of comprehensive income (loss) in the period ended September 30, 2014.

The acquisition of Oldford includes a deferred payment of USD$400 million which shall be subject to adjustment, payable on February 1, 2017, based upon the occurrence of certain events. The Corporation has estimated that deferred payment of USD$ 400 million (CAD$ 448 million) will be payable on February 1, 2017. The fair value of the deferred payment of USD$ 346 million (CAD$ 391 million) is recorded in Provisions (see note 17) and was calculated using a 6% discount rate, equivalent to the discount rate negotiated by the parties in case of early payment of the deferred payment.

PYR SOFTWARE LTD

The acquisition of PYR Software Ltd has been accounted for using the acquisition method and the results of operations are included in the consolidated statement of comprehensive income (loss) from the date of acquisition, which is September 1, 2014.

The following table summarizes the estimated fair value of the identifiable assets and liabilities acquired at the date of acquisition:


	Fair value on acquisition $000’s
Cash and cash equivalents		13,552
Trade and other receivables		5,953
Prepaid expenses		73
Investment tax credits receivable		12,536
Deferred income tax asset		626
Trade payables and accrued liabilities		(5,890	)
Deferred Revenue		(2,400	)
Income tax payable		(6,622	)
Other Payables		(2,317	)
Goodwill		280

Total consideration		15,791

PYR previously provided software development and support, on a B2B basis, primarily for Oldford. Amaya acquired the company as it was the primary outsourced games studio and development center supporting the Oldford business.

If the acquisition had occurred on January 1, 2014, PYR Software Ltd would have contributed nil to consolidated revenues and net income respectively. Since the date of acquisition, PYR Software Ltd. has contributed nil to consolidated revenues and CAD$(3.84) million net income respectively.

Acquisition-related costs directly related to the PYR Software Ltd. acquisition was CAD$32,000 and was expensed in the consolidated statement of comprehensive income (loss) in the period ended September 30, 2014.

LOGO

34. Expenses Classified By Nature


	For the three month period ended									For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s			September 30, 2014 $000’s			September 30, 2013 $000’s
Cost of Products
Inventories, beginning of period		9,788			7,879			7,595			7,531
Translation		411			(152	)		341			241
Purchases		2,547			7,224			12,429			14,342
Inventory acquired on business combination		868			—			2,186			—
Net Transfer from (to) revenue producing assets		(3,375	)		(910	)		(6,544	)		(7,239	)
Inventories, end of period		(9,560	)		(11,505	)		(9,560	)		(11,505	)

		679			2,536			6,447			3,370

Financial
Interest and bank charges		47,694			4,458			60,831			14,674
Foreign exchange		(31,851	)		(3,609	)		(35,183	)		(303	)

		15,843			849			25,648			14,371
General and administrative
Gaming duty		17,142			—			17,142			—
Processor costs		11,116			—			11,116			—
Utilities		977			119			1,422			358
Office		3,455			294			4,396			931
Taxes and licenses		1,234			262			2,519			1,025
Insurance		957			278			1,628			790
Salaries and fringe benefits		44,313			10,332			68,172			29,327
Termination of employment agreement		804			175			1,390			1,480
Stock-based compensation		1,493			510			3,028			1,436
Depreciation of property and equipment		5,107			3,007			12,489			8,996
Amortization of deferred development costs		463			244			1,187			567
Amortization of intangible assets		28,641			4,377			38,348			11,575
Consulting fees		4,137			1,340			7,273			4,745
General donations		760			27			793			114
Maintenance and repairs		2,015			763			5,426			2,652
Professional fees		7,274			521			10,215			3,831
Termination of agency agreement		—			—			—			101
Communications		4,950			1,144			7,575			3,509
Automobile		98			64			256			197
Bad debt		3,313			222			3,650			869
Rent		2,873			826			4,712			2,530
Insurance proceeds		—			(911	)		—			(911	)
Impairment		9,039			2,131			9,039			2,131
Loss on disposal of assets		4,182			118			4,186			306

		154,343			25,843			215,962			76,559
Selling
Royalties		1,490			1,301			4,332			4,028
Advertising and promotion		27,216			1,496			29,075			3,703
Travel and entertainment		2,324			921			4,042			2,364
Shipping		384			253			1,082			732

		31,414			3,971			38,531			10,827
Acquisition-related costs
Underwriter fees		—			—			—			—
Professional fees		12,130			845			21,934			1,177

		12,130			845			21,934			1,177

35. Net earnings per share

The following table sets forth the computation of basic and diluted loss per common share from continuing operations for the three and nine month period ended September 30, 2014 and 2013.


	For the three month period ended						For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s			September 30, 2014 $000’s		September 30, 2013 $000’s
Numerator
Numerator for basic and diluted (loss) per common share – net loss		(17,480	)		(3,466	)		19,269		(22,348	)

Denominator
Denominator for basic (loss) per common share – weighted average number of common shares		118,234,685			92,560,442			102,310,661		88,054,147

Effect of dilutive securities		45,925,664			4,218,036			7,677,565		2,021,345

Stock options		4,031,625			2,109,344			3,073,618		1,289,264
Warrants		10,933,278			2,108,692			4,603,947		732,081
Convertible preferred shares		30,960,761			—			—		—

Dilutive potential common shares		164,160,349			96,778,478			109,988,226		90,075,492

Denominator for diluted (loss) per common share – adjusted weighted number of shares		118,234,685			92,560,442			109,988,226		88,054,147
Basic earnings (loss) per common share		(0.15	)		(0.04	)		0.19		(0.25	)
Diluted earnings (loss) per common share		(0.15	)		(0.04	)		0.18		(0.25	)

For the three month period ended September 30, 2014 and the three and nine month period ended September 30, 2013, the diluted loss per share was the same as the basic net loss per share since the dilutive effect of stock options, warrants and other convertible instruments was not included in the calculation; otherwise the effect would have been anti-dilutive. Accordingly, the diluted loss per share for the period was calculated using the basic weighted average number of common shares outstanding.

36. Sale of WagerLogic Malta Holdings Ltd.

Subsidiaries of Amaya will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to a services agreement.

The Share Purchase Agreement includes an earn out agreement pursuant to which the vendor thereunder may receive additional cash consideration payable on the second and third anniversary date from closing based on the achievement of certain revenue targets, as well as a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$24.81 million ($27.78 million CAD), of which (i) USD$13.75 million ($15.40 million CAD) is recorded in Provisions (see note 17); (ii) USD $4.58 million ($5.13 million CAD) was offset against the promissory note of $10 million CAD; and (iii) USD $6.48 million ($7.25 million CAD) was paid.

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37. Subsequent Events

Sale of Ongame

As the company focuses on its consumer poker business, Amaya announced today that it has reached a definitive agreement (the “Agreement”) to divest Ongame, its B2B poker and platform provider, to NYX Gaming Group Ltd. (“NYX Gaming Group”) (the “Transaction”). Pursuant to the Agreement, NYX Gaming Group would acquire ownership of the Gibraltar-based Ongame Network Limited and Ongame’s Stockholm-based subsidiaries, which own and operate the B2B online poker business (“Ongame poker”) and B2B player management system (the “AGO platform”), with the transaction consideration being equivalent to a multiple of eight times Ongame’s 2015 EBITDA, less any required working capital. Amaya and NYX will also expand their existing partnership with:

•

Amaya making a strategic investment in NYX Gaming Group via a subscription of a $10 million unsecured convertible debenture, which matures two years after the date of issuance and bears interest at 6.00% per annum, payable at maturity. Interest and principal are payable in kind in NYX Gaming Group common shares at Amaya’s option.

•

Amaya and NYX subsidiary NextGen Gaming Pty Ltd (“NextGen”), a leading supplier of innovative games to the gambling industry, expanding their existing agreement under which NextGen supplies innovative online slot content to Amaya.

Closing of the Transaction is subject to customary regulatory approvals and is anticipated to occur by the end of November, 2014.

Amaya acquired Ongame in November, 2012, and subsequently developed the AGO platform. This platform development work was strategically important for Amaya as it allowed the Corporation to establish an important presence in the newly regulated U.S. online gaming market in New Jersey and to improve Amaya’s InterCasino offering (“WagerLogic”) prior to the announced sale of that asset in October, 2013. As the Corporation intended to acquire a B2C poker business, Amaya subsequently deemed Ongame to be a non-core B2B business and classified it as held for sale in December, 2013. In January, 2014, Amaya entered into a letter of intent to acquire the B2C poker brands PokerStars and Full Tilt.

Ongame is classified as discontinued operations for all periods in the MD&A and financial statements for the three and nine months ending September 30, 2014.

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EX-99.37

Exhibit 99.37

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TABLE OF CONTENTS	Management’s Discussion and Analysis	1
	Overview	1
	Outlook	6

	Basis of Presentation	7

	Forward-looking Statements	7

	Selected Financial Information	7

	Financial Condition	8

	Summary of Quarterly Results	9

	Comparison of the Three and Nine-Month periods ended September 30, 2014 and September 30, 2013	9

	Liquidity and Capital Resources	11

	Cash Flows by Activity	17

	Summary of Significant Accounting Policies	18

	Recent Accounting Pronouncements	32

	Off Balance Sheet Arrangements	34

	Cautionary Note Regarding Forward Looking Statements	38

	Further Information	38

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Management’s Discussion and Analysis

The following Management’s Discussion and Analysis (“MD&A”) provides a review of the results of operations, financial condition and cash flows for Amaya Gaming Group Inc. (“Amaya”, the “Corporation”, “we”, “us” or “our”), on a consolidated basis, for the three and nine month period ended September 30, 2014. This document should be read in conjunction with the information contained in the Corporation’s unaudited condensed consolidated financial statements and related notes for the three and nine month period ended September 30, 2014, and with the audited consolidated financial statements and related notes for the year ended December 31, 2013 and the MD&A thereon. All financial information presented in this MD&A was prepared in accordance with International Financial Reporting Standards (“IFRS”) unless otherwise stated. The consolidated financial statements and additional information regarding the business of the Corporation are available at www.sedar.com

This Management Discussion and Analysis (MD&A) is dated November 14, 2014, for the three and nine month period ended September 30, 2014.

Overview

Amaya is a leading provider of technology-based products and services in the gaming industry. Amaya has two reportable segments, B2C and B2B. In the third quarter ended September 30, 2014, B2C consisted of the consumer online gaming business, primarily PokerStars and Full Tilt, while B2B consisted of Amaya’s interactive gaming, land-based gaming, and lottery solutions.

B2C

Amaya’s primary business is its business-to-consumer operation (the “B2C Business”), which was acquired on August 1, 2014 when Amaya acquired Oldford Group Ltd. (“Oldford”). The B2C business owns and operates the online gaming brands PokerStars and Full Tilt. In addition, the B2C business operates, among others, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in major global casinos, and poker programming created for television and online audiences. The B2C Business operates globally and management conducts its principal activities from its headquarters in the Isle of Man. It is led by an experienced, proven senior management team with extensive industry experience along with additional product and marketing executives recruited in recent years to lead the entry into new verticals and additional markets. PokerStars and Full Tilt employ industry-leading practices in payment security, game integrity, player fund protection, marketing and promotion, customer support and VIP rewards/loyalty programs. The B2C Business has a robust, scalable technology platform that can handle 600,000 simultaneous players and which has hosted the largest single online tournament with 225,000 players. The B2C Business serves a global community, with customer support in almost 30 languages, and has a database of more than 85 million registered players.

PokerStars and Full Tilt are the Corporation’s primary B2C brands, offering distinct online gaming platforms. Sites operated by PokerStars and Full Tilt collectively hold a majority of the global share of real money poker player liquidity and are among the leaders in play money poker player liquidity (Source: Pokerscout.com, November 3, 2014).

Since it launched in 2001, PokerStars has become the first choice of players all over the world and it operates the world’s most popular online poker sites. PokerStars provides desktop client services and products to its customers which include real-money online poker cash games, tournaments and fast fold poker. PokerStars’ mobile apps are among the most popular poker apps on the iOS and Android platforms. PokerStars is home to the largest Internet poker events, including the two biggest online tournament series in the world - the World Championship of Online Poker (WCOOP) and the Spring Championship of Online Poker (SCOOP) – and the biggest weekly tournaments, the Sunday million and Sunday Warm-Up, plus thousands more every day of the week. More than 115 billion hands have been dealt on PokerStars, which is more than any other site. PokerStars also offers play-money chips for sale and use for online poker play on PokerStars.net and on the Facebook application PokerStars Play on Facebook. In the fourth quarter of 2014, PokerStars.es, the licensed PokerStars site for Spain, expanded its offering by providing table games with plans to launch casino games such as slots in 2015, with similar plans announced for PokerStars.it, the licensed brand in Italy.

Full Tilt is a leading gaming brand known for delivering some of the most innovative online poker games in the world. Through its revolutionary poker formats Rush Poker and Adrenaline Rush, Full Tilt Poker offers its players fast-paced, quick-fold gameplay on both desktop and mobile. In 2014, Full Tilt began expanding its game portfolio by offering a variety of online table and casino games on its global sites including a range of single- and multi-player variations of Blackjack and Roulette, online slots and Live Dealer games.

The B2C Business prides itself on complying with licensing frameworks and holds multiple online poker/gaming licenses. Both PokerStars and Full Tilt operate globally (.com websites) and in various European jurisdictions (.eu websites) under licenses from the Isle of Man and Malta governments respectively. The two brands have obtained a continuation license to operate in the United Kingdom and operate in Greece through partnership with a licensee. Additionally, PokerStars also holds separate government licenses in other European Union member states that have created independent regulatory and licensing schemes including Italy, France, Spain, Belgium, Estonia, Denmark, Bulgaria, and Schleswig Holstein in Germany. Amaya actively seeks to promote and inform relevant regulators on the benefits of tax efficient, responsible regulation of online poker and gaming.

B2B

Amaya is engaged in the design, development, manufacturing, distribution, sale and service of technology-based gaming solutions for the regulated gaming industry worldwide, primarily to land-based and online gaming operators and government bodies (the “B2B Business”). These business-to-business (“B2B”) solutions include technology, content and services for interactive gaming and electronic games and game systems for commercial, charitable and tribal casinos, as well as government lotteries and gaming agencies. Amaya’s Board of Directors has approved of a plan to dispose of Amaya’s B2B poker and gaming platform provider, Ongame Network Ltd. (“Ongame”). As a result, this entity’s assets and liabilities are classified separately as held for sale and its operating results are classified separately as discontinued operations in all periods presented. Amaya developed its portfolio of B2B solutions through both internal development and strategic acquisitions.

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Third quarter and Subsequent Highlights

Oldford Group Acquisition

On August 1, 2014, Amaya announced that it had completed the acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the owner and operator of the PokerStars and Full Tilt Poker brands, among others, in an all-cash transaction for an aggregate purchase price of USD$4.9 billion (the “Purchase Price”), including certain deferred payments and subject to customary purchase price adjustments (the “Acquisition”).

Oldford Group recorded consolidated revenues of approximately USD$1.133 billion (2012 – USD$976 million) and net income of USD$422 million (2012 – USD$314 million) in the fiscal year ended December 31, 2013. Oldford Group recorded consolidated revenues of approximately USD$568 million (2013 – USD$546 million) and net income of USD$218 million (2013 – USD$190 million) in the six months ended June 30, 2014.

•

USD$1.05 billion of convertible preferred shares (the “Convertible Preferred Shares”), which were subscribed for as follows: USD$600 million were subscribed by funds or accounts managed or advised by GSO Capital Partners LP or its affiliates (collectively, “GSO”); approximately USD$270 million were subscribed for by certain funds or accounts managed or advised by BlackRock Financial Management, Inc. or its affiliates (collectively, “BlackRock”); and, Canaccord Genuity purchased from treasury, on an underwritten bought-deal private placement basis, approximately USD$180 million. The Convertible Preferred Shares will not be listed on any exchange but, subject to legal limitations, will be freely transferable at the option of a holder. Each Convertible Preferred Share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually. The Corporation may, at any time after the first three (3) years of issuance, give notice of its election to cause all of the outstanding Convertible Preferred Shares to be automatically converted, subject to certain conditions. The terms of the convertible preferred shares are included in the Corporation’s Management Information Circular dated June 30, 2014, which was filed on SEDAR.

•

GSO purchased USD$55 million of common shares at C$20 per share.

•

a USD$1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor (together, the “First Loan”);

•

a USD$100 million five-year first lien revolving credit facility priced at Libor plus 4.00%, none of which was drawn at completion; and

•

a USD$800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor (the “Second Loan”).

•

Approximately USD$213 million from cash on hand, which includes a USD$50 million deposit made on June 12, 2014, the date of the announcement of the Acquisition.

Both GSO and BlackRock participated in the debt financing.

In connection with the Transaction, and as consideration for GSO’s and BlackRock’s significant role in the financing of the Transaction, the Corporation granted 11 million common share purchase warrants to GSO (the “GSO Warrants”) and 1.75 million common share purchase warrants to BlackRock (the “BlackRock Warrants”, collectively with the GSO Warrants, the “Oldford Group Warrants”), each with an exercise price of C$0.01 and exercisable for a term of 10 years, as payment for a portion of the fees payable to the two parties.

Further details on the Acquisition, are included in public filings made on SEDAR, including press releases related to the Acquisition, the Corporation’s Management Information Circular related to its Annual and Special Meeting of Amaya Shareholders held July 30, 2014, and a Business Acquisition Report.

Addition to S&P/TSX Composite Index

On September 16, 2014, Amaya announced that it had been added to the S&P/TSX Composite Index, effective at the market open on Monday, September 22, 2014. The Company joins Canada’s other leading corporations on the approximately 250-company index, which represents the largest businesses on the Toronto Stock Exchange. The S&P/TSX Composite is the headline index for the Canadian equity market. It is the broadest in the S&P/TSX family and is the basis for multiple sub-indices.

Launch of Spin & Go’s on PokerStars.com

Following successful launches in Spain, France and Italy, PokerStars launched “Spin & Go’s” to players on its global .com network on September 29. Full Tilt rolled out its version, Jackpot Sit and Go’s, on its global .com site earlier in the summer of 2014. The speedy, mobile-friendly poker variant has proven to be an instant hit, demonstrating that product innovation can attract new poker players and increase the amount of play from existing customers.

Spin & Go’s and Jackpot Sit & Go’s are fast-paced, three-handed hyper-turbo Sit & Go tournaments, which give players of all levels the chance to win multiples of their buy-in in a matter of minutes. The B2C Business believes the new variant will help attract new recreational players to the platform, reactivate players in its database, and excite current players.

Strategic Review of Cadillac Jack

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Macquarie Capital and Deutsche Bank Securities Inc. as co-financial advisors to assist the Corporation with the strategic review of Cadillac Jack. There can be no assurance that the Corporation’s strategic review process will result in the consummation of any specific action. There is no defined timeline for the strategic review and the Corporation does not intend to disclose additional information or further developments with respect to this process unless and until Amaya’s Board of Directors reviews and approves a specific action or otherwise deems further disclosure is appropriate or required.

UK Continuation Licenses

On November 11, 2014, Amaya announced that its gaming brands including PokerStars and Full Tilt have obtained continuation licenses to allow uninterrupted service to consumer and business customers in the United Kingdom. The continuation license for PokerStars and Full Tilt was awarded by the UK Gambling Commission in recognition of the existing licenses held in the Isle of Man. PokerStars and Full Tilt have operated in the United Kingdom as a “white-listed” company approved to do business throughout the country on the basis of the existing Isle of Man licensing. Amaya’s B2B online business also received the necessary continuation licenses to continue supplying UK-facing online gaming operators with Amaya’s online gaming content and technology.

San Manuel/California

On November 11, Amaya announced that the San Manuel Band of Mission Indians had agreed to join the existing business agreement between the Morongo Band of Mission Indians, California’s three largest card clubs - the Commerce Club, the Hawaiian Gardens Casino and the Bicycle Casino - and Amaya. These gaming operators will join together to operate a licensed online poker site in California once legislation is enacted to authorize iPoker. This coalition will also work together to advocate for legislation that extends California’s tough, long-established gaming regulations to include intrastate online poker.

Ongame Sale

•

Closing of the Transaction is subject to customary regulatory approvals and is anticipated to occur by the end of November, 2014.

regulated U.S. online gaming market in New Jersey and to improve Amaya’s InterCasino offering (“WagerLogic”) prior to the announced sale of that asset in October, 2013. As the Corporation intended to acquire a B2C poker business, Amaya subsequently deemed Ongame to be a non-core B2B business and classified it as held for sale in December, 2013. In January, 2014, Amaya entered into a letter of intent to acquire the B2C poker brands PokerStars and Full Tilt.

Ongame is classified as discontinued operations for all periods in the MD&A and financial statements for the three and nine months ending September 30, 2014.

Outlook

With the Corporation’s Acquisition of Oldford Group, the Corporation’s primary revenue provider beginning in the third quarter of 2014 is the B2C Business.

This transaction resulted in Amaya becoming the world’s largest publicly traded online gaming company and provides Amaya with a premier, scalable gaming platform. It significantly diversifies us both geographically and in gaming verticals. The Corporation anticipates the transaction will be highly accretive to our earnings and provide strong cash flow. The B2C Business is the owner and operator of PokerStars, which is the world’s largest online gaming brand. Over the past 14 years, the business has become the world’s largest poker business, earning the loyalty of millions of players, not only having the highest liquidity but also a recognized dedication to game integrity, player protection, and responsible gaming as well as being an innovator in technology, game formats and marketing and loyalty programs. The business has developed a premium, robust software and scalable operating platform and has spearheaded industry leading practices in customer service, payment security, game integrity, player fund protection and responsible gaming. We believe its marketing investments are above those of anyone else in the online poker industry and it supports this effort through leading player loyalty programs.

PokerStars has 11 online gaming licenses in various global markets, including in France, Spain and Italy. With the continued trend toward regulation of online gaming around the world, the business in recent years has been developing and executing on growth initiatives to leverage its brand recognition and customer loyalty to diversify into other gaming verticals, notably casino, sportsbetting and social gaming, which represent a combined global market size of approximately $25 billion, according to industry estimates, significantly greater than its current addressable poker market. Additionally, the business does not currently operate in the United States of America (the “U.S.”). Amaya anticipates its regulatory track record in the U.S. has the potential to facilitate a speedier entry into the U.S. for the business. The U.S. Department of Justice in late 2012 issued an opinion on its stance on online gaming, to the effect that only sports betting is subject to the Federal Wire Act of 1961 and all other forms of online gambling are permitted. As a result, three states, New Jersey, Delaware and Nevada, have subsequently regulated online gaming. Amaya’s B2B Business subsequently received transactional waivers from the New Jersey Division of Gaming Enforcement to supply technology for real money online gaming websites operated by licensed permit holders in New Jersey. In late November 2013, real money online gaming went live in New Jersey, the third and thus far largest U.S. state to have approved it, following Nevada and Delaware.

Amaya intends to support the growth initiatives of the business, expansion into adjacent gaming verticals, growth in emerging markets, and expansion into new markets, and believes they have the potential to increase the size of the overall business as well as liquidity within the core B2C poker business.

Amaya’s strategy for its B2B Business consists of extending its market footprint by facilitating the delivery of gaming content across physical and interactive media. Amaya’s strategy is reinforced by its existing portfolio of developed and acquired technologies.

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Amaya markets its solutions to gaming operators licensed in regulated gaming jurisdictions, as well as governments and hospitality industry operators.

2014 Full Year Financial Guidance

On November 10, 2014, the Corporation affirmed its previously announced guidance for the full year 2014 for revenue ($669 - $715 million) and Adjusted EBITDA* ($265 - $285 million), with results expected at the high end of the range. The financial guidance for 2014 excludes the impact of any potential future strategic transactions, and any specified items that have not yet been identified and quantified.

Basis of Presentation

The following information and comments are intended to provide a review and analysis of the Corporation’s operational results and financial position for the three and nine month periods ended September 30, 2014, as compared to the corresponding periods ended on September 30, 2013. This MD&A should be read in conjunction with the consolidated financial statements and related notes for the three and nine month periods ended September 30, 2014. Such consolidated financial statements, and the respective notes thereto have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Unless otherwise indicated, the information contained herein is stated as of September 30, 2014.

Forward-looking Statements

Selected Financial Information


	For the nine month period ended		For the Year ended
	September 30, 2014 $000’s		December 31, 2013 $000’s
Total Revenue		319,584		145,892
Net Income (Loss)		19,136		(29,173	)
Basic Earnings (Loss) Per Share		0.19		(0.33	)
Diluted Earnings (Loss) Per Share		0.18		(0.33	)
Total Assets		6,914,202		440,831
Total Long Term Financial Liabilities		3,824,597		200,947
Cash Dividends Declared Per Share		—		—

Financial Condition

The Corporation’s asset base increase of approximately $6,500,000,000 was driven by the acquisition of Oldford Group, proceeds of the sale of WagerLogic Malta Holdings Ltd. (“WagerLogic”) for aggregate gross proceeds of $62,500,000 (the “WagerLogic Sale”), an incremental facility of USD$80,000,000 to Cadillac Jack’s existing senior term loan, and mezzanine debt of USD$100,000,000.

Based on the Corporation’s current revenue expectations, strong cash flow conversion and the funds available from the USD $100 million five-year first lien revolving credit facility, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.


Revenues by Geographic Area	For the nine month period ended September 30,
	2014 $		2013 $

Americas		127,693		78,189
Europe		168,187		30,620
Rest of world		23,434		—

The revenue increase in the Americas for the nine month period ended September 30, 2014 relative to the nine month period ended September 30, 2013 is primarily attributable to revenue generated by the B2C Business.

The revenue increase in the Europe for the nine month period ended September 30, 2014 relative to the nine month period ended September 30, 2013 is primarily attributable to revenue generated by the B2C Business.

The revenue increase in the Rest of world for the nine month period ended September 30, 2014 relative to the nine month period ended September 30, 2013 is attributable to revenue generated by the B2C Business.

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Summary of Quarterly Results


For the three months ended	31-Dec-12 $000’s			31-Mar-13 $000’s			30-Jun-13 $000’s			30-Sep-13 $000’s			31-Dec-13 $000’s			31-Mar-14 $000’s		30-Jun-14 $000’s			30-Sep-14 $000’s
Revenue		37,194			34,995			35,230			38,584			37,083			39,542		41,083			238,958
Net income (loss)		(711	)		(7,441	)		(11,442	)		(3,466	)		(6,824	)		39,644		(2,895	)		(17,613	)
Basic earnings (loss) per Common share		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.42		(0.03	)		(0.15	)
Diluted earnings (loss) per Common share		(0.01	)		(0.09	)		(0.13	)		(0.04	)		(0.07	)		0.38		(0.03	)		(0.15	)

Comparison of the Three and Nine-Month periods ended September 30, 2014 and September 30, 2013

REVENUE

The Corporation’s revenues consist of the following major categories:


	For the three month period ended				For the nine month period ended
	September 30, 2014 $000’s		September 30, 2013 $000’s		September 30, 2014 $000’s		September 30, 2013 $000’s
B2C Business*		207,936		—		207,936		—

B2B Business - Finance income		1,063		166		1,524		311

B2B Business - Finance leases		231		12,504		1,661		12,825

B2B Business - Software licensing		3,219		6,859		17,360		35,788

B2B Business – Outright Sales		1,394		619		17,454		2,379

B2B Business - Participation leases and arrangements		25,115		18,436		73,649		57,506

		238,958		38,584		319,584		108,809

*	The B2C Business was acquired August 1, 2014

Revenue for the three month period ended September 30, 2014, was $238.96 million compared to $38.58 million for the three month period ended September 30, 2013, representing an increase of 519%. This is primarily attributable to (i) consolidating revenue earned by the B2C Business and consolidating Diamond Game revenue, partially offset by significant finance lease revenue earned in the third quarter of 2013.

Revenue for the nine month period ended September 30, 2014, was $319.58 million compared to $108.81 million for the nine month period ended September 30, 2013, representing an increase of 194%. This is primarily attributable to consolidating revenue earned by the B2C Business and consolidating Diamond Game revenue, partially offset by significant finance lease revenue earned in the third quarter of 2013.

SELLING

Sales and marketing expenses increased from $3.97 million for the three month period ended September 30, 2013, to $31.41 million for the three month period ended September 30, 2014, representing an increase of 691%. The increase was driven by advertising expenses incurred by the B2C Business during the three month period ended September 30, 2014.

Sales and marketing expenses increased from $10.83 million for the nine month period ended September 30, 2013, to $38.53 million for the nine month period ended September 30, 2014, representing an increase of 256%. The increase was driven by advertising expenses incurred by the B2C Business during the nine month period ended September 30, 2014.

GENERAL AND ADMINISTRATIVE

General and administrative expenses increased from $25.84 million for the three month period ended September 30, 2013, to $154.34 million for the three month period ended September 30, 2014, representing an increase of 497%. The increase was driven by (i) a growing employee base due to the Diamond Game and Oldford Group acquisitions; (ii) increased amortization of intangibles and property and equipment (iii) gaming duty and processor costs incurred by the B2C Business in connection with generating B2C revenue; (iv) increase in repairs and maintenance in connection with servicing profit sharing arrangement revenue; and, (v) higher consulting and professional fees. A number of B2B-related intangible and tangible assets have been determined to be redundant to the Company’s core operations, notably its B2C Business. Impairment losses of approximately $9.04 million and a loss on disposal of assets of approximately $4.19 million were recognized in the third quarter of 2014.

General and administrative expenses increased from $76.56 million for the nine month period ended September 30, 2013, to $215.96 million for the nine month period ended September 30, 2014, representing an increase of 182%. The increase was driven by (i) a growing employee base due to the Diamond Game and Oldford Group acquisitions; (ii) increased amortization of intangibles and property and equipment (iii) gaming duty and processor costs incurred by the B2C Business in connection with generating B2C revenue; (iv) increase in repairs and maintenance in connection with servicing profit sharing arrangement revenue; (v) higher consulting and professional fees ;and, (vi) impairment losses and loss on disposal of assets related to its B2B Business.

FINANCIAL

Financial expenses increased from $0.85 million for the three month period ended September 30, 2013, to $15.84 million for the three month period ended September 30, 2014. The increase is primarily attributable to interest on the First and Second Lien Term Loans, Cadillac Jack’s refinanced senior secured term loan and mezzanine debt financing incurred during the three month period ended September 30, 2014.

Financial expenses increased from $14.37 million for the nine month period ended September 30, 2013, to $25.65 million for the nine month period ended September 30, 2014. The increase is primarily attributable to interest on the First and Second Lien Term Loans, Cadillac Jack’s refinanced senior secured term loan and mezzanine debt financing incurred during the nine month period ended September 30, 2014.

ACQUISITION RELATED EXPENSES

Acquisition related expenses increased from $0.85 million for the three month period ended September 30, 2013, to $12.13 million for the three month period ended September 30, 2014. The increase is driven by professional fees incurred in connection with the Oldford Group acquisition during the three month period ended September 30, 2014.

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Acquisition related expenses increased from $1.18 million for the nine month period ended September 30, 2013, to $21.93 million for the nine month period ended September 30, 2014. The increase is driven by professional fees incurred in connection with the Oldford Group and Diamond Game acquisitions during the nine month period ended September 30, 2014.

CURRENT AND DEFERRED INCOME TAX

Current income taxes decreased from $7.33 million for the three month period ended September 30, 2013, to $1.24 million for the three month period ended September 30, 2014. Taxable income during the three month period ended September 30, 2014 decrease is primarily attributable to the Corporation being less taxable in a number of tax jurisdictions in which it operates.

Current income taxes decreased from $11.03 million for the nine month period ended September 30, 2013, to $7.96 million for the nine month period ended September 30, 2014. Taxable income during the nine month period ended September 30, 2014 decrease is primarily attributable to the Corporation being less taxable in a number of tax jurisdictions in which it operates.

For the three month period ended September 30, 2014, the Corporation recognized deferred income tax recovery driven primarily by (i) differences between accounting and tax treatment of purchase price allocated intangibles; and (ii) differences between accounting and tax treatment of debt and equity transaction costs; and (iii) tax election adjusting the tax basis of assets acquired in the Diamond Game acquisition.

For the nine month period ended September 30, 2014, the Corporation recognized deferred income tax recovery driven primarily by (i) differences between accounting and tax treatment of purchase price allocated intangibles; and (ii) differences between accounting and tax treatment of debt and equity transaction costs; and (iii) tax election adjusting the tax basis of assets acquired in the Diamond Game acquisition.

Liquidity and Capital Resources

Based on the Corporation’s current revenue expectations, the funds available from the Corporation’s private placement of debt and shares, the funds available from refinancing of its senior secured term loan, Management believes the Corporation will have the cash resources to satisfy current working capital needs for at least the next 12 months.

The Corporation is exposed to liquidity risk with respect to its contractual obligations and financial liabilities. The Corporation manages liquidity risk by continuously monitoring forecasted and actual cash flows and matching maturity profiles of financial assets and liabilities. The Corporation’s objective is to maintain a balance between continuity of funding and flexibility through borrowing facilities available through the Corporation’s bank and other lenders. The Corporation’s policy is to ensure adequate funding is available from operations, established lending facilities and other sources as required.


September 30, 2014	On Demand $000’s		Less Than 1 year $000’s		1-3 years $000’s		4-5 years $000’s		More Than 5 years $000’s

Accounts payable and accrued liabilities		163,809		—		—		—		—
Other payables		—		108,640		13,233		—		—
Provisions		41,967		—		392,081		—		—
Customer deposits†		676,111		—		—		—		—
Income taxes payable		19,059		—		—		—		—
Holdback of purchase price		—		—		7,840		—		—
Equipment financing*		—		1,490		1,253		—		—
Long-term debt*		—		248,053		517,765		729,176		3,638,632
Commitments under lease agreements for premises, hardware support contracts, and purchase obligations		—		18,259		20,979		12,955		41,377

Total		900,946		376,442		953,151		742,131		3,680,009

*	Includes capital and interest

CREDIT FACILITY

The Corporation’s credit facility includes a revolving demand credit facility of $3 million. The revolving demand credit facility can be used for general working capital purposes. The facility bears interest at the bank’s prime rate plus between 1.25% and 2% depending on the Corporation’s fixed charge coverage ratio. To secure the full repayment of advances (June 30, 2014 - $nil), the Corporation has provided the Bank a first ranking security interest over all of the movable/personal property of the Corporation.

Under the terms of the credit facility arrangement with the Bank, the Corporation is required amongst other conditions, to maintain at all times certain ratios and a minimum level of net worth. As at September 30, 2014 and December 31, 2013, the Corporation was not in breach of the terms of the credit facility agreements.

LONG-TERM DEBT

The following is a summary of long-term debt outstanding at September 30, 2014 and December 31, 2013:


	September 30, 2014 $000’s		December 31, 2013 $000’s
Current portion		19,183		2,388
Long-term debt		3,374,793		192,799

		3,393,976		195,187

(a) Subordinated Debt

The Corporation fully repaid to the subordinated debt during the period ended September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $10,000 (2013 – $23,000) in interest.

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	September 30, 2014 $000’s		December 31, 2013 $000’s
Subordinated loan bearing interest at 14% per annum plus additional interest, maturing in 2014 and payable in monthly instalments of $25,000 plus interest		—		275
Current maturity		—		(275	)

		—		—

(b) Non-convertible subordinated debentures

The Corporation has determined the fair value of the debt component. Then, the proceeds were allocated between the debt and the equity components using the residual method.


	September 30, 2014 $000’s
Fair Value of Liability component		26,844
Fair Value of Equity component		3,156
Face Value		30,000

Transaction costs		1,831

During the nine month period ended September 30, 2014, the Corporation incurred $2,841,000 (2013 – $2,237,000) in interest of which $1,158,000 relates to interest accretion.

The following table reflects movements recognized during the nine month period ended September 30, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		30,000		25,206		2,963
Exercise of warrants		—		—		(1,442	)
Accretion of liability component (effective interest of 13.60%)		—		2,395		—

Balance at September 30, 2014		30,000		27,601		1,521

Non-convertible subordinated debentures repayments over the next two years amount to the following:


	$000’s
2015		—
2016		30,000

fees and expenses, and to be used to fund the ongoing working capital and other general corporate purposes of Cadillac Jack. On May 15, 2014, Cadillac Jack obtained an incremental USD$80 million term loan to Cadillac Jack’s existing USD$160 million senior term loan for the purpose of financing working capital expenses and general corporate purposes of the Corporation. The new aggregate principal amount of USD$240 million bears interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”). The Senior Facility will mature over a 5-year term from the closing date and is secured by the assets of Cadillac Jack and its subsidiaries. The Senior Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios for which the Corporation was in compliance with as of September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $14,785,000 (2013 - $7,585,000) in interest of which $424,000 relates to interest accretion.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		267,423			170,176
Transaction costs		(4,375	)		(1,947	)
Accretion (effective interest rate of 9.90%)		437			13
Translation		(96	)		(64	)
Current portion (net of unamortized transaction costs of $740,000)		(1,950	)		(1,702	)

		261,439			166,476

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,690
2016		2,690
2017		2,690
2018		2,690
2019		256,663

(d) Other long-term debt

Other long-term debt is comprised of a long-term debt in the amount of USD$750,000 bearing interest at 6.0% per annum, repayable in equal semi-annual instalments over a two-year term.

The Corporation fully repaid the other long-term debt during the nine months ended September 30, 2014.

During the nine month period ended September 30, 2014, the Corporation incurred $13,000 (2013 – $29,000) in interest.


	September 30, 2014 $000’s		December 31, 2013 $000’s
Loan bearing interest at 6% per annum repayable in equal semi-annual instalments over a two year term		—		411
Current maturity		—		(411	)

		—		—

(e) Mezzanine subordinated unsecured term loan

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guarantee of the obligations under the Mezzanine Facility of Cadillac Jack in favour of the lenders. The Mezzanine Facility contains customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios which the Corporation was in compliance with as of September 30, 2014. The Corporation has agreed to grant the lenders, in relation to the Mezzanine Facility, 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD$19.17 at any time up to a period ending 10 years after the closing date (see note 23).


	September 30, 2014 $000’s
Fair Value of Liability component		96,223
Fair Value of Equity component		15,857
Face Value		112,080

Transaction costs		2,978

The following table reflects movements recognized during the nine month period ended September 30, 2014.


	Face value $000’s		Liability component $000’s		Equity component $000’s
Opening balance (net of transaction costs)		112,080		93,667		15,436
Paid In Kind Interest		—		2,954		—
Accretion of liability component (effective interest of 16.16%)		—		399		—
Translation		—		72		—

Balance at September 30, 2014		112,080		97,092		15,436

(f) First and second lien term loans

(i)

a USD$1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		1,960,000			—
Transaction costs		(69,868	)		—
Accretion (effective interest rate of 5.64%)		1,400			—
Translation		(1,443	)		—
Current portion (net of unamortized transaction costs of $8,949,000)		(10,651	)		—

		1,879,438			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		19,600
2016		19,600
2017		19,600
2018		19,600
2019+		1,881,600


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		282,867			—
Transaction costs		(9,632	)		—
Accretion (effective interest rate of 5.84%)		192			—
Translation		251			—
Current portion (net of unamortized transaction costs of $1,169,000)		(1,659	)		—

		272,019			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		2,829
2016		2,829
2017		2,829
2018		2,829
2019+		271,551

(ii)

a USD$800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor

During the nine month period ended September 30, 2014, the Corporation incurred $11,700,000 (2013 - nil) in interest of which $750,000 relates to interest accretion.


	September 30, 2014 $000’s			December 31, 2013 $000’s
Principal		896,000			—
Transaction costs		(53,512	)		—
Accretion (effective interest rate of 5.64%)		750			—
Translation		(1,111	)		—
Current portion (net of unamortized transaction costs of $4,923,000)		(4,923	)		—

		837,204			—

Term loan principal repayments over the next five years amount to the following:


	$000’s
2015		—
2016		—
2017		—
2018		—
2019+		896,000

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Cash Flows by Activity

The table below outlines a summary of cash inflows and outflows by activity.

Cash Inflows and (Outflows) by Activity:


	For the three month period ended						For the nine month period ended
	September 30, 2014 $000’s			September 30, 2013 $000’s			September 30, 2014 $000’s			September 30, 2013 $000’s
Operating activities		138,922			3,048			134,895			(3,103	)
Financing activities		4,701,328			36,806			4,894,675			59,711
Investing activities		(4,551,498	)		(13,709	)		(4,600,127	)		(32,359	)

CASH PROVIDED BY (USED IN) OPERATIONS

The Corporation generated positive cash flows from operating activities for the three-month period ending September 30, 2014. This is primarily attributable to strong cash conversion of B2C revenue generated by the B2C Business. Cash generated by operating activities for the three-month period ending September 30, 2014 was $138.92 million as compared to $3.05 million for the three-month period ending September 30, 2013.

The Corporation generated positive cash flows from operating activities for the nine-month period ending September 30, 2014. This is primarily attributable to strong cash conversion of B2C revenue generated by the B2C Business. Cash generated by operating activities for the nine-month period ending September 30, 2014 was $134.90 million as compared to $(3.10) million for the nine-month period ending September 30, 2013.

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

The cash provided from financing activities for the three-month period ending September 30, 2014 and September 30, 2013 was $4,701.33 million and $36.81 million respectively. During the three-month period ending September 30, 2014, cash from financing activities was primarily derived from proceeds from (i) the First and Second Lien Term Loans; (ii) issuance of common and convertible preferred shares. During the three-month period ending September 30, 2013, cash from financing activities was primarily derived from private placement of common shares for aggregate gross proceeds of $40,000,000.

The cash provided from financing activities for the nine-month period ending September 30, 2014 and September 30, 2013 was $4,894.68 million and $59.71 million respectively. During the nine-month period ending September 30, 2014, cash from financing activities was primarily derived from proceeds from (i) the First and Second Lien Term Loans; (ii) issuance of common and convertible preferred shares; (iii) Cadillac Jack’s incremental senior secured term loan, and mezzanine debt financing. During the nine-month period ending September 30, 2013, cash from financing activities was primarily derived from (i) private placement of debt for aggregate gross proceeds of $30,000,000; and (ii) private placement of common shares for aggregate gross proceeds of $40,000,000 partially offset by a share buyback of 660,800 shares.

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

The use of cash for investing activities for the three month period ending September 30, 2014 was $4,551.50 million as compared to $13.71 million for the three month period ending September 30, 2013. During the three month period ending September 30, 2014, the key expenditure driving the Corporation’s use of cash for investing activities was the acquisition of Oldford Group. During the three-month period ended September 30, 2013, the key expenditures driving the Corporation’s use of cash for investing activities were: (i) continued investment in development of proprietary technology and gaming content; (ii) deployment of Cadillac Jack revenue producing assets; and (iii) acquisition of brand licensing capabilities.

The use of cash for investing activities for the nine month period ending September 30, 2014 was $4,600.13 million as compared to $32.36 million for the nine month period ending September 30, 2013. During the nine month period ending September 30, 2014, the key expenditure driving the Corporation’s use of cash for investing activities was the acquisition of Oldford Group. During the nine-month period ended September 30, 2013, the key expenditures driving the Corporation’s use of cash for investing activities were: (i) continued investment in development of proprietary technology and gaming content; (ii) deployment of Cadillac Jack revenue producing assets; and (iii) acquisition of brand licensing capabilities.

Summary of Significant Accounting Policies

BASIS OF PRESENTATION

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. A wholly owned subsidiary is an entity over which the Corporation has control, where control is defined as the power to govern financial and operating policies. On consolidation, all significant inter-entity transactions and balances have been eliminated. As at September 30, 2014, the consolidated financial statements included 123 wholly owned subsidiaries.

ASSOCIATES

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liabilities and contingent liabilities is accounted for in accordance with IFRS 3 Business Combinations. The goodwill (net of any accumulated impairment loss) relating to an investment in an associate is included within the carrying amount of that investment.

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Non-Current assets held for sale

A non-current asset (or disposal group) held for sale represents an asset whose carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the sale must be highly probable and the non-current asset (or disposal group) must be available for immediate sale in its present condition. The appropriate level of management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from its classification. Disposal groups and non-current assets held for sale are included in the consolidated statement of financial position at fair value less costs to sell, if this is lower than the previous carrying amount. Once an asset is classified as held for sale or included in a group of assets held for sale, no further depreciation or amortisation is recorded.

Discontinued operations

These are either separate major lines of business or geographical operations that have been sold or classified as held for sale. When held for use, discontinued operations were a cash-generating unit or a group of cash-generating units. They comprise operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. Their results are shown separately in the consolidated statement of profit or loss and comparative figures are restated to reclassify them from continuing to discontinued operations.

REVENUE RECOGNITION

Revenue is recognized when all the following criteria are met:

•

the Corporation has transferred to the buyer the significant risks and rewards;

•

the amount of revenue can be reliably measured;

•

it is probable that the economic benefits associated with the transaction will flow to the Corporation; and

•

the costs incurred or to be incurred in respect of the transaction can be reliably measured.

B2C REVENUE

from ring/cash games and entry fees for tournaments. Revenue is measured at the fair value of the consideration derived. Revenue is only recognised when it is probable that the economic benefits will flow to the B2c Business and the amount of revenue can be measured reliably.

Multiple-element revenue arrangements

Certain contracts of the Corporation include license fees, training, installation, consulting, maintenance, product support services and periodic upgrades.

Where such agreements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair values of each element are determined based on current market price of each of the elements when sold separately. Revenue is only recognized when, in Management’s judgment, the significant risks and rewards of ownership have been transferred or when the obligation has been fulfilled.

In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenue:

Product Sales

Participation leases and arrangements

Software Licensing

Lease revenues

In the course of its normal business the Corporation enters into lease agreements for its gaming equipment.

Assets subject to finance leases are initially recognized at an amount equal to the net investment in the lease, which is the fair value of the asset, or, if lower, the present value of the minimum lease payments. Revenue is recognized on the basis of policy for product sales. Finance income is subsequently recognized over the term of the applicable leases based on the effective interest rate method. Finance income is grouped with the revenues, in the statement of comprehensive income (loss).

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TRANSLATION OF FOREIGN OPERATIONS AND FOREIGN CURRENCY TRANSACTIONS

Functional and presentation currency

A change in functional currency is accounted for prospectively from the date of change by translating all items into the new functional currency using the exchange rate at the date of change.

Transactions and balances

Group companies

Each foreign operation determines its own functional currency and items included in the financial statements of each foreign operation are measured using that functional currency.

The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i)	assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)

(iii)

all resulting exchange differences are recognized in other comprehensive income (loss).

The following functional currencies are referred to herein below:


Currency Symbol		Currency Description
CAD		Canadian Dollar
USD		United States Dollar
EUR		European Euro
GBP		Pound Sterling

BUSINESS COMBINATION

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognized, regardless of whether they have been previously recognized in the acquiree’s financial statements prior to the acquisition. On initial recognition, the assets and liabilities of the acquired subsidiary are included in the consolidated statement of financial position at their fair values. Goodwill is recorded when the identifiable intangible assets have been determined. Goodwill is the excess of the fair value of the consideration transferred over the fair value of the Corporation’s share in the acquiree’s net identifiable assets on the date of acquisition. Any excess of the identifiable net assets over the consideration transferred is recognized in income immediately.

The consideration transferred by the Corporation to acquire control of a subsidiary is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred and equity interests issued by the Corporation, including the fair value of all the assets and liabilities resulting from a deferred payment arrangement. Acquisition related costs are expensed as incurred.

OPERATING SEGMENTS

FINANCIAL INSTRUMENTS

Financial assets

Fair Value through Profit or Loss

Financial assets at fair value through profit or loss are financial assets held-for-trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by Management. Financial assets classified at fair value through profit or loss are measured at fair value, with the realized and unrealized changes in fair value recognized each reporting period on the consolidated statement of comprehensive income (loss). The Corporation’s investment in Intertain is classified as fair value through profit or loss.

Available-for-sale

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available-for-sale are carried at fair value with the changes in fair value recorded in other comprehensive income (loss), except for investments in equity instruments that do not have a quoted market price in an active market which are measured at cost. Interest on available-for-sale assets is calculated using the effective interest rate method and is recognized in the net loss. When a decline in fair value is determined to be other-than-temporary, the cumulative loss included in accumulated other comprehensive income (loss) is removed and recognized in the consolidated statement of comprehensive income (loss). Gains and losses realized on disposal of available-for-sale securities are recognized in the statement of comprehensive income (loss). The Corporation has short term and long term investments classified as available-for-sale (see note 11).

Held-to-maturity and loans and receivables

Impairment

Financial Liabilities

Financial liabilities are classified as either “financial liabilities at fair value through profit or loss”, or “other financial liabilities”. Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method for liabilities that are not hedged and fair value for liabilities that are hedged. All financial liabilities are classified as other liabilities.

Transaction costs

Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities that are classified as “Through Profit or Loss”) are added to or deducted from the fair value of the financial instrument on initial recognition. These costs are expensed to “interest” on the consolidated statement of comprehensive income (loss) over the term of the related financial asset or financial liability using the effective interest method. When a debt facility is retired by the Corporation, any remaining balance of related debt transaction costs is expensed to “interest” on the consolidated statement of comprehensive income (loss) in the period that the debt facility is retired. Transactions costs related to financial instruments at fair value through profit or loss are expensed when incurred.

Compound Financial Instruments

Corporation has determined the fair value of the liability component. Then, the proceeds were allocated between the liability and the equity components using the residual method. Any directly attributable transaction costs are allocated to the liability and the warrants in proportion to their initial carrying amounts.

Embedded derivatives

Derivatives may be embedded in other financial and non-financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not held-for-trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in the consolidated statement of comprehensive income (loss). The Corporation has no embedded derivatives.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring the fair value of an asset or a liability, the Corporation uses market observable data to the extent possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Corporation (working closely with external qualified valuers) using valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for similar items, discounted cash flow analysis, or option pricing models refined to reflect the issuer’s specific circumstances). Inputs used are consistent with the characteristics of the asset / liability that market participants would take into account.

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

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Transfers between levels of the fair value hierarchy are recognised by the Corporation at the end of the reporting period during which the change occurred.

Comprehensive income (loss)

RESEARCH AND DEVELOPMENT INVESTMENT TAX CREDITS

The Corporation claims research and development investment tax credits as a result of incurring scientific research and experimental development expenditures. Research and development investment tax credits are recognized when the related expenditures are incurred, and there is reasonable assurance of their realization. Investment tax credits are accounted for by the cost reduction method, whereby the amounts of tax credits are applied as a reduction of the cost of the deferred development costs.

INVENTORY VALUATION

PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consist of amounts paid in advance or deposits made for which the Corporation will receive goods or services within the next normal operating cycle.

PROPERTY AND EQUIPMENT


Revenue-producing assets	Declining balance	20%
Machinery and equipment	Declining balance	20%
Furniture and fixtures	Declining balance	20%
Computer equipment	Declining balance	20%
Land and Building	Straight-line	25 years

INTANGIBLE ASSETS


Software	Declining balance	20%
Licenses	Straight-line	Over the term of licenses
Placement fee	Straight-line	Over the term of lease

ACQUISITION-RELATED INTANGIBLES


Software Technology	Straight-line	5years
Customer Relationships	Straight-line	15 years
Brands	N/A	Indefinite useful life

GOODWILL

RESEARCH AND DEVELOPMENT

Research and development costs are expensed except in cases where development costs meet certain identifiable criteria for deferral. Development costs, which have probable future economic benefit, can be clearly defined and measured, and are incurred for the development of new products or technologies, are capitalized. These development costs net of related research and development investment tax credits are not amortized until the products or technologies are commercialized, at which time, they are amortized over the estimated life of the commercial production.

The amortization method and the life of the commercial production are assessed annually and the assets are tested for impairment.

IMPAIRMENT OF NON-CURRENT ASSETS

At the end of each reporting period, the carrying amounts of property and equipment and intangible assets with finite useful lives are assessed to determine if there is any evidence that an asset is impaired. If there is such evidence, the recoverable amount of the asset is estimated. The recoverable amount of intangible assets with indefinite useful lives or those are not ready for use is estimated on the same date each year.

The recoverable amount of an asset or a cash generating unit is the higher of value-in-use and fair value less costs to sell.

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The Corporation’s corporate assets do not generate separate cash flows. If there is evidence that a corporate asset is impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs. Impairments are recorded when the carrying amount of an asset or its CGU is higher than its recoverable amount. Impairment charges are recognized in income or loss.

TAXATION

Current tax

Deferred tax

STOCK-BASED COMPENSATION

The Corporation has one share option plan and accounts for grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. Compensation expense for equity settled stock options awarded to employees under the plan is measured at the fair value at the grant date using the Black-Scholes valuation model and is recognized using the graded vesting method over the vesting period of the options granted. Compensation expense recognized is adjusted to reflect the number of options that has been estimated by Management for which conditions attaching to service will be fulfilled as of the grant date until the vesting date so that the ultimately recognize expense corresponds to the options that have actually vested. The compensation expense credit is attributed to contributed surplus when the expense is recognized in income or loss. When options are exercised or shares are purchased, any consideration received from employees as well as the related compensation cost recorded as contributed surplus are credited to share capital.

Non-employee equity-settled share-based payments are measured at the fair value of the goods and services received, except where that fair value cannot be estimated reliably. If the fair value cannot be measured reliably, non-employee equity-settled share-based payments are measured at the fair value of the equity instrument granted, measured at the date the entity obtains the goods or the counterparty renders the service. The Corporation subsequently measures non-employee equity-settled share-based payments at each vesting period and settlement date, with any changes in fair value recognized in the consolidated statement of comprehensive income (loss). Stock-based compensation expense is recognized over the contract life of the options or the option settlement date, whichever is earlier.

EARNINGS PER SHARE

Dilutive earnings per share comprise of employee share-based compensation and broker warrants.

LEASES

LOGO

Corporation is the lessee

Payments made under operating leases are recognized in the consolidated statement of comprehensive income (loss) on a straight-line basis over the term of the lease.

PROVISIONS

Provision for jackpot

Several of the Corporation’s licensees participate in progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the player is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. The Corporation maintains a provision for the reset for each jackpot and the progressive element added as the jackpot game is played. The provision for jackpots at the reporting date is included in provisions (see note 17). The provision is sufficient to cover the full amount of any required payout.

Contingent consideration

The acquisition of Ongame includes contingent consideration of up to €10 million which will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The Corporation has estimated the contingent consideration to be approximately €4 million ($5.66 million CAD), of which (i) €0.67 million ($0.96 million CAD) is recorded in Provisions (see note 17); and (ii) €3.33 million ($4.70 million CAD) was paid.

Provision for minimum revenue guarantee

The sale of WagerLogic Ltd. includes a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the closing, may pay cash consideration if certain revenue targets are not achieved by the InterCasino Business. The Corporation has estimated a provision for the minimum revenue guarantee to be approximately USD$24.81 million ($27.78 million CAD), of which (i) USD$13.75 million ($15.40 million CAD) is recorded in Provisions (see note 17); (ii) USD $4.58 million ($5.13 million CAD) was offset against the promissory note of $10 million CAD; and (iii) USD $6.48 million ($7.25 million CAD) was paid.

ROYALTIES

The Corporation regularly reviews its estimates of future revenues under its license arrangements.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are significant when:

•

the outcome is highly uncertain at the time the estimates are made; or

•

different estimates or judgments could reasonably have been used that would have had a material impact on the consolidated financial statements.

Estimates and their underlying assumptions are reviewed on a regular basis and the effects of any changes are recognized immediately. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

The following areas require Management’s most critical estimates and judgments.

ESTIMATES

Goodwill

The recoverable amount of the operating segment, representing the group of CGUs to which goodwill is allocated, is based on the higher of fair value less costs to sell and value in use. The recoverable amount was calculated as at September 30, 2014, based on fair value less costs to sell. The fair value less cost to sell is the amount for which the CGU could be exchanged between knowledgeable willing parties in an arm’s length transaction, less cost to sell. Management undertakes an assessment of relevant market data, which is the market capitalization of the Corporation and in addition uses a discounted cash flow model. Estimated future cash flows for the first five years were based on the budget and strategic plans. A growth rate of 2.5% was applied to the last year of the strategic plan to derive estimated cash flows beyond the initial five-year period. The post-tax discount rate is also a key estimate in the discounted cash flow model and is based on a representative weighted average cost of capital. The pre-tax discount rate used to calculate the recoverable amount as at September 30, 2014, was 12.00%. As at September 30, 2014, there was no need for impairment.

LOGO

Impairment of other long-lived assets

The key assumptions utilized in the determination of future cash flows represent Management’s best estimate of the range of economic conditions relating to the CGU, and are based on historical experience, economic trends, and communications with other key stakeholders of the Corporation. These key assumptions include the revenue growth rate, EBITDA¹ margin as a percentage of revenues, capital expenditures as a percentage of revenues, and the inflation growth rate. Significant changes in the key assumptions utilized in the determination of future cash flows could result in an impairment charge or reversal of an impairment loss. As at September 30, 2014 and September 30, 2013, there was no need for an impairment charge.

Stock-based compensation and warrants

Research and development investment tax credits

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as undeducted tax losses. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of undeducted tax losses are based on the applicable income tax legislation, regulations and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Corporation’s future financial results.

¹	EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. EBITDA is a non-IFRS measure.

The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. To the extent estimates differ from the actual amounts determined when preparing the final tax returns, earnings would be affected in a subsequent period. As at September 30, 2014 a valuation allowance of $5,574,000 (2013 – $4,314,532) was recorded.

JUDGMENTS

Finance leases

Deferred Development Costs

Estimated useful lives of long-lived assets

Judgment is used to estimate each component of an asset’s useful life and is based on an analysis of all pertinent factors including, but not limited to, the expected use of the asset and in the case of an intangible asset, contractual provisions that enable renewal or extension of the asset’s legal or contractual life without substantial cost, and renewal history. If the estimated useful lives were incorrect, this could result in an increase or decrease in the annual amortization expense, and future impairment charges.

Recent Accounting Pronouncements

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES (AMENDMENTS TO IAS 32)

Effective for annual periods beginning on or after January 1, 2014, on a retrospective basis. Early application is permitted. If an entity applies this amendment earlier than required, it shall disclose that fact and shall also make the disclosures required by Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued in December 2011.

The Corporation has not yet assessed the impact of the adoption of this standard on its consolidated financial statements.

LOGO

RECOVERABLE AMOUNT DISCLOSURES FOR NON-FINANCIAL ASSETS: AMENDMENTS TO IAS 36

The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014. Earlier application is permitted for periods when the entity has already applied IFRS 13.

IFRS 9, FINANCIAL INSTRUMENTS

The IASB added to IFRS 9 impairment requirements related to the accounting for expected credit losses on an entity’s financial assets and commitments to extend credit.

IFRS 15, REVENUES FROM CONTRACTS WITH CUSTOMERS

•

Step 1: Identify the contract(s) with a customer.

•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Off Balance Sheet Arrangements

The Corporation’s commitments under lease agreements for premises, hardware support contracts, and purchase obligations aggregate to approximately $93,750,000. The minimum annual payments are as follows:


	$000’s
Within one year		18,259
Later than one year but not later than 5 years		33,934
More than 5 years		41,377

OUTSTANDING SHARE DATA

As at November 13, 2014, the Corporation had a total of 132,559,035 common shares issued and outstanding, 1,139,356 preferred shares issued and outstanding, 10,255,415 options issued under the Corporation’s stock option plan, and 16,267,890 share purchase warrants issued and outstanding.

BUSINESS RISKS AND UNCERTAINTIES

The Corporation’s current principal risks and uncertainties as identified by Management are described below:

•

The manufacture and distribution of gaming solutions is subject to extensive scrutiny and regulation at all levels of government;

•

LOGO

•

The Corporation’s ability to make scheduled payments on or to refinance its debt obligations and to make distributions to enable it to service its debt obligations depends on its financial and operating performance. If the Corporation’s cash flows and capital resources are insufficient to fund its debt service obligations, it may be forced to reduce or delay activities and capital expenditures, sell assets, seek additional capital, or restructure or refinance its indebtedness;

•

The Corporation is heavily dependent on the gaming industry. A decline in demand for the Corporation’s products in the gaming industry could adversely affect its business;

•

Achieving the benefits of the Oldford Group acquisition depends in part on successfully supporting the B2C Business’s growth initiatives and operations in a timely and efficient manner, as well as Amaya’s ability to realize the anticipated growth and development opportunities. The process will require the dedication of management effort, time and resources which may divert management’s focus and resources from other strategic opportunities and from operational matters during this process. These decisions will present challenges to management and special risks pertaining to possible unanticipated liabilities, unanticipated costs, and the potential loss of key employees. This process may result in the loss and the disruption of ongoing business, customer and employee relationships that may adversely affect Amaya’s ability to achieve the anticipated benefits of the acquisition and as a result of these factors, it is possible that the anticipated benefits of the acquisition and the growth of Amaya and the B2C Business will not be realized.

LOGO

•

The Corporation incurred a substantial amount of indebtedness to finance a portion of the Purchase Price related to the Oldford Group acquisition payable at closing with funds available through the Credit Facilities. Amaya believes that the Buyer will be able to satisfy all financial covenants and make all payments of principal and interest required thereunder. However, in the event that the Buyer does not generate sufficient cash flow, including revenues expected to be generated as a result of the Acquisition, there is a risk that the Buyer may not be able to satisfy all financial covenants set forth in, and/or satisfy all of its payment obligations with respect to the indebtedness incurred pursuant to the Credit Facilities. Any such failure to generate revenues or satisfy its obligations under such definitive documentation could have a material adverse effect on Amaya’s business, results from operations and financial condition.

•

In connection with the Oldford Group acquisition, a significant number of additional common shares and securities convertible or exchangeable into common shares were issued. The increase in the number of common shares issued and issuable may lead to sales of the common shares or the perception that such sales may occur, either of which may adversely affect the market for, and the market price of, common shares. Moreover, the potential that any significant holder of common shares may sell its common shares in the public market (commonly referred to as “market overhang”) as well as any actual sales of such common shares could adversely affect the market price of the common shares.

•

All historical information relating to the Oldford Group presented in, or due to lack of information omitted from, Corporation documents filed on SEDAR, including its Management Information Circular and Business Acquisition Report, including all financial information of the Oldford Group, has been provided in exclusive reliance on the information made available by the Oldford Group and their respective representatives. Although the Corporation has no reason to doubt the accuracy or completeness of the Oldford Group’s information provided therein, any inaccuracy or omission in such information contained could result in unanticipated liabilities or expenses, increase the cost of integrating Amaya and Oldford or adversely affect the operational plans of the combined entities and its results of operations and financial condition.

LOGO

Cautionary Note Regarding Forward Looking Statements

Further Information

Additional information on the Corporation, including the Annual Information Form, may be obtained on SEDAR at www.sedar.com.

Montreal, Quebec

November 13, 2014

(Signed) “Daniel Sebag”

Daniel Sebag, CPA, CA

Chief Financial Officer

LOGO

EX-99.38

Exhibit 99.38

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David Baazov, Chief Executive Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended September 30, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2014 and ended on September 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 14, 2014

/s/ David Baazov

David Baazov

Chief Executive Officer

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EX-99.39

Exhibit 99.39

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Daniel Sebag, Chief Financial Officer of Amaya Gaming Group Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Amaya Gaming Group Inc. (the “issuer”) for the interim period ended September 30, 2014.

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)

(b)

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2	ICFR – material weakness relating to design: N/A

5.3	Limitation on scope of design: N/A

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2014 and ended on September 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 14, 2014

/s/ Daniel Sebag

Daniel Sebag

Chief Financial Officer

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EX-99.40

Exhibit 99.40

AMAYA GAMING GROUP INC.

NOTICE OF CHANGE OF AUDITOR

PURSUANT TO NATIONAL INSTRUMENT 51-102


TO:		Richter LLP (“Richter”)
		Deloitte LLP (“Deloitte”)

AND TO:		Autorité des marchés financiers
		Ontario Securities Commission
		Alberta Securities Commission
		British Columbia Securities Commission
		The Manitoba Securities Commission
		Financial and Consumer Affairs Authority of Saskatchewan

RE:		Notice Regarding Change of Auditor Pursuant to Section 4.11 of National
		Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”)

Dear Sirs/Mesdames:

Notice is hereby given, pursuant to Section 4.11 of NI 51-102, of a change of auditor of Amaya Gaming Group Inc. (the “Corporation”).

The former auditors of the Corporation resigned at the Corporation’s request.

The resignation of Richter and appointment of Deloitte in their place has been approved by the Board.

There have been no reservations contained in the former auditor’s reports on any of the Corporation’s financial statements relating to the two most recently completed financial years.

There are no reportable events (as defined under 4.11(1) of NI 51-102).

Signed this 26^th day of September 2014.


AMAYA GAMING GROUP INC.

By:	(signed) Daniel Sebag
	Name:	Daniel Sebag
	Title:	Chief Financial Officer

EX-99.41

Exhibit 99.41

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Gaming Group Inc. (“Amaya” or the “Corporation”)

7600 TransCanada Hwy

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

February 11, 2014.

3.	News Release

A news release reporting the material change was issued on February 11, 2014 in Canada through CNW and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On February 11, 2014, Amaya announced that, pursuant to a share purchase agreement dated November 27, 2013 (the “Share Purchase Agreement”), one of its subsidiaries completed the previously announced sale to Goldstar Acquisitionco Inc. of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“WagerLogic”) for $70 million (the “Purchase Price”), less a closing working capital adjustment of $7.5 million, satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date. The Purchase Price is subject to customary post-closing adjustments. Subsidiaries of Amaya will continue to supply WagerLogic with software, services and content pursuant to a services agreement.

5.	Full Description of Material Change

Reference is made to the press release attached as Schedule “A” hereto.

6.	Reliance on Subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information please contact:

Amaya Gaming Group Inc.

Mr. David Baazov

President and Chief Executive Officer

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

February 21, 2014.

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Schedule “A”

(attached)

Amaya announces closure of sale of WagerLogic

LOGO

MONTREAL, Canada – February 11, 2014 – Amaya Gaming Group Inc. (“Amaya” or the “Corporation”) (TSX: AYA), an entertainment solutions provider for the regulated gaming industry, announced today that, pursuant to a share purchase agreement dated November 27, 2013 (the “Share Purchase Agreement”), one of its subsidiaries has completed the previously announced sale to Goldstar Acquisitionco Inc. (“Goldstar”) of all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“WagerLogic”) for $70 million (the “Purchase Price”), less a closing working capital adjustment of $7.5 million, satisfied through cash consideration of $52.5 million and a vendor take-back in the form of a promissory note of $10 million, bearing interest at 6.0% per annum payable semi-annually in arrears starting in the second year following the closing date and due on the fourth anniversary of the closing date. The Purchase Price is subject to customary post-closing adjustments.

WagerLogic, through a subsidiary, is an online casino operator through its “Inter” brand consisting of InterCasino™, InterPoker™ and InterBingo™, amongst other online names (the “InterCasino Business”). Revenue and net income of the InterCasino Business were US$8.0 million and US$1.8 million respectively for the nine month period ended September 30, 2013. Revenue and net income for the full year 2012 were US$17.2 million and US$5.8 million respectively.

Subsidiaries of Amaya will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to a services agreement.

Osler, Hoskin & Harcourt LLP served as Canadian counsel to Amaya and its subsidiaries and Chitiz Pathak LLP advised Goldstar in connection with the transaction.

ABOUT AMAYA

DISCLAIMER IN REGARDS TO FORWARD-LOOKING STATEMENTS

Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, the Corporation does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

For inquiries, please contact:

Tim Foran

Director, Investor Relations

+1.416.545.1453 EXT. 5833

ir@amayagaming.com

EX-99.42

Exhibit 99.42

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Gaming Group Inc. (“Amaya” or the “Corporation”)

7600 TransCanada Highway

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

May 15, 2014

3.	News Release

A news release reporting the material change was disseminated by the Corporation on May 15, 2014 through CNW and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On May 15, 2014, Amaya announced that its wholly-owned subsidiary, Cadillac Jack, Inc. (“Cadillac Jack”) obtained credited facilities from FS Investment Corporation and FS Investment Corporation II for the purpose of financing working capital expenses and general corporate purposes of the Amaya group (the “Credit Facilities”). These lending entities are advised by FB Income Advisor, LLC and FSIC II Advisor, LLC, respectively, and sub-advised by an affiliate of GSO Capital Partners LP, Blackstone’s credit business.

The Credit Facilities provide for (i) an incremental USD$80 million term loan to Cadillac Jack’s existing USD$160 million senior term loan, with the new aggregate principal amount of USD$240 million bearing interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”), and (ii) a mezzanine debt in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, that interest accruing at a per annum rate of 7% may instead by paid in-kind in lieu of cash (the “Mezzanine Facility”). In connection with the Mezzanine Facility, Amaya granted 4 million common share purchase warrants (the “Warrants”) to the lenders. Each Warrant entitles the holders thereof to acquire one common share of Amaya (a “Common Share”) at a price per Common Share equal to CAD$15 at any time up to a period ending 10 years after the closing date. The grant of the Warrants is subject to the final approval of the Toronto Stock Exchange.

5.	Full Description of Material Change

Reference is made to the press release attached as Schedule “A” hereto.

6.	Reliance upon subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information, please contact:

Amaya Gaming Group Inc.

Mr. David Baazov

President and Chief Executive Officer

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

May 16, 2014.

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SCHEDULE “A”

PRESS RELEASE

Please see attached.

NEWS RELEASE

Amaya Gaming Group announces its 2014 first quarter financial results

LOGO

Revenues, adjusted EBITDA increase; net income driven by WagerLogic sale

MONTREAL, Canada, May 15, 2014 – Amaya Gaming Group Inc. (“Amaya” or the “Corporation”) (TSX: AYA), an entertainment solutions provider for the regulated gaming industry, today announced its financial results for the quarter ended March 31, 2014. All amounts are stated in Canadian dollars unless otherwise noted.

FINANCIAL HIGHLIGHTS


FOR THE THREE MONTH PERIODS ENDED MARCH 31	Q1 2014 $			Q1 2013 $
(i) Revenues	(ii)	41,202,223		(iii)	38,053,247

(iv) Net Income	(v)	39,643,610		(vi)	(7,440,841	)

(vii) Basic earnings per share	(viii) $	0.42		(ix) $	(0.09	)

(x) Diluted earnings per share	(xi) $	0.38		(xii) $	(0.09	)

(xiii) Adjusted EBITDA¹	(xiv)	14,864,663		(xv)	11,996,790

(xvi) Adjusted EBITDA¹margin (as % of revenue)	(xvii)	36	%	(xviii)	32	%

(xix) Adjusted net earnings ²	(xx)	3,312,031			3,838,454

(xxi) Basic adjusted net earnings²per share	(xxii) $	0.04		$	0.05

(xxiii) Diluted adjusted net earnings²per share	(xxiv) $	0.03		$	0.04

FIRST QUARTER AND SUBSEQUENT HIGHLIGHTS

•

On May 15, 2014, Amaya’s wholly-owned subsidiary Cadillac Jack, Inc. (“Cadillac Jack”) obtained credit facilities from FS Investment Corporation and FS Investment Corporation II for the purpose of financing working capital expenses and general corporate purposes of the Amaya group. These lending entities are advised by FB Income Advisor, LLC and FSIC II Advisor, LLC, respectively, and sub-advised by an affiliate of GSO Capital Partners LP, Blackstone’s credit business. The credit facilities provide for (1) an incremental USD$80 million term loan to Cadillac Jack’s existing USD$160 million senior term loan, with the new aggregate principal amount of USD$240 million bearing interest at a per annum rate equal to LIBOR plus 8.50% with a 1% LIBOR floor (the “Senior Facility”); and (2) mezzanine debt in the form of a subordinated term loan in the aggregate principal amount of USD$100 million, bearing interest at a per annum rate equal to 13%; provided, at the option of Cadillac Jack, interest accruing at a per annum rate of 7% may instead be paid in-kind in lieu of cash (the “Mezzanine Facility”, and collectively with the Senior Facility, the “New Facilities”). The Senior Facility will mature over a 5-year term and the Mezzanine Facility will mature over a 6-year term from the closing date. The Senior Facility is secured by the assets of Cadillac Jack and its subsidiaries. The Mezzanine Facility is unsecured. Amaya has provided an unsecured guarantee of the obligations under the New Facilities of Cadillac Jack in favour of the lenders. The New Facilities contain customary covenants, including, without limitation, maintenance and incurrence covenants based on certain agreed-upon leverage and coverage ratios. Amaya has agreed to grant the lenders, in relation to the Mezzanine Facility, with 4 million common share purchase warrants, entitling the holders thereof to acquire one common share of Amaya at a price per common share equal to CAD$15 at any time up to a period ending 10 years after the closing date. The grant of the share purchase warrants is subject to the final approval of the Toronto Stock Exchange.

Adjusted EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. Adjusted EBITDA is a non-IFRS measure. Reconciliation to Net Income is included in this release.

Adjusted Net Earnings (loss) as defined by the Corporation means Net earnings (loss) before interest accretion, amortization of Intangible assets resulting from purchase price allocation following acquisitions, stock-based compensation, foreign exchange, and other non-recurring costs. Adjusted Net Earnings (loss) is a non-IFRS measure. Reconciliation to Net Income is included in this release.

Amaya Gaming Group Inc. 3

•

On May 2, 2014, Amaya announced that its subsidiary Cadillac Jack had received approval from New Jersey’s Division of Gaming Enforcement to utilize its Genesis DV1 slot machine platform and associated hardware and software, including top performing game titles Fire Wolf, Siberian Siren, and Legend of White Buffalo, in the state. Cadillac Jack will apply to the DGE for transactional waivers to begin supplying machines to Atlantic City casinos. Subject to receiving the transactional waivers, Cadillac Jack anticipates initial deployment of its gaming machines will begin immediately, with multiple Atlantic City casinos engaged to trial them.

•

On April 16, 2014, Amaya announced that Cadillac Jack has entered into multiple agreements to ship approximately 1,100 gaming machines to existing and new customers in the United States, with installation of the machines anticipated to occur in the second quarter of 2014. The shipments are primarily comprised of outright sales of gaming machines, but also include the upgrading of some existing revenue share generating gaming machines. The majority of units shipped will be Class II machines, but will also include some sales of Class III machines including into Oklahoma and California.

•

On April 16, 2014, Amaya also announced that Cadillac Jack had received a license to provide its land-based solutions to Class III gaming operations in Wisconsin.

•

On March 7, 2014, Amaya announced that it has acquired in aggregate beneficial ownership and control of 1.9 million common shares of WagerLogic’s parent company The Intertain Group Ltd. (TSX: IT) (“Intertain”) (the outstanding securities of Goldstar were exchanged for securities of Intertain in February, 2014) representing 13.97% of the issued and outstanding Intertain common shares. Amaya also owns $3.85 million aggregate principal amount of 5.0% unsecured subordinate convertible debentures of Intertain maturing on December 31, 2018 (TSX: IT.DB), which are convertible at the option of the holder into common shares of Intertain at a price of $6.00 per common share, as well as 353,000 Intertain common share purchase warrants, with each whole warrant being exercisable by the holder for one Intertain common share at an exercise price of $5.00 per share until December 31, 2015. The securities were acquired for investment purposes. Amaya has no current plan or proposal, which relates to, or would result in, acquiring additional ownership or control over the securities of IT.

•

Amaya Gaming Group Inc. 4

business was acquired by Amaya through its acquisition of CryptoLogic. Subsidiaries of Amaya (the “Service Providers”) will continue to supply WagerLogic with software, services and content to power the InterCasino Business pursuant to services agreements. The Share Purchase Agreement provides for a bonus payment of USD $10 million if CryptoLogic Operations Limited (“CryptoLogic Operations”), the wholly-owned operating subsidiary of WagerLogic, achieves a net revenue target of USD $30 million during the second year following closing (payable in 12 monthly instalments during the third year following closing), and a bonus payment of USD $10 million if CryptoLogic Operations achieves a net revenue target of USD $40 million during the third year following closing (payable in 12 monthly instalments during the fourth year following closing). Amaya and its Service Providers have entered into a revenue guarantee agreement (the “WagerLogic Revenue Guarantee”), under which they jointly and severally guarantee the financial obligations of the Service Providers under the service agreements, including an obligation to pay CryptoLogic Operations, during the next two years, an amount equal to the shortfall between CryptoLogic Operation’s quarterly net revenue and a pre-established quarterly net revenue target of USD $4.75 million. Amaya has estimated a provision for the minimum revenue guarantee to be approximately $11.05 million.

“We are very pleased with the progression of our business in the first quarter of 2014,” said David Baazov, President and CEO of Amaya. “The acquisition of Diamond Game has significantly bolstered our Lottery solutions and has provided us with an attractive offering for the large public gaming market. Soon after the acquisition was completed, Diamond Game was awarded a significant contract by Maryland for its instant ticket vending machines. We anticipate rollout of those machines to begin in the third quarter of this year.

“We recorded strong year-over-year growth in revenues from our land-based solutions, through both our installed base of recurring revenue generating leased machines and via sales of gaming machines in the United States and Latin America.”

“Within our interactive solutions, during the quarter and subsequently, we completed the integration of games from numerous leading third party games suppliers onto our Casino Gaming System, for the benefit of our operator partners in Europe and New Jersey. This is a process that is continuing as we execute on our strategy of being a leading aggregator of games content for online casinos.

“To increase our market share within existing customers and to attract new customers, we have also been actively developing new and innovative online and mobile games content through our proprietary games studios. During the first quarter, we launched approximately a half dozen games, including jackpot slots featuring Superman and Wonder Woman. We expect to roll out more games in the second quarter including multiple mobile slots. Additionally, we are continuing the development of more new branded content featuring DC Comics-inspired characters pursuant to the licensing agreement we extended with Warner Bros. last year.

“Our bottom line was boosted during the quarter by our sale of WagerLogic, which was one of two assets we classified as held for sale during the fourth quarter of 2013. We anticipate announcing further details on an agreement to sell the other during the second quarter. The sale of WagerLogic has resulted in us having a very strong cash balance. Combined with the refinancing of Cadillac Jack’s debt completed yesterday, our balance sheet is positioned to support both our organic growth and potential strategic acquisitions, particularly those that would bolster our current solutions offering significantly and/or enable us to compete more significantly in new verticals,” Mr. Baazov concluded.

FINANCIAL RESULTS

Revenue for the three month period ended March 31, 2014 was $41.20 million compared to $38.05 million for the three month period ended March 31, 2013, representing an increase of 8%. This was driven by an increase in gaming machines sold outright and under finance lease. On a regional basis, revenue in Q1 2014 was primarily concentrated in North America, Latin America and the Caribbean, and Europe.

Total expenses, comprised of cost of goods sold, selling, general and administrative, and financial expenses as well as acquisition-related costs, were $49.59 million for the three month period ended March 31, 2014, compared to $44.74 million for the three month period ended March 31, 2013, an increase of 11%. The percentage increase was driven by non-recurring acquisition related costs related primarily to the acquisition of Diamond Game and the sale of WagerLogic during Q1 2014; higher cost of products expense reflecting the increased sales of gaming machines in Q1 2014 vs Q1 2013; increased general and administrative expense driven by increased salaries and maintenance and repairs expenses due to the addition of Diamond Game, as well as higher depreciation and amortization expenses; partially offset by lower interest and bank charges and a positive impact from foreign exchange.

Net income in the first quarter of 2014 was $39.64 million, or $0.42 per basic share and $0.38 per diluted share. Net loss in Q1 2013 was $7.44 million, or $(0.09) per basic and diluted common share. Net income in Q1 2014 was driven by the gain on sale of WagerLogic as well as income from investments.

Amaya Gaming Group Inc. 5


Adjusted EBITDA Reconciliation $	Q1 2014			Q1 2013
Net Income		39,643,610			(7,440,841	)
Financial expenses		1,061,025			6,212,059
Current income taxes		4,103,602			689,914
Deferred income taxes		(2,179,107	)		64,502
Depreciation of property and equipment		3,666,343			3,395,010
Amortization of deferred development costs		710,173			131,482
Amortization of intangible assets		5,402,718			4,125,252
Stock-based compensation		753,563			431,622

EBITDA		53,161,927			7,609,000
Termination of employment agreements		1,077,618			1,447,828
Termination of agency agreements		—			100,834
Gain on sale of investments		(49,373,224	)		—
Gain on marketable securities		(684,000	)		—
Office shut down costs		309,219			—
Acquisition-related costs		3,653,589			309,479
Net Adjusted EBITDA loss from assets & liabilities classified as held for sale		5,408,753			1,732,774
Other one-time costs		1,310,781			796,875

Adjusted EBITDA		14,864,663			11,996,790


Adjusted Net Income Reconciliation $	Q1 2014			Q1 2013
Net Income		39,643,610			(7,440,841	)
Other one-time costs		1,310,781			796,875
Termination of employment agreements		1,077,618			1,447,828
Termination of agency agreements		—			100,834
Gain on marketable securities		(684,000	)		—
Office shut down costs		309,219			—
Acquisition-related costs		3,653,589			309,479
Foreign exchange		(3,820,684	)		483,392
Gain on sale of investments		(49,373,224	)		—
Net adjusted loss of assets & liabilities classified as held for sale		6,196,677			2,148,347
Amortization of purchase price allocation Intangibles		3,801,781			3,438,311
Interest accretion		443,100			2,122,607
Stock-based compensation		753,563			431,622

Adjusted net income		3,312,031			3,838,454

Amaya Gaming Group Inc. 6

2014 FULL YEAR FINANCIAL GUIDANCE

Amaya has set the following 2014 full year financial targets;

•

Revenue of $193 to $203 million

•

Adjusted EBITDA of $77 to $86 million

FIRST QUARTER 2014 FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS

The financial statements, notes to financial statements and Management’s Discussion and Analysis for the quarter ended March 31, 2014, will be available on the SEDAR website at www.sedar.com.

CONFERENCE CALL

Amaya will host a conference call on Friday, May 16, 2014 at 9:00 a.m. ET to discuss its 2014 first quarter financial results. David Baazov, CEO of Amaya, will chair the call. To participate in the call, please dial 647-427-7450 or 1-888-231-8191 ten minutes prior to the scheduled start of the call. A replay of the conference call will be available until May 23, 2014 by calling 1-416-849-0833 or 1-855-859-2056, reference number 45946225. The conference call will be webcast live at www.newswire.ca/en/webcast/detail/1353853/1497903.

ABOUT AMAYA

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and gaming machines. Some of the world’s largest gaming operators and casinos are powered by Amaya’s interactive, land-based, and lottery solutions. Amaya is present in major gaming markets in the world with offices in North America, Latin America and Europe.

DISCLAIMER IN REGARDS TO FORWARD-LOOKING STATEMENTS

Certain statements included herein, including those that express management’s expectations or estimates of our future performance constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward looking statements. Except as required by law, the Corporation does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

For investor or media inquiries, please contact:

Tim Foran

Tel: +1.416.986.8515

ir@amayagaming.com

EX-99.43

Exhibit 99.43

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Gaming Group Inc. (“Amaya” or the “Corporation”)

7600 TransCanada Highway

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

June 12, 2014

3.	News Release

A news release reporting the material change was disseminated by the Corporation on June 12, 2014 through CNW and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On June 12, 2014, Amaya and privately held Oldford Group Limited (“Oldford Group”), the parent company of Rational Group Ltd., announced that they entered into a definitive agreement for the Corporation (the “Agreement”) to acquire 100% of the issued and outstanding shares of Oldford Group in an all-cash transaction for an aggregate purchase price of US$4.9 billion (the “Transaction”). The Transaction will result in Amaya becoming the world’s largest publicly-traded online gaming company.

Under the terms of the Agreement, a wholly owned subsidiary of Amaya will pay US$4.9 billion to the holders of Oldford Group securities, which amount will be satisfied by a US$50 million deposit, and a cash payment of US$4.45 billion at dosing of the Transaction, as adjusted in accordance with debt and working capital provisions set out in the Agreement, and with a deferred payment of US$400 million which shall be subject to adjustment, payable upon the earlier of (i) July 31, 2017, and (ii) 30 months following closing of the Transaction, based upon the occurrence of certain events. If the Agreement is terminated prior to closing of the Transaction, under certain circumstances. Oldford Group will be entitled to retain the US$50 million deposit, which amount may be increased by increments of US$10 million under certain circumstances.

The purchase price payable in connection with the Transaction will be financed through a combination of cash on hand, new debt, a private placement of subscription receipts (the “Subscription Receipts”) a private placement of common shares (the “Common Shares”) and a private placement of non-voting convertible preferred shares (the “Preferred Shares”). The debt component will be comprised of a (a) US$2.1 billion secured facilities, consisting of a US$2.0 billion first lien term loan, and (b) US$100 million revolving credit facility, and a US$800 million senior secured second lien term loan. The equity financing will consist of a (a) US$1.050 billion offering of Preferred Shares on a private placement basis at an initial conversion price of C$24 per Common Share, (b) a C$500 million Subscription Receipt Offering on a bought-deal private placement basis with an underwriters’ option to purchase up to C$140 million of Subscription Receipts, (c) as well as a commitment from GSO Capital Partners L.P. and affiliated entities (“GSO”), the credit division of The Blackstone Group, to purchase US$55 million of Common Shares on closing of the Transaction (the “GSO Common Share Subscription”). In addition to the GSO Common Share Subscription, GSO has also agreed to participate in the debt financing and to subscribe for US$600 million in Preferred Shares. An investment manager (the “Investment Manager”), on behalf of its clients, has agreed to participate in the debt financing, to subscribe for approximately US$270 million in Preferred Shares, and to purchase approximately US$55 million of subscription receipts. In connection with the Transaction, and as consideration for a portion of the fees payable and for GSO’s and the Investment Manager’s significant role in the financing of the Transaction, the Corporation has granted 11 million common share purchase warrants to GSO and 1.75 million common share purchase warrants to the Investment Manager, each with an exercise price of C$0.01 and exercisable for a term of 10 years (collectively, the “Warrants”).

Completion of the Transaction will be subject to the approval by Amaya’s shareholders and to customary closing conditions, including receipt of all regulatory approvals and that of the Toronto Stock Exchange regarding the Transaction and the listing of the common shares issuable in connection with the Transaction, including those underlying the Warrants, the Subscription Receipts and the Preferred Shares. Amaya and Oldford Group anticipate that the Transaction will be completed on or about September 30, 2014.

5.	Full Description of Material Change

Reference is made to the press releases attached as Schedule “A” hereto.

- 2 -

6.	Reliance upon subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information, please contact:

Amaya Gaming Group Inc.

Mr. David Baazov

President and Chief Executive Officer

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

June 23, 2014.

- 3 -

SCHEDULE “A”

PRESS RELEASES

Please see attached.

Amaya Agrees to Acquire Rational Group, Owner of PokerStars and Full Tilt Poker, for $4.9 Billion

/NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES/

Acquisition Creates World’s Largest Publicly-Traded Online Gaming Company

MONTREAL, CANADA and ONCHAN, ISLE OF MAN, June 12, 2014 /CNW/ - Amaya Gaming Group Inc. (TSX AYA) (“Amaya” or the “Corporation”) and privately held Oldford Group Limited (“Oldford Group”), the parent company of Rational Group Ltd. (“Rational Group”), the world’s largest poker business and owner and operator of the PokerStars and Full Tilt Poker brands, announced today they have entered into a definitive agreement (the “Agreement”) for the Corporation to acquire 100% of the issued and outstanding shares of Oldford Group in an all-cash transaction for an aggregate purchase price of $4.9 billion (the “Purchase Price”), including certain deferred payments and subject to certain other customary adjustments (the “Transaction”). All $ figures are in US dollars unless noted otherwise.

KEY TRANSACTION HIGHLIGHTS

•

The Transaction will result in Amaya becoming the world’s largest publicly-traded online gaming company. The online poker platforms PokerStars and Full Tilt Poker are collectively the world’s most popular and profitable online poker brands with more than 85 million registered players on desktop and mobile devices.

•

For calendar year 2013, pro forma combined revenue, EBITDA and adjusted EBITDA¹ of Amaya and Oldford Group were $1.3 billion, $474.8 million and $473.8 million, respectively. For 2014, the Corporation is projecting pro forma adjusted EBITDA, assuming the Transaction had been completed as of January 1, 2014, of between $600 and $640 million.

•

The Transaction combines complementary businesses with minimal overlap: Isle of Man-headquartered Rational Group’s B2C poker business including PokerStars. Full Tilt Poker, live poker tours and events, and online and TV poker programming; and Montreal-headquartered Amaya’s B2B interactive and physical casino and lottery gaming solutions.

•

Under the terms of the Transaction, Oldford Group shareholders led by Mark Scheinberg, founder and Chief Executive Officer, will dispose of their shares to a wholly-owned subsidiary of Amaya. Mr. Scheinberg and other principals of Oldford Group will resign from all positions with Oldford Group and its subsidiaries on completion of the Transaction.

•

Rational Group’s executive management team will be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the Transaction, with players continuing to enjoy uninterrupted access to their gaming experience.

•

The boards of directors of both Amaya and Oldford Group unanimously approved the Agreement.

•

The Transaction will be financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares.

•

Affiliates of GSO Capital Partners LP (“GSO”), the credit division of The Blackstone Group (NYSE:BX), have agreed to participate in the debt financing, to subscribe for $600 million in convertible preffered shares, and to purchase $55 million of common shares of the Corporation with each common share priced at C$20 upon closing of the Transaction.

•

An investment manager (the “Investment Manager”), on behalf of its clients, has agreed to participate in the debt financing, to subscribe for approximately $270 million in convertible preferred shares, and to purchase approximately $55 million of subscription receipts.

•

No change related to this Transaction is contemplated for Amaya’s Board of Directors.

Adjusted EBITDA as used by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. Adjusted EBITDA is a non-IFRS measure. Amaya believes this non-IFRS financial measure provides useful information to both management and investors in measuring financial performance, the ability to fund future working capital needs, to service outstanding debt, and to fund future capital expenditures. This measure does not have a standard meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, and should not be construed as an alternative to other financial measures determined in accordance with IFRS. Other issues may calculate adjusted EBITDA differently.

“This is a transformative acquisition for Amaya, strengthening our core B2B operations with a consumer online powerhouse that creates a scalable global platform for growth,” said David Baazov, CEO of Amaya. “Mark Scheinberg pioneered the online poker industry, building a remarkable business and earning the trust of millions of poker players by delivering the industry’s best game experiences, customer service and online security. Working with the experienced executive team at Rational Group, Amaya will continue that tradition of excellence and accelerate growth into new markets and verticals.”

Rational Group Founder and CEO Mark Scheinberg said “I am incredibly proud of the business Isai and I have built over the last 14 years, creating the words biggest poker company and a leader in the iGaming space. Our achievements and this transaction are an affirmation of the hard work, expertise and dedication of our staff, which I am confident will continue to drive the company’s success. The values and integrity which have shaped this company are deeply ingrained in its DNA. David Baazov has a strong vision for the future of the Rational Group which will lead the company to new heights.”

Amaya believes the Transaction will expedite the entry of PokerStars and Full Tilt Poker into regulated markets in which Amaya already holds a footprint, particularly the U.S.A. Additionally, Amaya will provide an extensive selection of its online casino games to expand the Nascent Full Tilt Poker casino platform. Amaya Intends to strongly support Rational Group’s growths initiatives in new gaming verticals, including casino, sportsbook and social gaming, and new geographies.

In recent years, Amaya has experienced rapid growth, partly through strategic acquisitions that have strengthened its core offering of B2B technology-based gaming solutions. Amaya has an expansive footprint in regulated markets in the U.S.A, Canada and Europe through the provision of its online, land-based and lottery solutions to licensed commercial, tribal and charitable gaming operations as well as government lotteries and gaming control agencies.

Rational Group’s core business is PokerStars, launched in 2001. Since then, PokerStars has become the world’s largest online poker site hosting the most players, offering the largest prize pools and the greatest variety of poker games to millions of players.

PokerStars set a Guinness World Record in June 2013 when 225,000 players competed in a single online poker tournament. Together with Full Tilt Poker Rational Group holds a majority of the global market share in real money online poker and is a leader in almost every regulated market in which it operates. Rational Group holds online poker licenses in 10 jurisdictions- more than any other gaming company - including the major European markets of France, Italy and Spain, Rational Group is also the world’s largest producer of live poker events and poker programming for television and online audiences.

Rational Group employs more than 1,700 people globally and is consistently selected as one of the “Best Workplaces” in the UK, Ireland and Costa Rica by the Great Places to Work Institute.

FINANCIAL INFORMATION

In calendar years 2012 and 2013, Oldford Group recorded revenues of $976 million and $1.1 billion, respectively, and adjusted EBITDA of $342 million and $420 million, respectively. Its cash flow from operations in 2012 and 2013 was $267 million and $317 million, respectively. The Transaction is expected to be immediately accretive to earnings and provide strong cash flow from operations for Amaya.

TRANSACTION DETAILS AND CLOSING CONDITIONS

Under the terms of the Agreement, a wholly owned subsidiary of Amaya will pay $4.9 billion to the holders of Oldford Group securities, which amount will be satisfied by a $50 million deposit made on the date hereof and a cash payment of $4.45 billion at closing of the Transaction, as adjusted in accordance with debt

and working capital provisions set out in the Agreement, and with a deferred payment of $400 million which shall be subject to adjustment, payable upon the earlier of (i) July 31, 2017, and (ii) 30 months following closing of the Transaction, based upon the occurrence of certain events. If the Agreement is terminated prior to closing of the Transaction, under certain circumstances Oldford Group will be entitled to retain the $50 million deposit, which amount may be increased by increments of $10 million under certain circumstances.

In connection with the Transaction, and as consideration for GSO’s and the Investment Manager’s significant role in the financing of the Transaction, the Corporation has granted 11 million common share purchase warrants to GSO (the “GSO Warrants”) and 1.75 million common share purchase warrants to the Investment Manager (the “Investment Manager Warrants”, collectively with the GSO Warrants, the “Warrants”), each with an exercise price of C$0.01 and exercisable for a term of 10 years, as payment for a portion of the fees payable to the two parties.

Completion of the Transaction will be subject to the approval by Amaya’s shareholders and to customary closing conditions, including receipt of all regulatory approvals and that of the TSX regarding the Transaction and the listing of the common shares issuable in connection with the Transaction, including those underlying the Warrants, the subscription receipts and the convertible preferred shares. Amaya and Oldford Group anticipate that the Transaction will be completed on or about September 30, 2014.

David Baazov, Amaya’s founder, chairman and CEO, along with several other Amaya shareholders, which combined own approximately 28% of Amaya’s existing common shares as of yesterday, have entered into voting agreements in support of the resolutions relating to the Transaction to be passed at the upcoming shareholder meeting.

PURCHASE PRICE FINANCING DETAILS

The Purchase Price will be paid using a combination of cash on hand, new credit facilities and equity financing, allocated as follows:

•

$2.1 billion senior secured credit facilities, consisting of a $2.0 billion first lien term loan and a $100 million revolving credit facility fully underwritten by Deutsche Bank AG New York Branch (“Deutsche Bank”), Barclays Bank PLC (“Barclays”), and Macquarie Capital (USA) Inc. (“Macquarie Capital”).

•

$800 million senior secured second lien term loan fully underwritten by Deutsche Bank, Barclays, and Macquarie Capital, with participation from GSO and the Investment Manager.

•

$1 billion to be raised through the issuance of convertible preferred shares on a private-placement basis at an initial conversion price of C$24 per convertible preferred share.

•

C$500 million to be raised through the issuance of subscription receipts convertible on a one-to-one basis into common shares upon completion of the Transaction on a bought-deal private-placement basis, and an Underwriters’ Option to purchase subscription receipts for additional gross proceeds of up to C$140 million and a commitment from GSO to purchase common shares for additional gross proceeds of up to $55 million.

•

Remainder of the balance payable in cash.

The combined company’s significant cash flow should allow for rapid debt repayment and provide Amaya with sufficient liquidity and flexibility to support ongoing growth prospects.

Subscription Receipt Offering

Amaya has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (“Canaccord Genuity”), Cormark Securities Inc. (“Cormark”) and Desjardins Capital Markets (“Desjardins”) (collectively, the “Lead Underwriters”), and Clarus Securities pursuant to which the Lead Underwriters and Clarus Securities have agreed to purchase from treasury, on a bought-deal private placement basis, 25 million subscription receipts of the Corporation (the “Subscription Receipts”) at a price of C$20 per Subscription Receipt (the “Subscription Price”), for aggregate gross proceeds to Amaya of C$500 million. Amaya has also granted the Lead Underwriters an option to purchase up to an additional 7 million Subscription Receipts at the Subscription Price for additional gross proceeds of up to C$140 million, exercisable at any time up to 48 hours prior to the closing date of the Subscription Receipt offering (the “Underwriters’ Option”).

The Subscription Receipts will be automatically converted, without additional payment, into common shares of the Corporation on a one-to-one basis upon completion of the Transaction. If the Transaction is not completed within six months from the closing date of the Subscription Receipt offering, then the Subscription Receipts shall be automatically terminated and cancelled and the principal amount subscribed plus accrued interest will be returned to the holders of the Subscription Receipts in accordance with the terms of the subscription receipt agreement.

The Subscription Receipt offering is expected to close on or about July 7, 2014. Completion of the Subscription Receipt offering is subject to certain conditions, including receipt of the approval of the TSX and all other necessary regulatory approvals.

Net proceeds from the Subscription Receipt offering will be used by the Corporation to partially fund the Purchase Price payable in connection with the Transaction.

25 million common shares of the Corporation will be issued upon conversion of the Subscription Receipts to be sold under the Subscription Receipt offering, representing 21% of the Corporation’s concurrently issued and outstanding common shares on a non-diluted basis. If the Underwriters’ Option is exercised, 7 million common shares of the Corporation will be issued upon conversion of these Subscription Receipts representing 6% of the Corporation’s concurrently issued and outstanding common shares on a non-diluted basis.

The Subscription Price represents a premium of approximately 66.4% to the closing price of C$12.02 per common share on the TSX on June 11, 2014 and a premium of approximately 108.5% over the 30-trading day volume-weighted average price of C$9.59 per common share on the TSX up to and including June 11, 2014.

Convertible Preferred Share Offering

Amaya has entered into an agreement with Canaccord Genuity pursuant to which Canaccord Genuity has agreed to purchase from treasury, on an underwritten bought-deal private placement basis, $130 million of convertible preferred shares of the Corporation (the “Convertible Preferred Shares”).

The Corporation has also entered into Commitment Letters, pursuant to which (a) GSO has agreed to purchase $600 million of Convertible Preferred Shares, and (b) the Investment Manager has agreed to purchase approximately $271 million of Convertible Preferred Shares.

The Convertible Preferred Shares will not be listed on any exchange but, subject to legal limitations, will be freely transferable at the option of a holder.

Each Convertible Preferred Share has an initial principal amount of C$1,000 and is convertible at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually.

The Corporation may, at any time after the first (3) years of issuance, give notice of its election to cause all of the outstanding Convertible Preferred Shares to be automatically converted, subject to certain conditions.

The Corporation expects the delivery of the Convertible Preferred Shares to occur concurrently with the closing of the Transaction.

The Corporation expects to receive aggregate net proceeds from this offering of approximately $944.25 million, after deducting applicable underwriting and other fees. The Corporation intends to use the net proceeds to partially fund the Purchase Price payable in connection with the Transaction.

It is currently anticipated that the completion of the Convertible Preferred Share offering, the Subscription Receipt offering, the common share purchase commitment and the issuance of Warrants may result in GSO beneficially owning, or having control or direction over more than 20% of the common shares of a fully-diluted basis.

SHAREHOLDER MEETING

In light of the need of certain matters to be approved by shareholders in connection with the Transaction, the Corporation has postponed its annual and special meeting of shareholders previously announced as June 17, 2014. The annual and special meeting of the Corporation’s shareholders (the “Shareholder Meeting”) will now be held on July 30, 2014 with a record date of June 11, 2014. The Corporation has received approval from the TSX in connection with the postponement of the annual meeting of shareholders and will file an amended notice of record date and meeting date on SEDAR at www.sedar.com.

At the Shareholder Meeting, shareholders of Amaya will be asked to consider, and if deemed advisable, pass a resolution to approve the creation of the new class of Convertible Preferred Shares. The creation of the Convertible Preferred Shares will require the approval of two-thirds of the votes cast by shareholders present in person or represented by proxy at the Shareholder Meeting.

The TSX requires that the issuance of the Warrants and certain terms of the Convertible Preferred Shares also be approved by a majority of the votes cast by shareholders present in person or represented by proxy at the Shareholder Meeting.

The board of directions of the Corporation (the “Board”) has, following consultation with its financial and legal advisors, determined that the Transaction is in the best interests of the Corporation, and unanimously recommends that shareholders vote in favour of the resolutions to be passed at the Shareholder Meeting in connection with the Transaction.

Deutsche Bank Securities Inc., in its capacity as one of Amaya’s financial advisors, has provided an opinion to the Board that, subject to the assumptions, limitations, qualifications and conditions set forth therein, the $4.9 billion cash consideration to be paid by Amaya for the acquisition of Oldford Group is fair, from a financial point of view to Amaya, Canaccord Genuity has also provided an opinion to the Board that, subject to the assumptions, limitations, qualifications and conditions set forth therein, the $4.9 billion cash consideration to be paid by Amaya for the acquisition of Oldford Group is fair, from a financial point of view, to Amaya. Copies to the fairness opinions will be included in the management information circular to be mailed to shareholders in anticipation of the Shareholder Meeting.

The Corporation intends to mail a proxy circular in the upcoming weeks to its shareholders in anticipation of the Shareholder Meeting. Details of the Transaction and the matters to be approved by shareholders, including the terms of the Transaction as set out in the Agreement and the rationale for the Board’s decision to enter in the Transaction, will be set out in the proxy circular which will be available on SEDAR under the Corporation’s profile at www.sedar.com once mailed. Shareholders registered on the books of Amaya at the close of business on June 11, 2014 will be entitled to receive notice of, and vote at, the Shareholder Meeting.

ADVISORS

Deutsche Bank Securities Inc. and Canaccord Genuity are acting as lead financial advisors to Amaya in connection with the Transaction. Macquarie Capital and Barclays acted as co-advisors. Houlihan Lokey acted as financial advisor to Oldford Group. Amaya was represented by Osler, Hoskin & Harcourt LLP, and by Greenberg Traurig, LLP acting as U.K., The Netherlands and U.S. counsel, with Fox Rothschild, LLP being retained as special gaming counsel by the Corporation. McCarthy Terault LLP acted as legal advisor to the underwriters with respect to the Subscription Receipt offering and Canadian legal advisor to GSO, with White & Case LLP acting as U.S. and U.K. legal advisor to GSO. The syndicate of lenders under the term loan facilities was represented by Cahill Gordon & Reindel LLP. The securityholders of Oldford Group were represented by Herzog Fox & Neeman and Stikerman Elliott LLP acted as legal advisor to Canaccord Genuity with respect to the Convertible Preferred Share offering.

CONFERENCE CALL AND WEBCAST PRESENTATION

Amaya will host a conference call and webcast presentation accompanied by slides on June 13, 2014 at 8:30 a.m. ET. To access via tele-conference, please dial +1.888.231.8191 or 1.647.427-7450. The playback will be made available two hours after the event at +1.855.859.2056 or +1.416.849.0833. The Conference ID number is 60250512. Media representatives are welcome to participate on the call on a listen-only basis. To access the webcast please use this link: www.newswire.ca/en/webcast/detail/1371129/1519499

ABOUT AMAYA

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and electronic gaming machines and game systems. Some of the world’s largest licensed gaming operations, casinos and lotteries are powered by Amaya’s interactive, land-based, and lottery solutions, including in multiple U.S. states and Canadian provinces, more than 80 Native American tribal jurisdictions, and multiple European jurisdictions. The company supplies online casino games to multiple Atlantic City casinos permitted to provide real money online gaming in New Jersey, the most recent and thus far largest U.S. state to regulate iGaming. For more information, visit www.amayagaming.com.

About The Rational Group

The Rational Group operates gaming and related businesses and brands including PokerStars, Full Tilt Poker, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions and poker programming created for television and online audiences. In addition to operating two of the largest online poker sites where it has dealt more than 100 billion poker hands and held over 800 million online tournaments, the group is the largest producer of live poker events around the world.

DISCLAIMERS

This News Release for Amaya contains forward-looking statements about the proposed acquisition by Amaya of all of the equity securities of Oldford Group. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “project”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may” and “should” and similar expressions. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Amaya’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Amaya’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, as subject to change. Amaya can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

This News Release contains forward-looking statements concerning the combined company’s financial position, cash flow and growth prospects; certain strategic benefits and operational synergies; management of the combined company; the timing of Amaya’s shareholders meeting and publication of related shareholder material; the expected completion date of the proposed transaction; and Amaya’s and Oldford Group’s anticipated future results. The pro forma information set forth in this News Release should not be considered to be what the actual financial position or other results of operations would have necessary been had Amaya and Oldford Group operated as a single combined company as, at, or for the periods stated.

Numerous risks and uncertainties could cause the combined company’s actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: failure to realize anticipated results, including revenue growth from the combined company’s major initiatives; heightened competition, whether from current competitors or new entrants to the marketplace, changes in economic conditions including the rate of inflation or deflation, changes in interest and currency exchange rates and derivative and commodity prices; failure to achieve desired results in labour negotiations; failure to attract and retain key employees or effectively manage succession planning; damage to the reputation of brands promoted by the combined company; new, or changes to current, gaming laws in various jurisdictions; changes in the combined company’s regulatory liabilities including changes in tax laws, regulations or future assessments; new or changes to existing, accounting pronouncements; the risk of violations of law, breaches of the combined company’s policies or unethical behavior, the risk of material adverse effects arising as a result of litigation; and events or series of events may cause business interruptions.

Readers are cautioned that the foregoing list of factors in not exhaustive. Other risks and uncertainties not presently known to Amaya or that Amaya presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional information on these and other factors that could affect the operations or financial results of Amaya or the combined company are included in reports filed by Amaya with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

There can be no assurance that the proposed Transaction will occur or that the anticipated strategic benefits and operational synergies will be realized. The proposed Transaction is subject to various regulatory approvals, including approvals by the TSX, and the fulfillment of certain conditions, and there can be no assurance that any such approvals will be obtained and/or any such conditions will be met. The proposed combination could be modified, restructured or terminated.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Amaya’s expectations only as of the date of this News Release. Amaya disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This News Release is not an offer to sell or the solicitation of an offer to buy any securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described in this News Release have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of such laws.

SOURCE Amaya Gaming Group Inc.

%SEDAR: 00029939EF

For further information:

AMAYA INVESTOR CONTACT:

Tim Foran

Director, Investor Relations

+1.416.545.1325

ir@amayagaming.com

AMAYA MEDIA CONTACT:

Maggie McKeon

Kauffmann Public Affairs

Maggie@kauffmannile.com

RATIONAL GROUP MEDIA CONTACT

Eric Hollreiser

Head of Corporate Communications

The Rational Group

erich@pokerstars.com

CO: Amaya Gaming Group Inc.

CNW 21:24e 12-JUN-14

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

Amaya Announces Upsize of Previously Announced Offering of Convertible Preferred Shares

MONTREAL, CANADA– June 23, 2014 – Amaya Gaming Group Inc. (TSX: AYA) (“Amaya” or the “Corporation”) announced today that it has upsized its previously announced private placement offering of convertible preferred shares of the Corporation (the “Convertible Preferred Shares”) from treasury, on an underwritten bought-deal private placement basis, in order to meet additional demand. The size of the offering was increased by agreement between Amaya and Canaccord Genuity Corp., as sole underwriter, by approximately US$50 million to approximately US$180 million from the previously announced US$130 million. As a result, the total gross proceeds from the issuance of Convertible Preferred Shares will now be US$1,050,000,000. There are no other changes to the previously announced financing. The upsized portion will be offered on the same terms as the previously announced offering of Convertible Preferred Shares. Cannacord Genuity will be paid a fee of 5% in respect of the upsized portion.

Each Convertible Preferred Share has an initial principal amount of C$1,000 and is convertible, at the holder’s option, initially into approximately 41.67 common shares of the Corporation based on the conversion price of C$24 per common share, in each case, subject to adjustments including 6% accretion to the conversion ratio, compounded semi-annually.

The Corporation expects the offering to close concurrently with the closing of the previously announced transaction whereby Amaya has agreed to acquire the Rational Group for an aggregate purchase price of US$4.9 billion. The Corporation intends to use the net proceeds from the issuance of the Convertible Preferred Shares to partially fund the payment of the purchase price for the acquisition of the Rational Group.

AMAYA INVESTOR CONTACT:

Tim Foran

Director, Investor Relations

+1.416.545.1325

ir@amayagaming.com

# # #

ABOUT AMAYA

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and electronic gaming machines and game systems. Some of the world’s largest licensed gaming operators, casinos and lotteries are powered by Amaya’s interactive, land-based, and lottery solutions, including in multiple U.S. states and Canadian provinces, more than 80 Native American tribal jurisdictions, and multiple European jurisdictions. The company supplies online casino games to multiple Atlantic City casinos permitted to provide real money online gaming in New Jersey, the most recent and thus far largest U.S. state to regulate iGaming. For more information, visit www.amayagaming.com.

DISCLAIMERS

estimates, beliefs and assumptions, which are based on Amaya’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Amaya’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Amaya can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Numerous risks and uncertainties could cause the company’s actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: failure to realize anticipated results, including revenue growth from the company’s major initiatives; heightened competition, whether from current competitors or new entrants to the marketplace, changes in economic conditions including the rate of inflation or deflation, changes in interest and currency exchange rates and derivative and commodity prices; failure to achieve desired results in labour negotiations; failure to attract and retain key employees or effectively manage succession planning; damage to the reputation of brands promoted by the company; new, or changes to current, gaming laws in various jurisdictions; changes in the company’s regulatory liabilities including changes in tax laws, regulations or future assessments; new, or changes to existing, accounting pronouncements; the risk of violations of law, breaches of the company’s policies or unethical behaviour; the risk of material adverse effects arising as a result of litigation; and events or series of events may cause business interruptions.

Readers are cautioned that the foregoing list of factors is not exhaustive. Other risks and uncertainties not presently known to Amaya or that Amaya presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional information on these and other factors that could affect the operations or financial results of Amaya are included in reports filed by Amaya with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

EX-99.44

Exhibit 99.44

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Gaming Group Inc. (“Amaya” or the “Corporation”)

7600 TransCanada Highway

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

July 7, 2014

3.	News Release

A news release reporting the material change was disseminated by the Corporation on July 7, 2014 through CNW and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On July 7, 2014, Amaya announced that it completed an offering, on an underwritten bought-deal private-placement basis, of 25 million subscription receipts priced at $20 per subscription receipt (the “Subscription Receipts”), and that the underwriters of the offering exercised in full the option granted to them to purchase an additional seven million Subscription Receipts (the “Subscription Receipt Offering”). Total gross proceeds to Amaya from the Subscription Receipt Offering are $640 million.

The proceeds of the Subscription Receipt Offering, less 50% of the commission payable to the Underwriters and Underwriters’ expenses, will be held in escrow and will be released, and the Subscription Receipts automatically converted, without additional payment, into common shares of the Corporation issued from treasury on a one-to-one basis upon completion of the previously announced transaction whereby Amaya has agreed to acquire the Rational Group, owner and operator of the PokerStars and Full Tilt Poker brands, for an aggregate purchase price of US$4.9 billion (the “Purchase Price”). The proceeds of the Subscription Receipt Offering will be used to partially fund the payment of the Purchase Price.

5.	Full Description of Material Change

Reference is made to the press release attached as Schedule “A” hereto.

6.	Reliance upon subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information, please contact:

Amaya Gaming Group Inc.

Mr. David Baazov

President and Chief Executive Officer

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

July 10, 2014.

- 2 -

SCHEDULE “A”

PRESS RELEASE

(attached)

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

AMAYA ANNOUNCES CLOSING OF SUBSCRIPTION RECEIPT OFFERING INCLUDING EXERCISE OF UNDERWRITERS’ OPTION FOR GROSS PROCEEDS OF $640 MILLION

MONTREAL, CANADA – July 7, 2014 – Amaya Gaming Group Inc. (TSX: AYA) (“Amaya” or the “Corporation”) announced today the completion of its previously announced offering, on an underwritten bought-deal private-placement basis, of 25 million subscription receipts priced at $20 per subscription receipt (the “Subscription Receipts”), and that the underwriters of the offering have exercised in full the option granted to them to purchase an additional seven million Subscription Receipts (the “Subscription Receipt Offering”). Total gross proceeds to Amaya from the Subscription Receipt Offering are $640 million. All $ figures are Canadian dollars unless noted otherwise.

The proceeds of the Subscription Receipt Offering, less 50% of the commission payable to the Underwriters (as defined below) and Underwriters’ expenses, will be held in escrow and will be released, and the Subscription Receipts automatically converted, without additional payment, into common shares of the Corporation issued from treasury on a one-to-one basis upon completion of the previously announced transaction (the “Transaction”) whereby Amaya has agreed to acquire the Rational Group, owner and operator of the PokerStars and Full Tilt Poker brands, for an aggregate purchase price of US$4.9 billion (the “Purchase Price”). The proceeds of the Subscription Receipt Offering will be used to partially fund the payment of the Purchase Price.

The Subscription Receipt Offering was underwritten by a syndicate led by Canaccord Genuity Corp., Cormark Securities Inc. and Desjardins Capital Markets (collectively, the “Lead Underwriters”), and including Clarus Securities Inc. (together with the Lead Underwriters, the “Underwriters”). Osler, Hoskin & Harcourt LLP acted as legal counsel to Amaya and McCarthy Tétrault LLP acted as legal advisor to the Underwriters in connection with this offering.

The Subscription Receipt Offering was originally announced June 12, 2014. The price of the Subscription Receipts represented a premium of approximately 66.4% to the closing price of $12.02 per Amaya common share on the Toronto Stock Exchange (the “TSX”) on June 11, 2014 and a premium of approximately 108.5% over the 30-trading day volume-weighted average price of C$9.59 per Amaya common share on the TSX, up to and including June 11, 2014.

If the Transaction is not completed within six months from the closing date of the Subscription Receipt Offering, then the Subscription Receipts shall, unless Amaya and the holders of the Subscription Receipts agree to an extension, be automatically terminated and cancelled and the principal amount subscribed plus accrued interest will be returned to the holders of the Subscription Receipts in accordance with the terms of the subscription receipt agreement. The Subscription Receipts are transferable, subject to the terms of the subscription receipt agreement. The Subscription Receipts will not be listed on any exchange. However, the Corporation has agreed to use its best efforts to seek a stock exchange listing for the Subscription Receipts if the Transaction has not closed within four months from the closing of the Subscription Receipt Offering.

AMAYA INVESTOR CONTACT:

Tim Foran

Director, Investor Relations

+1.416.545.1325

ir@amayagaming.com

# # #

ABOUT AMAYA

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and electronic gaming machines and game systems. Some of the world’s largest licensed gaming operators, casinos and lotteries are powered by Amaya’s interactive, land-based, and lottery solutions, including in multiple U.S. states and Canadian provinces, more than 80 Native American tribal jurisdictions, and multiple European jurisdictions. For more information, visit www.amayagaming.com.

DISCLAIMERS

This News Release for Amaya contains forward-looking statements about the proposed acquisition by Amaya of all of the equity securities of Oldford Group, parent of the Rational Group, including forward-looking statements concerning the expected completion date of the proposed Transaction. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “project”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may” and “should” and similar expressions. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Amaya’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Amaya’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change.

There can be no assurance that the proposed Transaction will occur. The proposed Transaction is subject to various regulatory approvals, including approvals by the TSX, and the fulfilment of certain conditions, and there can be no assurance that any such approvals will be obtained and/or any such conditions will be met. The proposed combination could be modified, restructured or terminated.

Amaya Gaming Group Inc. 3

EX-99.45

Exhibit 99.45

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Gaming Group Inc. (“Amaya” or the “Corporation”)

7600 TransCanada Highway

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

August 1, 2014

3.	News Release

A news release reporting the material change was disseminated by the Corporation on August 1, 2014 through CNW and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On August 1, 2014, Amaya announced the completion of its previously announced acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the parent company of Isle of Man headquartered Rational Group Ltd. (“Rational Group”), the owner and operator of the PokerStars and Full Tilt Poker brands, in an all-cash transaction for an aggregate purchase price of $4.9 billion (the “Purchase Price”), including certain deferred payments and subject to customary purchase price adjustments (the “Acquisition”). All $ figures are in US dollars unless noted otherwise.

•

$1.05 billion of convertible preferred shares, $600 million of which were subscribed by funds or accounts managed or advised by GSO Capital Partners LP or its affiliates.

•

C$640 million of subscription receipts at C$20 per subscription receipt which were automatically converted on a one-to-one basis into common shares upon closing of the Acquisition.

•

Certain funds or accounts managed or advised by GSO Capital Partners LP or its affiliates purchased $55 million of common shares at C$20 per share.

•

Senior Secured Credit Facilities in the aggregate principal equivalent amount in US Dollars of approximately $2.92 billion, and consisting of the following:

•

a $1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor;

•

a $100 million five-year first lien revolving credit facility priced at Libor plus 4.00%, none of which was drawn at completion; and

•

an $800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor.

•

Approximately $213 million from cash on hand, which includes the $50 million deposit made on June 12, 2014.

5.	Full Description of Material Change

Reference is made to the press release attached as Schedule “A” hereto.

6.	Reliance upon subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information, please contact:

Amaya Gaming Group Inc.

Mr. David Baazov

President and Chief Executive Officer

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

August 11, 2014.

- 2 -

SCHEDULE “A”

PRESS RELEASE

(attached)

Amaya Completes Acquisition of Pokerstars and Full Tilt Poker

Acquisition Creates World’s Largest Publicly-Traded Online Gaming Company

MONTREAL, Aug. 1, 2014 /CNW/ - Amaya Gaming Group Inc. (TSX: AYA) (“Amaya” or the “Corporation”) announced today the completion of its previously announced acquisition of 100% of the issued and outstanding shares of privately held Oldford Group Limited (“Oldford Group”), the parent company of Isle of Man headquartered Rational Group Ltd. (“Rational Group”), the owner and operator of the PokerStars and Full Tilt Poker brands, in an all-cash transaction for an aggregate purchase price of $4.9 billion (the “Purchase Price”), including certain deferred payments and subject to customary purchase price adjustments (the “Acquisition”). All $ figures are in US dollars unless noted otherwise.

“We are extremely pleased to have completed this Acquisition,” said David Baazov, Chairman and CEO of Amaya. “Through PokerStars, Full Tilt and its multiple live poker tours and events, Rational’s brands comprise the world’s largest poker business, generating diversified and recurring revenues across the globe from its extremely loyal customer base.

Rational’s success is attributable to the company’s core values of integrity, customer focus, and challenge. These values are ingrained in the DNA of the company’s staff located across the globe, led by Rational’s deep, experienced executive and leadership teams. We intend for Rational to maintain this culture and will support its initiatives to continue growing this world class business.”

Rational Group Founder and CEO Mark Scheinberg said: “Since launching PokerStars in 2001 we have grown the business each year thanks to constant innovation, unparalleled customer service, and the talent of our dedicated workforce. While myself and other founders are departing, we are happy to see the business and the brands we have developed, along with the teams behind them, transferred to strong new ownership. I’m confident that Amaya, together with Rational Group’s leadership, will continue to successfully grow the business into the future.”

FINANCING DETAILS

•

C$640 million of subscription receipts at C$20 per subscription receipt which were automatically converted on a one-to-one basis into common shares upon closing of the Acquisition.

•

Certain funds or accounts managed or advised by GSO Capital Partners LP or its affiliates purchased $55 million of common shares at C$20 per share.

•

Senior Secured Credit Facilities in the aggregate principal equivalent amount in US Dollars of approximately $2.92 billion, and consisting of the following:

•

a $1.75 billion seven-year first lien term loan priced at Libor plus 4.00%, and a €200 million seven-year first lien term loan priced at Euribor plus 4.25%, in each case with a 1.00% floor;

•

a $100 million five-year first lien revolving credit facility priced at Libor plus 4.00%, none of which was drawn at completion; and

•

an $800 million eight-year second lien term loan priced at Libor plus 7.00%, with a 1.00% floor.

•

Approximately $213 million from cash on hand, which includes the $50 million deposit made on June 12, 2014.

ADVISORS

Deutsche Bank Securities Inc. and Canaccord Genuity Corp. acted as lead financial advisors to Amaya in connection with the Acquisition. Macquarie Capital and Barclays acted as co-advisors. Houlihan Lokey acted as financial advisor to Oldford Group. Amaya was represented by Osler, Hoskin & Harcourt LLP in connection with corporate and securities matters, including the offering of convertible preferred shares, subscription receipts and common shares. Greenberg Traurig, LLP acted as lead counsel to Amaya in connection with the Acquisition, the senior secured credit facilities and U.K., The Netherlands and U.S. matters, with Fox Rothschild, LLP being retained as special gaming counsel by the Corporation. Cains served as Isle of Man counsel to Amaya in connection with the Acquisition. McCarthy Tétrault LLP acted as legal advisor to the underwriters with respect to the Subscription Receipt offering and Canadian legal advisor to GSO, with White & Case LLP acting as U.S. and U.K. legal advisor to GSO. The syndicate of lenders under the term loan facilities was represented by Cahill Gordon & Reindel LLP. Stikeman Elliott LLP acted as lead advisor to Canaccord Genuity with respect to the previously announced Convertible Preferred Share offering. The securityholders of Oldford Group were represented by Herzog Fox & Neeman and Appleby.

ABOUT AMAYA

Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and electronic gaming machines and game systems. Amaya has an expansive footprint in regulated markets through the provision of its interactive, land-based and lottery solutions to licensed commercial, tribal and charitable gaming operations as well as government lotteries and gaming control agencies, in multiple U.S. states, Canadian provinces, Native American tribal jurisdictions, and European jurisdictions. The company supplies online casino games to multiple Atlantic City casinos permitted to provide real money online gaming in New Jersey, the most recent and thus far largest U.S. state to regulate iGaming.

Amaya Gaming Group Inc. 3

ABOUT THE RATIONAL GROUP

DISCLAIMERS

This News Release contains forward-looking statements, related to the acquisition by Amaya of all of the equity securities of Oldford Group, concerning the combined company’s cash flow and growth prospects and certain strategic benefits of the combined company. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “project”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may” and “should” and similar expressions. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Amaya’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Amaya’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Amaya can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Numerous risks and uncertainties could cause the combined company’s actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: failure to realize anticipated results, including revenue growth from the combined company’s major initiatives; heightened competition, whether from current competitors or new entrants to the marketplace, changes in economic conditions including the rate of inflation or deflation, changes in interest and currency exchange rates and derivative and commodity prices; failure to achieve desired results in labour negotiations; failure to attract and retain key employees or effectively manage succession planning; damage to the reputation of brands promoted by the combined company; new, or changes to current, gaming laws in various jurisdictions; changes in the combined company’s regulatory liabilities including changes in tax laws, regulations or future assessments; new, or changes to existing, accounting pronouncements; the risk of violations of law, breaches of the combined company’s policies or unethical behaviour; the risk of material adverse effects arising as a result of litigation; and events or series of events may cause business interruptions.

Readers are cautioned that the foregoing list of factors is not exhaustive. Other risks and uncertainties not presently known to Amaya or that Amaya presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional information on these and other factors that could affect the operations or financial results of Amaya or the combined company are included in reports filed by Amaya with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

SOURCE Amaya Gaming Group Inc.

%SEDAR: 00029939EF

For further information:

AMAYA INVESTOR CONTACT:

Tim Foran

Director, Investor Relations

+1.416.545.1325

ir@amayagaming.com

AMAYA MEDIA CONTACT:

Maggie McKeon

Kauffmann Public Affairs

maggie@kauffmannllc.com

Amaya Gaming Group Inc. 4

RATIONAL GROUP MEDIA CONTACT

Eric Hollreiser

Head of Corporate Communications

The Rational Group

erich@pokerstars.com

CO: Amaya Gaming Group Inc.

CNW 10:47e 01-AUG-14

EX-99.46

Exhibit 99.46

MATERIAL CHANGE REPORT

FORM 51-102F3

1.	Name and Address of Company

Amaya Inc. (“Amaya”)

7600 TransCanada Hwy

Pointe-Claire, QC

H9R 1C8

2.	Date of Material Change

March 30, 2015.

3.	News Release

A news release reporting the material change was issued on March 30, 2015 in Canada through CNW Group and is attached hereto as Schedule “A”.

4.	Summary of Material Change

On March 30, 2015, Amaya announced that it entered into a definitive agreement (the “Agreement”) to sell 100% of the issued and outstanding shares of Amaya Americas Corporation (“Amaya Americas”), the indirect parent company of Cadillac Jack, Inc., to AGS, LLC (“AGS”), an affiliate of funds managed by Apollo Global Management, LLC (the “Transaction”).

Pursuant to the Agreement, AGS will purchase all of the shares of Amaya Americas for an aggregate purchase price of approximately $476 million, comprising cash consideration of $461 million, subject to adjustment, and a $15 million payment-in-kind note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date of the Transaction. The Transaction is anticipated to close in 2015, subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions.

All dollar ($) figures are in Canadian dollars unless noted otherwise, and are based on a U.S. dollar to Canadian dollar exchange rate of 1.2471 as of March 26, 2015.

5.	Full Description of Material Change

Reference is made to the press release attached as Schedule “A” hereto.

6.	Reliance on Subsection 7.1(2) of National Instrument 51-102

Not applicable.

7.	Omitted Information

None.

8.	Executive Officer

For further information please contact:

Amaya Inc.

Mr. Marlon Goldstein

Executive Vice President, Corporate Development & General Counsel

North America: 1-866-744-3122

Worldwide: 1-514-744-3122

9.	Date of Report

April 1, 2015.

Schedule “A”

(attached)

Amaya announces sale of Cadillac Jack to AGS for C$476 million

MONTREAL, March 30, 2015 /CNW/ - Amaya Inc. (“Amaya” or the “Corporation”) (TSX: AYA) announced today that it entered into a definitive agreement (the “Agreement”) to sell (the “Transaction”) 100% of the issued and outstanding shares of Amaya Americas Corporation (“Amaya Americas”), the indirect parent company of Cadillac Jack, Inc. (“Cadillac Jack”) to AGS, LLC, (“AGS” or the “Purchaser”), an affiliate of funds managed by Apollo Global Management, LLC (together with its consolidated subsidiaries, “Apollo”) (NYSE: APO). All dollar ($) figures are in Canadian dollars unless noted otherwise.

Pursuant to the Agreement, AGS will purchase all of the shares of Amaya Americas for an aggregate purchase price of approximately $476 million¹, comprising cash consideration of $461 million, subject to adjustment, and a $15 million Payment-in-kind Note, bearing interest at 5.0% per annum and due on the eighth anniversary of the closing date.

“Cadillac Jack has grown its business significantly in new geographies and new markets under Amaya, and we are very proud of the efforts of its management and its employees,” said Amaya CEO David Baazov. “We are confident that combining Cadillac Jack with AGS presents a strong opportunity to expedite the company’s growth strategy, while at the same time crystallizing on the strong value created in the business to benefit Amaya’s shareholders.”

The Transaction is anticipated to close in 2015, subject to receipt of gaming regulatory and antitrust approvals and other customary closing conditions.

Net proceeds from the Transaction will be used primarily for deleveraging, including the repayment of Cadillac Jack’s existing senior secured term loan and mezzanine debt. The Transaction is a result of Amaya’s previously announced strategic review to explore alternatives for Cadillac Jack with the fundamental objective of expediting Cadillac Jack’s growth strategy and maximizing value for Amaya’s shareholders.

Macquarie Capital and Deutsche Bank Securities Inc. are acting as Amaya’s co-financial advisors in connection with the Transaction, and Greenberg Traurig, P.A. is serving as legal advisor to Amaya in connection with the Transaction.

ABOUT CADILLAC JACK

Cadillac Jack is a leading designer and supplier of electronic games and systems for the regulated global gaming industry with more than 13,000 units installed in hundreds of casinos across the United States and Mexico, the majority on a recurring revenue basis. The company is a leader in the Class II Native American and Mexican gaming markets and has recently established a growing business in Class III machines for the Native American, commercial and charity markets. Cadillac Jack has recently begun to develop online versions of some of its popular land-based game titles. Cadillac Jack’s product portfolio includes an expansive games library of more than 165 game titles available on multiple cabinets, progressive product lines, and slot management services and systems.

¹	Based on USD to CAD exchange rate of 1.2471 as of March 26, 2015. Purchase price is USD$370 million plus USD$12 million PIK Note.

ABOUT AGS

AGS is a full-service designer and manufacturer of gaming products for the casino floor. The Company’s roots are in the Class II, Native American market, and it has recently expanded its product lines to include top performing slot games for the Class III commercial marketplace as well as live felt table games. Connect with the Company on its corporate website, Facebook, Twitter and LinkedIn.

ABOUT APOLLO GLOBAL MANAGEMENT

Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Bethesda, Toronto, London, Frankfurt, Luxembourg, Madrid, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $160 billion as of December 31, 2014 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.

ABOUT AMAYA

Amaya owns gaming and related consumer businesses and brands including PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. These brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in major global casinos, and poker programming created for television and online audiences. Amaya also provides B2B interactive and physical gaming solutions to the regulated gaming industry.

Forward-Looking Statements

Certain statements included herein, including those that express management’s expectations including regarding completion of the transactions, constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic, regulatory and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward-looking statements. Except as required by law, Amaya does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

SOURCE Amaya Inc.

%SEDAR: 00029939E

For further information: For investors: Tim Foran, ir@amaya.com, +1.416.545.1325; For media: Eric Hollreiser, press@amaya.com

CO: Amaya Inc.

CNW 08:30e 30-MAR-15

EX-99.47

Exhibit 99.47

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

Dated June 10, 2013

by and among

Amaya Americas Corporation,

Diamond Game Enterprises,

James Breslo

and

Roy Johnson

TABLE OF CONTENTS


1.	PURCHASE AND SALE OF SHARES		1

	1.1	Purchase and Sale of Shares	1
	1.2	Purchase Price	1
	1.3	Estimate of Purchase Price	1
	1.4	Payment of Closing Date Purchase Price	2
	1.5	Post-Closing Purchase Price Adjustment	2
	1.6	Closing	4

2.	REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY		6

	2.1	Organization; Predecessors	6
	2.2	Capitalization of the Company; Title to Shares	7
	2.3	Organization, Power and Authorization	8
	2.4	Authorization of Governmental Authorities	8
	2.5	Noncontravention	8
	2.6	Financial Statements	9
	2.7	Debt; Guarantees	9
	2.8	Absence of Undisclosed Liabilities	9
	2.9	Absence of Certain Developments	10
	2.10	Assets	11
	2.11	Accounts Receivable	12
	2.12	Real Property	12
	2.13	Tangible Personal Property	13
	2.14	Intellectual Property	13
	2.15	Legal Compliance; Illegal Payments; Permits	16
	2.16	Inventories	18
	2.17	Employee Benefit Plans	18
	2.18	Environmental Matters	20
	2.19	Contracts	21
	2.20	Affiliate Transactions	23
	2.21	Customers and Suppliers	23
	2.22	Customer Warranties	23
	2.23	Employees	24
	2.24	Litigation; Governmental Orders	24
	2.25	Insurance	25
	2.26	Banking Facilities	25
	2.27	Powers of Attorney	25
	2.28	No Brokers	25
	2.29	Disclosure	25

3.	REPRESENTATIONS AND WARRANTIES OF BUYER		25

	3.1	Organization	25
	3.2	Power and Authorization	26
	3.3	Authorization of Governmental Authorities	26
	3.4	Noncontravention	26
	3.5	No Brokers	26
	3.6	Investment Intention	26
	3.7	No Reliance	26

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4.	PRE-CLOSING COVENANTS		26

	4.1	Access and Investigation	26
	4.2	Confidentiality	27
	4.3	Operation of the Company and the Business	27
	4.4	Commercially Reasonable Efforts; Notification	30
	4.5	Acquisition Proposals	30
	4.6	Bank Accounts; Powers of Attorney	31
	4.7	Notice and Cure	31
	4.8	Consultation	31
	4.9	Interim Financial Statements	31
	4.10	Termination of Phantom Stock Plan	32
	4.11	Termination of Breslo Incentive Plan; Payment of Liability Thereunder	32
	4.12	Termination of Breslo Employment Agreement	32
	4.13	Withdrawal of Licensing	32
	4.14	Distribution of Phone Card Business Assets and Liabilities; Payment of Equalizing Dividend	33
	4.15	Canadian Acquisition	33

5.	POST-CLOSING COVENANTS		33

	5.1	Confidentiality	33
	5.2	Restrictive Covenants	34

6.	CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE		36

	6.1	Accuracy of Representations and Warranties	36
	6.2	Sellers’ and the Company’s Performance	37
	6.3	No Actions	37
	6.4	No Claim Regarding Shares or Sale Proceeds	37
	6.5	No Prohibition	37
	6.6	No Material Adverse Effect	37
	6.7	Third-Party Consents	37
	6.8	Withdrawals	37
	6.9	Gaming Approvals	37
	6.10	Key Gaming Approvals	37
	6.11	Payment of Dividends	37

7.	CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE		38

	7.1	Accuracy of Representations and Warranties	38
	7.2	Buyer’s Performance	38
	7.3	No Prohibition	38
	7.4	No Actions	38

8.	TERMINATION		38

	8.1	Termination Events	38
	8.2	Effect of Termination	40

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9.	INDEMNIFICATION		40

	9.1	Indemnification by Sellers	40
	9.2	Indemnity by Buyer	40
	9.3	Time for Certain Claims	41
	9.4	Third Party Claims	41
	9.5	Sellers’ Representative	42
	9.6	Knowledge and Investigation	43
	9.7	Company’s Indemnification Obligations	43
	9.8	Time of Payment of Claims	43
	9.9	Insurance Reimbursement	43
	9.10	No Multiple Recovery	43
	9.11	Purchase Price Adjustment	43
	9.12	Exclusive Remedy	43
	9.13	Debt Reduction as Exclusive Remedy	44
	9.14	Efforts to Join Sellers	44

10. TAX MATTERS			44

	10.1	Representations and Obligations Regarding Taxes	44
	10.2	Covenants With Respect To Taxes	46
	10.3	Indemnification for Taxes	47

11. MISCELLANEOUS			49

	11.1	Notices	49
	11.2	Sellers’ Representative	51
	11.3	Publicity	52
	11.4	Succession and Assignment; No Third-Party Beneficiary	52
	11.5	Amendments and Waivers	52
	11.6	Further Assurances	52
	11.7	Entire Agreement	53
	11.8	Schedules; Listed Documents, etc	53
	11.9	Counterparts; Execution	53
	11.10	Survival	53
	11.11	Severability	53
	11.12	Headings	53
	11.13	Construction	53
	11.14	Governing Law	53
	11.15	Jurisdiction; Venue; Service of Process	54
	11.16	Waiver of Jury Trial	54
	11.17	Expenses	55
	11.18	Specific Performance	55

12. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION			55

	12.1	Definitions	55
	12.2	Glossary of Other Defined Terms	64
	12.3	Rules of Construction	66

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Exhibits:

Exhibit A		Illustrative Working Capital Calculation
Exhibit B		Form of General Release
Exhibit C		Form of Spousal Consent

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SCHEDULES


1.2		Allocation of the Purchase Price among Sellers
1.6.2(a)(vi)		Debt to be paid at Closing
2.1.1(a)		Jurisdictions in which Company is qualified to transact business
2.1.1(b)		Subsidiaries
2.1.2		Predecessor Status, etc.
2.2.2		Ownership of Shares
2.2.3		Encumbrances, Etc.
2.4		Required Governmental Consents and Filings
2.5		Noncontravention
2.6.1(a)		Financial Statements
2.6.1(b)		Transactions since Most Recent Balance Sheet Date
2.7		Debt
2.9		Certain Developments
2.10.1		Ownership of Assets
2.10.3		Phone Card Assets and Liabilities
2.11		Accounts Receivable
2.12		Real Property
2.14.1(a)-(d)		Intellectual Property
2.14.2(a)-(c)		Intellectual Property Relating to Company Technology
2.14.3		Infringement and Restrictions on Intellectual Property
2.14.4		Company Software
2.14.5		Use and Title to Intellectual Property
2.14.6		Licenses
2.14.7		IP Protection
2.14.12		Standards Bodies and Organizations
2.15.3(a)		Permits
2.15.3(b)		Gaming Approvals
2.17(a)		Employee Benefit Plans
2.17(f)		Severance Pay and Other Expenses Under Employee Benefit Plans
2.18		Environmental Matters
2.19		Contracts
2.19.2		Enforceability, etc.
2.19.3		Breach
2.20		Affiliate Transactions
2.21		Customers and Suppliers
2.22		Customer Warranty Claims
2.23		Employees
2.24.1		Litigation
2.24.2		Governmental Orders
2.25		Insurance
2.26		Banking Facilities
2.27		Powers of Attorney
10		Taxes

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STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement, dated June 10, 2013, as amended or otherwise modified (this “Agreement”), by and among Amaya Americas Corporation, a Delaware corporation (“Buyer”), Diamond Game Enterprises, a California corporation (the “Company”), James Breslo, an individual resident in the State of California (“Breslo”), Roy Johnson, an individual resident in the State of Washington (“Johnson” and, together with Breslo, “Sellers” and each individually, a “Seller”), and Johnson as Sellers’ representative (“Sellers’ Representative”).

RECITALS

WHEREAS, Sellers are the record and beneficial owners of 100% of the issued and outstanding shares of common stock, no par value per share, of the Company (the “Shares”);

WHEREAS, Buyer desires to purchase the Shares from Sellers, and Sellers desire to sell all of the Shares to Buyer upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, concurrently with the execution and delivery of this Agreement, Amaya Gaming Group, Inc. (“Amaya”) and the Company have entered into that certain Credit Agreement, dated as of the date hereof, by and between the Company, as borrower, and Amaya, as lender (the “Equipment Placement Draw Down Facility”), pursuant to which Amaya has agreed to loan to the Company, on the terms and subject to the conditions contained therein, an aggregate amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000) for Qualified Machine Expenditures.

AGREEMENT

NOW THEREFORE, in consideration of the premises and mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, Buyer, Sellers and Sellers’ Representative hereby agree as follows:

1.	PURCHASE AND SALE OF SHARES.

1.1 Purchase and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, Sellers will sell, transfer and deliver to Buyer, and Buyer will purchase from Sellers, the Shares free and clear of any and all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws and Encumbrances created by Buyer.

1.2 Purchase Price. The aggregate purchase price for the Shares (the “Purchase Price”) shall be paid to Sellers as set forth on Schedule 1.2 and is equal to the Closing Date Purchase Price, as adjusted as provided in this Section 1.

1.3 Estimate of Purchase Price. At least ten (10) Business Days prior to the Closing Date, Sellers shall prepare in accordance with GAAP and deliver to Buyer Sellers’ good faith reasonable estimate of the Company’s consolidated balance sheet as of the Closing Date (the “Estimated Closing Balance Sheet”) and a statement (the “Closing Statement”), setting forth each of the following:

1.3.1 all Debt (the “Estimated Indebtedness”), as set forth on the Estimated Closing Balance Sheet;

1.3.2 Net Working Capital (the “Estimated Net Working Capital”), calculated as set forth on Exhibit A, which contains a sample calculation of Working Capital for illustrative purposes (the “Working Capital Calculation”); and

1.3.3 the Qualified Machine Indebtedness.

Following receipt of the Closing Statement, Sellers shall permit Buyer and its Representatives at all reasonable times and upon reasonable notice to review Sellers’ and the Company’s working papers relating to the Estimated Closing Balance Sheet and Closing Statement as well as Sellers’ and the Company’s accounting books and records relating thereto, and Sellers shall make reasonably available their Representatives responsible for the preparation of the Estimated Closing Balance Sheet and the Closing Statement in order to respond to the inquiries of Buyer. Prior to the Closing, the parties shall act reasonably in resolving in good faith any disagreements concerning the computation of any of the items on the Estimated Closing Balance Sheet and Closing Statement; provided that it is acknowledged and agreed that if any disagreements cannot be resolved, then the Closing shall occur on the basis of the Closing Statement provided by Sellers with such changes as requested by Buyer in good faith and/or mutually agreed to by the parties, and that any unresolved disagreements shall be deferred for resolution pursuant to the post-closing purchase price adjustment process described in Section 1.5.

1.4 Payment of Closing Date Purchase Price. At Closing, Buyer shall:

1.4.1 pay to Sellers as set forth on Schedule 1.2 an amount (the “Closing Date Purchase Price”) equal to the following:

(a) Twenty-Five Million Dollars ($25,000,000); minus

(b) the Estimated Indebtedness; minus

(c) if the Estimated Net Working Capital is less than Zero Dollars ($0), the difference between Zero Dollars ($0) and the Estimated Net Working Capital; plus

(d) if the Estimated Net Working Capital is more than Zero Dollars ($0), the difference between the Estimated Net Working Capital and Zero Dollars ($0).

1.4.2 Method of Cash Payments. All cash payments made under this Section 1.4 shall be made by wire transfer of immediately available funds to an account designated by the recipient in writing no fewer than two (2) Business Days immediately preceding the scheduled Closing Date.

1.5 Post-Closing Purchase Price Adjustment.

1.5.1 As soon as practicable but in no event more than one hundred twenty (120) days following the Closing Date, Buyer shall prepare, or cause to be prepared, and deliver to Sellers’ Representative: (a) a consolidated balance sheet of the Company as of the Closing Date prepared in accordance with GAAP (the “Closing Balance Sheet”); and (b) a statement (the “Final Closing Statement”), setting forth each of the following as set forth on the Closing Balance Sheet: (i) the actual aggregate amount of the Company’s Debt (the “Actual Indebtedness”); and (ii) and the actual Net Working Capital (“Actual Net Working Capital”), which shall be calculated in a manner consistent with the Working Capital Calculation.

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1.5.2 Sellers and their accountants shall complete their review of the Closing Balance Sheet and Final Closing Statement within forty-five (45) days after Buyer’s delivery thereof to Sellers’ Representative. During such review period, Buyer shall provide Sellers’ Representative with access to all books and records reasonably requested by Sellers’ Representative to review the Closing Balance Sheet and the Final Closing Statement and any work papers prepared by Buyer or its accountants in connection with such calculations, and Buyer shall make reasonably available its Representatives responsible for the preparation of the Closing Balance Sheet and Final Closing Statement in order to respond to the inquiries of Sellers’ Representative. If Sellers object to the Closing Balance Sheet or Final Closing Statement for any reason, Sellers’ Representative shall, on or before the last day of such 45-day period, so inform Buyer in writing (a “Sellers’ Objection”), setting forth a specific description of the basis of Sellers’ determination and the adjustments to the Closing Balance Sheet or Final Closing Statement that Sellers believe should be made. To the extent any disagreement therewith is not described in a Sellers’ Objection received by Buyer on or before the last day of such 45-day period, then all non-disputed items described on the Closing Balance Sheet and Final Closing Statement delivered by Buyer to Sellers’ Representative shall be deemed agreed, final and binding on the parties.

1.5.3 If Sellers’ Representative timely delivers a Sellers’ Objection to Buyer and Sellers’ Representative and Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in Sellers’ Objection within thirty (30) days following Buyer’s receipt of Sellers’ Objection, then they shall jointly retain the CPA Firm, which, acting as an expert and not as an arbitrator, shall determine, on the basis set forth in and in accordance with this Section 1.5, and only with respect to those items specifically described in Sellers’ Objection on which Buyer and Sellers’ Representative have not agreed, whether and to what extent, if any, the Closing Date Purchase Price requires adjustment. Buyer and Sellers’ Representative shall instruct the CPA Firm to deliver its written determination to Buyer and Sellers’ Representative no later than thirty (30) days after submitting the matter to it for resolution. At the time of retention of the CPA Firm, Buyer shall specify in writing to the CPA Firm and Sellers’ Representative the amount of Buyer’s computation of the Closing Date Purchase Price (the “Buyer’s Position”), and Sellers’ Representative shall specify in writing to the CPA Firm and to Buyer the amount of Sellers’ computation of the Closing Date Purchase Price (the “Sellers’ Position”). The CPA Firm’s determination shall be conclusive and binding upon Buyer and Sellers. In resolving any disputed item, the CPA Firm may not assign a value to any disputed item that is greater than the greatest value claimed by Buyer or Sellers’ Representative at the time the CPA Firm is retained or less than the smallest value claimed for any disputed item by Buyer or Sellers’ Representative at such time. The scope of the disputes to be resolved by the CPA Firm is limited to whether the preparation of the Closing Balance Sheet and the calculation of Actual Indebtedness and Actual Net Working Capital were done in a manner consistent with GAAP and otherwise in accordance with this Agreement, and the CPA Firm is not to make any other determination unless jointly requested in writing by Sellers’ Representative and Buyer. The fees and disbursements of the CPA Firm and the reasonable attorneys’ fees and expenses of the parties relating to the disputes submitted to the CPA Firm (collectively, the “Purchase Price Dispute Expenses”) shall be borne (i) jointly and severally by Sellers in that proportion equal to a fraction (expressed as a percentage) the numerator of which is equal to Sellers’ Position minus the Closing Date Purchase Price determined by the CPA Firm, and the denominator of which is equal to Sellers’ Position minus Buyer’s Position and (ii) by Buyer in that proportion equal to a fraction (expressed as a percentage) equal to one (1) minus the fraction described in clause (i). For example, if Sellers’ Position is that the Closing Date Purchase Price should be $25,000,000 and Buyer’s Position is that the Closing Date Purchase Price should be $24,000,000, the CPA Firm determines that the Closing Date Purchase Price should be $24,600,000 and the Purchase Price Dispute Expenses are $10,000, then (i) Sellers shall pay $4,000 (40%) of the Purchase Price Dispute Expenses and (ii) Buyer shall pay $6,000 (60%) of the Purchase Price Dispute Expenses. Buyer and Sellers shall cooperate with the CPA Firm during its resolution of the disagreement and make readily available to the CPA Firm all relevant books and records and any work papers (including those of the parties’ respective accountants, to the extent permitted by such accountants) relating to the Closing Balance Sheet, Final Closing Statement and Sellers’ Objection and all other items reasonably requested by the CPA Firm in connection therewith.

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1.5.4 The Closing Balance Sheet, Debt and Net Working Capital, as agreed to (or deemed to have been agreed to) between Buyer and Sellers’ Representative or as determined by the CPA Firm, as applicable, shall be conclusive and binding on all of the parties hereto and shall be deemed the “Actual Closing Balance Sheet”, “Actual Indebtedness” and “Actual Net Working Capital” respectively, for all purposes herein.

1.5.5 Upon completion of the calculation of the Actual Closing Balance Sheet, Actual Indebtedness and Actual Net Working Capital in accordance with this Section 1.5, the Closing Date Purchase Price shall be recalculated, and the following adjustments (the “Purchase Price Adjustment”) made:

(i) If the Closing Date Purchase Price calculated using the Actual Indebtedness and Actual Net Working Capital shown on the Actual Closing Balance Sheet is greater than the Closing Date Purchase Price calculated using the Estimated Indebtedness and Estimated Net Working Capital shown on the Estimated Closing Balance Sheet, then Buyer shall pay such difference to Sellers as set forth on Schedule 1.2 by wire transfer of immediately available funds to the accounts designated by Sellers’ Representative.

(ii) If the Closing Date Purchase Price calculated using the Actual Indebtedness and Actual Net Working Capital shown on the Actual Closing Balance Sheet is less than the Closing Date Purchase Price calculated using the Estimated Indebtedness and Estimated Net Working Capital shown on the Estimated Closing Balance Sheet, then within two (2) Business Days thereafter the amount of such difference will be paid to Buyer, jointly and severally by Sellers.

1.6 Closing.

1.6.1 Closing Date. Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the “Closing” and the date on which the Closing actually occurs, the “Closing Date”) to be held at the offices of Greenberg Traurig, P.A., located at 333 Avenue of the Americas (333 S.E. 2^nd Avenue), Miami, Florida 33131 at 10:00 a.m. Miami time, on the third (3^rd) Business Day following the date on which all of the conditions set forth in Section 6 and Section 7 shall have been satisfied or waived (other than delivery of items to be delivered at the Closing and other than satisfaction of those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such items and the satisfaction or waiver of such conditions at the Closing). Upon consummation, the Closing will be deemed for all purposes to have taken place as of 12:01 a.m. on the Closing Date. By agreement of Buyer and Sellers’ Representative, the Closing may take place by delivery of the items to be delivered at Closing by facsimile or other electronic transmission. Subject to the provisions of Section 8, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 1.6.1 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. All deliveries by the parties at Closing shall be deemed to have occurred simultaneously, and none shall be effective until and unless all have occurred in accordance with this Agreement or have been waived.

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1.6.2 Deliveries at Closing. At the Closing:

(a) Deliveries by Sellers. Sellers will deliver, or cause to be delivered, to Buyer:

(i) certificates representing the Shares, duly endorsed by each Seller (as to such Seller’s Shares) or accompanied by stock powers for unconditional and irrevocable transfer to Buyer;

(ii) a receipt for the Closing Date Purchase Price;

(iii) a certificate signed by Sellers, certifying to the fulfillment of the conditions specified in Section 6.1 and Section 6.2;

(iv) an affidavit from each Seller certifying the non-foreign status of each Seller and that no Seller is a disregarded entity, dated as of the Closing Date and in form and substance required under Section 1.1445-2(b)(2) of the Treasury Regulations;

(v) resignations of those officers and directors of the Company (solely with respect to such offices and positions as directors and not with respect to employment) as requested by Buyer at or at any time prior to Closing;

(vi) Executed payoff letters, releases, or other similar instruments providing for the repayment in full of all Debt of the Company set forth on Schedule 1.6.2(a)(vi) and the release of all Encumbrances granted with respect thereto, together with all instruments, documents and UCC financing statements relating thereto;

(vii) a compact disc (which shall be permanent and accessible, without the need for any password, with readily and commercially available software) containing, in electronic format, all documents posted to the datasite maintained by McAfee & Taft A Professional Corporation on behalf of the Company as of Closing (the “Data Room”);

(viii) a general release (a “General Release”) substantially in the form of Exhibit B executed by each Seller;

(ix) the Breslo Incentive Plan Release, executed by Bill Breslo;

(x) consents, each substantially in the form of Exhibit C, executed by Sellers’ respective spouses (each a “Spousal Consent”);

(xi) written invoices for the (i) Innovation Fee, (ii) Wadley Fee and (iii) M&T Fees and Expenses; and

(xii) if Amaya has effected the Canadian Direct Purchase Election, certificates representing the Canadian Shares, duly endorsed by the Company or accompanied by stock powers for unconditional and irrevocable transfer to the Canadian Affiliate.

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(b) Deliveries by Buyer. Buyer will deliver, or cause to be delivered, to Sellers (except as otherwise specified):

(i) the Closing Date Purchase Price less (i) the Breslo Incentive Payment, (ii) the Innovation Fee, (iii) the Wadley Fee and (iv) the M&T Fees and Expenses;

(ii) a certificate signed by Buyer, certifying to the fulfillment of the conditions specified in Section 7.1 and Section 7.2;

(iii) to Bill Breslo, the Breslo Incentive Payment;

(iv) to Innovation Capital, LLC (“Innovation”), all amounts payable to Innovation by Sellers or the Company in respect of the Contemplated Transactions (whether pursuant to that certain Financial Advisory Engagement Letter Agreement, dated as of December 13, 2012, by and between Innovation and the Company, as amended, or otherwise), which amounts are set forth on a written invoice delivered to Buyer at Closing (the “Innovation Fee”);

(v) to Mr. M. Richard Wadley (“Wadley”), all amounts payable to Wadley by Sellers or the Company in respect of the Contemplated Transactions (whether pursuant to that certain letter agreement, dated as of August 22, 2012, by and among Wadley, Johnson and Breslo or otherwise), which amounts are set forth on a written invoice delivered to Buyer at Closing (the “Wadley Fee”); and

(vi) to M&T, the M&T Fees and Expenses in accordance with written invoices for the M&T Fees and Expenses, which invoices are delivered to Buyer at Closing.

2.	REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY.

In order to induce Buyer to enter into and perform this Agreement and to consummate the Contemplated Transactions, Sellers and the Company hereby jointly and severally represent and warrant to Buyer as follows (for purposes of the representations and warranties contained in Section 2.5, Section 2.7 through and including Section 2.12, and Section 2.14 through and including Section 2.28, the term “Company” shall mean the Company, together with the Company Subsidiaries):

2.1 Organization; Predecessors.

2.1.1 Organization; Subsidiaries. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of California with full power and authority to carry on its business as it is now being conducted and to own, operate and lease its properties and assets. The Company is duly qualified or licensed as a foreign corporation to do business and is in good standing in every jurisdiction in which the conduct of its business, and the ownership or lease of its properties, require it to be so qualified or licensed, except for failures to be so qualified or licensed and in good standing that do not have, individually or in the aggregate, a Material Adverse Effect; all of such jurisdictions are listed on Schedule 2.1.1(a). Schedule 2.1.1(b) contains an accurate and complete list of the Company’s Subsidiaries (each, a “Company Subsidiary”). Each Company Subsidiary is an unlimited liability company or a limited liability company, duly formed, validly existing and in good standing under the Laws of its jurisdiction of formation, with full power and authority to carry on its business as it is now being conducted and to own, operate and lease its properties and assets. Except for the Company Subsidiaries, the Company has no Subsidiaries, holds no Investments and does not have any obligation to make any Investment in any Person. Contained in the Data Room are true,

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accurate and complete copies of (x) the Organizational Documents of the Company and each Company Subsidiary set forth, or required to be set forth, on Schedule 2.1.1(b) and (y) to the extent the same exists and are in the possession of the Company, Sellers or their respective Representatives, the minute books of the Company and each such Company Subsidiary, which contain records of all meetings held of, and other actions taken by, the respective board of directors (or other governing body), each committee thereof, and shareholders (or other equity holders) of the Company and each Company Subsidiary.

2.1.2 Predecessors. Schedule 2.1.2 sets forth a true, accurate and complete list of (a) any Person that has ever merged with or into the Company or any Company Subsidiary, (b) any Person a majority of whose capital stock (or similar outstanding ownership interests) has ever been acquired by the Company or any Company Subsidiary, (c) any Person all or substantially all of whose assets have ever been acquired by the Company or any Company Subsidiary and (d) any prior names of the Company, any Company Subsidiary or any Person described in the immediately preceding clauses (a) through (c) (each such Person, a “Predecessor”).

2.2 Capitalization of the Company; Title to Shares.

2.2.1 Shares. The Shares are the only outstanding Equity Securities of the Company. All of the Shares have been duly authorized, validly issued, and are fully paid and non-assessable. No Share is subject to, nor was any Share issued in violation of, any purchase option, call option, right of first refusal or offer, preemptive right, subscription right or any similar right. The Company has not violated the 1933 Act, any state “blue sky” or securities laws, any other similar Legal Requirement or any preemptive or other similar rights of any Person in connection with the issuance or redemption of any Shares or other Equity Securities of the Company. Except for the Shares, there are no bonds, debentures, notes, other Debt or Equity Securities of the Company with voting rights on any matters on which shareholders of the Company may vote.

2.2.2 Ownership. The Shares are held of record and beneficially owned by Sellers free and clear of all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws, as set forth on Schedule 2.2.2. Sellers have the full right, power and authority to transfer and deliver to Buyer at the Closing valid title to the Shares, free and clear of all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws and Encumbrances created by Buyer. Immediately following the Closing, Buyer will be the record and beneficial owner of the Shares, and will have good and marketable title to the Shares, free and clear of all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws and Encumbrances created by Buyer. The assignments, endorsements, stock powers and other instruments of transfer delivered by Sellers to Buyer at Closing will be sufficient to transfer Sellers’ entire interest, legal and beneficial, in the Shares to Buyer. Contained in the Data Room is, to the extent the same exists and is in the possession of the Company, Sellers or their respective Representatives, a true, accurate and complete copy of the stock ledger of the Company, which reflects all issuances, transfers, repurchases and cancellations of the Company’s Equity Securities. The Company owns all of the Canadian Shares, free and clear of all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws.

2.2.3 Encumbrances, etc. There are no outstanding Contractual Obligations to which the Company or any Company Subsidiary is a party or by which it is bound obligating the Company or any such Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold Equity Securities of the Company or any such Company Subsidiary. There are no outstanding obligations of the Company or any Company Subsidiary (contingent or otherwise) to repurchase, redeem or otherwise acquire any Shares or other Equity Securities of the Company or any Equity Securities of any Company Subsidiary. Except as set forth on Schedule 2.2.3, there are no stock-appreciation rights,

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equity-based performance units or shares, “phantom” stock rights or other Contractual Obligations (contingent or otherwise) pursuant to which any Person is or may be entitled to receive any payment or other value based on the revenues, earnings or financial performance or other attribute of the Company or any Company Subsidiary or the Business or the Assets or calculated in accordance therewith or to cause the Company or any Company Subsidiary to file a registration statement under the 1933 Act, or which otherwise relate to the registration of any securities of the Company or any Company Subsidiary. Except as set forth on Schedule 2.2.3, there are no voting trusts, proxies or other Contractual Obligations to which the Company, any Company Subsidiary or any Seller is a party or by which any of them is bound with respect to the issuance, holding, acquisition, voting or disposition of any Shares or other Equity Securities of the Company or any Equity Securities of any Company Subsidiary. There are no existing Contractual Obligations between any Seller on the one hand, and any other Person, on the other hand, regarding the Shares.

2.3 Organization, Power and Authorization. Each Seller and the Company have all requisite power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by any Seller or the Company in connection with the consummation of the Contemplated Transactions (the “Company Agreements”) and to consummate the Contemplated Transactions. The execution and delivery by the Company of this Agreement and the Company Agreements and the consummation by the Company of the Contemplated Transactions have been authorized by the board of directors of the Company, and no other authorization on the part of the Company is necessary to authorize the execution and delivery of this Agreement and the Company Agreements by the Company or the consummation by the Company of the Contemplated Transactions. This Agreement has been and each Company Agreement will be at or prior to Closing duly executed and delivered by Sellers and the Company, and this Agreement constitutes and the Company Agreements will constitute legal, valid and binding obligations of Sellers and the Company, Enforceable against Sellers and the Company in accordance with its and their terms, except as limited by the Enforceability Exceptions.

2.4 Authorization of Governmental Authorities. Except as disclosed on Schedule 2.4, no consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority or Person (including, without limitation, under any Gaming Laws or any Contractual Obligation listed on Schedule 2.19) is required for, or in connection with (a) the execution, delivery and performance by Sellers and the Company of this Agreement and the Company Agreements or (b) the consummation of the Contemplated Transactions by Sellers and the Company.

2.5 Noncontravention. Except as disclosed on Schedule 2.5, including the Gaming Approvals set forth thereon, none of the execution, delivery and performance by Sellers or the Company of this Agreement or the Company Agreements nor the consummation of the Contemplated Transactions will:

(a) violate any provision of any Legal Requirement applicable to Sellers or the Company;

(b) conflict with, result in a breach or violation of, default under, or give rise to a right for any third-party to accelerate, terminate or obtain any prepayment penalty under (in any such case, with or without notice, lapse of time or both) any Contractual Obligation of any Seller or the Company listed on Schedule 2.19;

(c) result in the creation or imposition of an Encumbrance upon, or the forfeiture of, any Asset, other than any Encumbrances created by Buyer;

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(d) result in a breach or violation of, or default under, the Company’s Organizational Documents; or

(e) require any action by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Contractual Obligation of the Company or any Seller listed on Schedule 2.19.

2.6 Financial Statements.

2.6.1 Financial Statements. Attached to Schedule 2.6.1(a) is a copy of (a) the unaudited consolidated balance sheet of the Company as of March 31, 2013 (the “Most Recent Balance Sheet,” and the “Most Recent Balance Sheet Date”) and the related unaudited consolidated statements of income and cash flows of the Company for the three months then ended (together with the Most Recent Balance Sheet, the “Interim Financials”), (b) the audited consolidated balance sheets of the Company as of December 31, 2012, 2011 and 2010 and the related audited consolidated statements of income and cash flows of the Company for the fiscal years then ended, accompanied in each case by any notes thereto and the report of the independent registered certified public accounting firm (collectively, the “Audited Financials”), and (c) the unaudited consolidated balance sheet of the Company as of December 31, 2009 and the related unaudited consolidated statements of income and cash flows of the Company for the fiscal year then ended (collectively, the “Unaudited Financials”, and together with the Interim Financials, the Audited Financials and the financial statements provided pursuant to Section 4.9, the “Financials”). Except as set forth on Schedule 2.6.1(b), since the Most Recent Balance Sheet Date, (i) the Company has not distributed, sold or otherwise disposed of any property or other Assets other than in the Ordinary Course of Business, and (ii) the Company has not made or granted any cash distributions or dividends.

2.6.2 Compliance with GAAP, etc.

(a) The Financials were prepared in accordance with the books and records of the Company and have been prepared in accordance with GAAP (subject in the case of the Interim Financials and the Unaudited Financials to the absence of footnote disclosures and normal year-end adjustments, none of which are material, individually or in the aggregate). The Financials fairly present in accordance with GAAP, in all material respects, the consolidated financial position of the Company as at the respective dates thereof and the consolidated results of the operations of the Company for the respective periods covered thereby. The Financials contain adequate reserves for the realization of all Assets and for all reasonably anticipated Liabilities in accordance with GAAP.

(b) The Company’s books and records have been maintained in accordance with sound business practices and all applicable Legal Requirements and reflect in all material respects all financial transactions of the Company that are required to be reflected in accordance with GAAP. The Company maintains books and records accurately reflecting, in all material respects, its Assets and Liabilities.

2.7 Debt; Guarantees. The Company has no Debt except as set forth on Schedule 2.7. For each item of Debt, Schedule 2.7 correctly sets forth the debtor, the principal amount of the Debt as of May 31, 2013, the creditor, the maturity date and the collateral, if any, securing the Debt. The Company has no Liability in respect of a Guarantee of any Liability of any other Person.

2.8 Absence of Undisclosed Liabilities. The Company has no Liabilities except for (a) Liabilities set forth on the face of the Most Recent Balance Sheet, (b) Liabilities incurred in the Ordinary Course of Business since the Most Recent Balance Sheet Date, (c) Liabilities not required by GAAP to be included on the Most Recent Balance Sheet (none of which are material, individually or in the aggregate), and (d) in the case of the Interim Financials, Liabilities that are the subject of normal year-end adjustments (none of which are material, individually or in the aggregate).

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2.9 Absence of Certain Developments. Except as contemplated by this Agreement or set forth on Schedule 2.9, since the Most Recent Balance Sheet Date, the Business has been conducted only in the Ordinary Course of Business and:

(a) the Company has not (i) amended its Organizational Documents or (ii) issued, sold, granted or otherwise disposed of any Equity Security;

(b) the Company has not become liable in respect of any Guarantee nor has it incurred, assumed or otherwise become liable in respect of any Debt in excess of $50,000 or made any loans, advances or capital contributions to or Investments in any Person (except for travel advances in the Ordinary Course of Business);

(c) the Company has not sold, leased, licensed, transferred or otherwise disposed of any of its Assets, except Inventory in the Ordinary Course of Business;

(d) the Company has not permitted any of its Assets to become subject to an Encumbrance other than a Permitted Encumbrance;

(e) the Company has not made or committed to make any individual capital expenditure in excess of $50,000 except in accordance with its 2013 capital expenditures budget, a true, correct and complete copy of which is contained in the Data Room;

(f) the Company has not (i) except for cash distributions to Sellers in respect of their respective Shares made any declaration, setting aside or payment of any distribution with respect to, or any repurchase, redemption or other acquisition of, any Equity Security or (ii) entered into, or performed, any transaction with, or for the benefit of, Sellers or any Affiliate of any Seller or any officer, director or employee of the Company or any Subsidiary thereof;

(g) there has been no material loss, destruction, damage or eminent domain taking (in each case, whether or not insured) affecting the Business or any material Asset;

(h) other than in the Ordinary Course of Business, the Company has not increased the Compensation payable or paid, whether conditionally or otherwise, to (i) any employee, consultant, independent contractor or agent, (ii) any officer or manager of such Company or (iii) Sellers or any Affiliate of any Seller;

(i) the Company has not entered into any Contractual Obligation providing for the employment or consultancy of any Person on a full-time, part-time, consulting or other basis other than in the Ordinary Course of Business or otherwise providing Compensation or other benefits to any Person other than in the Ordinary Course of Business;

(j) the Company has not made any change in its methods of accounting or accounting practices (including with respect to reserves) or its pricing policies, payment or credit practices or failed to pay any creditor any amount owed to such creditor when due or granted any extensions of credit, in each case, other than in the Ordinary Course of Business;

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(k) the Company has not made, changed or revoked any Tax election, elected or changed any method of accounting for Tax purposes, settled any Action in respect of Taxes or entered into any Contractual Obligation in respect of Taxes with any Governmental Authority;

(l) the Company has not terminated or closed any Facility, business or operation;

(m) no customer or supplier required to be disclosed on Schedule 2.21 has canceled, terminated or otherwise materially altered its relationship with the Company or notified the Company or any Seller in writing of any intention to do any of the foregoing or otherwise threatened in writing to cancel, terminate or materially alter its relationship with the Company;

(n) no insurer (i) has denied or disputed the coverage of any claim pending under any Liability Policy or (ii) has provided any written notice of cancellation or any other written indication that it plans to cancel any Liability Policy or materially raise the premiums or materially alter the coverage under any Liability Policy;

(o) the Company has not adopted, amended or modified any Employee Plan or increased any benefits or obligations under any Employee Plan;

(p) other than in the Ordinary Course of Business, the Company has not written off as uncollectible any Accounts Receivable, modified or cancelled any material third-party Debt or written up or written down any of its material Assets or revalued its Inventory;

(q) the Company has not failed to pay any material Liability when due;

(r) the Company has not failed to maintain or properly repair, in all material respects, any of its material Assets;

(s) the Company has not acquired or agreed to acquire by merging or consolidating with, or by purchasing all or substantially all of the assets of, or by any other manner, any business of any Person;

(t) except for demand letters in respect of delinquent Accounts Receivable, in each case for an amount not in excess of $10,000, the Company has not threatened, commenced or settled any Action;

(u) the Company has not entered into any Contractual Obligation to do any of the things referred to elsewhere in this Section 2.9; and

(v) no event or circumstance has occurred which has had a Material Adverse Effect.

2.10 Assets.

2.10.1 Ownership of Assets. Except for Permitted Encumbrances and as set forth on Schedule 2.10.1, the Company has sole and exclusive, good and marketable title to, or, in the case of property held under a lease or other Contractual Obligation, an Enforceable (except as limited by the Enforceability Exceptions) leasehold interest in, or right to use, all of its properties, rights and assets, whether real or personal and whether tangible or intangible, including all Assets reflected in the Most Recent Balance Sheet or acquired after the Most Recent Balance Sheet Date (except for such Assets

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which have been sold or otherwise disposed of since the Most Recent Balance Sheet Date in the Ordinary Course of Business) (collectively, the “Assets”). Except as disclosed on Schedule 2.10.1, none of the Assets is subject to any Encumbrance other than Permitted Encumbrances.

2.10.2 Sufficiency of Assets. The Assets comprise all of the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, necessary to conduct the Business as now conducted.

2.10.3 Phone Card Business Assets and Liabilities. Schedule 2.10.3 contains a true, correct and complete list of all of the assets and Liabilities comprising the Phone Card Business (the “Phone Card Business Assets and Liabilities”). Following Closing, the Company will have no Liabilities in respect of the Phone Card Business.

2.11 Accounts Receivable. All Accounts Receivable, unbilled invoices, costs in excess of billings, work in process and other amounts (“Receivables”) reflected on the Most Recent Balance Sheet and in the records and books of account of the Company since the Most Recent Balance Sheet Date through the Closing Date as being due to the Company have arisen in the Ordinary Course of Business, represent legal, valid, binding and enforceable obligations to the Company and to Sellers’ Knowledge are not subject to any contests, claims, counterclaims or setoffs. There has been no material adverse change since the Most Recent Balance Sheet Date in the amount or collectability of the Receivables due the Company or the related provisions or reserves from that reflected in the Most Recent Balance Sheet. Except as set forth on Schedule 2.11, as of May 31, 2013 (i) no account debtor or note debtor is delinquent for payments in excess of Ten Thousand Dollars ($10,000) or for more than ninety (90) days, (ii) to Sellers’ Knowledge, no account debtor or note debtor has refused or threatened to refuse to pay its obligations to the Company for any reason, or has otherwise made a claim to set-off or similar claim, and (iii) to Sellers’ Knowledge, no account debtor or note debtor is insolvent or bankrupt.

2.12 Real Property.

2.12.1 The Company owns no real property and does not have any right, title or interest in and to any real property, except as specifically set forth on Schedule 2.12. Schedule 2.12 describes each leasehold interest in real property leased, subleased by, licensed or with respect to which a right to use or occupy has been granted to or by the Company (such leased real property is referred to as the “Real Property”), and specifies the lessor(s) of such Real Property, and identifies each lease or any other Contractual Obligation under which such Real Property is leased by the Company (the “Real Property Leases”). Except as described on Schedule 2.12, there are no written or oral subleases, licenses, concessions, occupancy agreements or other Contractual Obligations granting to any other Person the right of use or occupancy of the Real Property, and there is no Person (other than the Company and/or any lessee(s) of the Real Property specifically identified on Schedule 2.12) in possession of the Real Property. The Company has valid leasehold interests in and to the Real Property and any and all Facilities located thereon, free and clear of all Encumbrances other than Permitted Encumbrances.

2.12.2 The Real Property Leases do not impose restrictions on any portion of the Business that interfere with the Business in any material respect. Neither the Company nor any Seller is obligated to pay any leasing or brokerage commission as a result of the Contemplated Transactions. There is no pending or, to Sellers’ Knowledge, threatened eminent domain taking affecting any of the Real Property. Contained in the Data Room are true, correct and complete copies of all of the Real Property Leases. Except as set forth on Schedule 2.12, no consents or approvals are required to be obtained under the Real Property Leases in connection with the Contemplated Transactions, including from the landlord(s) thereunder.

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2.12.3 Each Facility is supplied with utilities and other services (including gas, electricity, water, drainage, sanitary sewer, storm sewer, fire protection and telephone) necessary for the operation of such Facility as the same is currently operated. To Sellers’ Knowledge, each Facility is in good repair and operating condition, normal wear and tear excepted. Each parcel of Real Property abuts on, and has direct vehicular access to, a public road, or has access to a public road, in each case, to the extent necessary for the conduct of the Business.

2.12.4 The Company has all Permits necessary for its present use and operation of, the Real Property and its lawful occupancy thereof. The current use of the Real Property is in accordance with the certificates of occupancy relating thereto and the terms of any such Permits. To Sellers’ Knowledge, all such Permits will continue in full force and effect immediately after giving effect to the Contemplated Transactions.

2.13 Tangible Personal Property. All of the fixtures and other improvements to the Real Property included in the Assets (including any Facilities) and all of the tangible personal property other than inventory included in the Assets, which are material to the operation of the Business as currently conducted (the “Equipment”), (a) are adequate for their present uses, (b) are in good working order, operating condition and state of repair, reasonable wear and tear excepted, (c) have no material defects (whether patent or latent) and (d) have been maintained in accordance with the standards of any manufacturer or any other governmental or regulatory entities.

2.14 Intellectual Property.

2.14.1 Schedule 2.14.1(a) identifies: (a) all registered Intellectual Property which has been issued to or is otherwise owned by the Company; (b) all pending applications for registration of any Intellectual Property filed by the Company; and (c) each Contractual Obligation pursuant to which the Company or any Seller has granted or has been granted rights to any Intellectual Property or to which any of them is otherwise bound to any third party, excluding “shrink wrap,” “click through” or other standard agreements for commercially available, unmodified third party Software (“Commercial Software”). True, accurate and complete copies of all such Contractual Obligations referred to in clause (c) above, as amended or otherwise modified and in effect, are contained in the Data Room, together with true, accurate and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item of Intellectual Property. Except as set forth on Schedule 2.14.1(b), all such Contractual Obligations are in full force and effect, and none of the Contractual Obligations pursuant to which the Company licenses any Technology or Intellectual Property will terminate, or may be terminated by any Person, solely by the passage of time or at the election of any Person within 120 days after the Closing Date. Except as set forth on Schedule 2.14.1(c), no Person that has licensed Technology or Intellectual Property to the Company has ownership rights or license rights to improvements or derivative works made by the Company in such Technology or Intellectual Property. To Sellers’ Knowledge, there does not exist any claim, allegation, or basis for any claim or allegation, that any Intellectual Property owned by the Company is invalid or unenforceable or that the Company’s rights with respect thereto are subject to claims or defenses of misuse, laches, acquiescence, statute of limitations, abandonment or fraudulent registration. Schedule 2.14.1(d) identifies each trade name, trade dress and unregistered trademark or service mark used by the Company or in connection with the Business or the Company Technology.

2.14.2 Except as set forth on Schedule 2.14.2(a), the Company is the sole owner of all right, title and interest in and to all Intellectual Property with respect to, or has the right to use as specified on Schedule 2.14.2(a), all the Company Technology free and clear of any Encumbrances, other than Permitted Encumbrances. The Company has the right to use all other Technology and Intellectual Property used in its Business as currently conducted and as currently contemplated to be conducted in the

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future. Except as set forth on Schedule 2.14.2(b), no Seller or any other Person (other than the Company) has any ownership or other interest in any Intellectual Property identified on Schedule 2.14.2(a). Except as set forth on Schedule 2.14.2(c), neither the Company nor any of its Subsidiaries has (i) transferred ownership of or granted any exclusive license of or exclusive right to use, or authorized the retention of any exclusive rights to use or joint ownership of, any Company Technology or Intellectual Property owned by the Company, to any other Person or (ii) permitted the Company’s rights in any Intellectual Property to enter into the public domain.

2.14.3 To Sellers’ Knowledge, neither the Company nor any Predecessor (a) has, nor has the conduct of the Business, interfered with, infringed upon, misappropriated, diluted or otherwise violated or come into conflict with any Intellectual Property rights of third parties or (b) has received, orally or in writing, any charge, threat, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, dilution or other violation or conflict (including any claim that it must obtain a license or refrain from using any Intellectual Property rights of any third party in connection with the conduct of the Business or the use of the Company Technology, or, with respect to any other Technology used in the Business, that it must obtain a license that it does not already possess or refrain from using same). Except as set forth on Schedule 2.14.3, to Sellers’ Knowledge, no third party has interfered with, infringed upon, misappropriated, diluted or otherwise violated or come into conflict with any Company Technology or any of the Company’s Intellectual Property. No claim or legal proceeding involving any Intellectual Property by or against the Company is pending or, to Sellers’ Knowledge, has been threatened. Except as otherwise specified on Schedule 2.14.3, and except for licenses to Commercial Software, the Company is not bound by any Contractual Obligation containing any covenant or other provision relating to Intellectual Property that in any way limits or restricts the ability of the Company to use, exploit, assert, or enforce any of the Intellectual Property owned by the Company or conduct its Business as currently conducted and as currently contemplated to be conducted in the future.

2.14.4 Except for that Software listed and described on Schedule 2.14.4, the Company Software constitutes all the Software necessary to conduct the Business as currently conducted by the Company.

2.14.5 Except as set forth on Schedule 2.14.5, with respect to each item of the Company Technology or Intellectual Property used in the Business:

(a) the Company possesses all right, title, and interest in and to such item, or has the valid and Enforceable (subject to the Enforceability Exceptions) right to use same, free and clear of any Encumbrance (other than Permitted Encumbrances);

(b) to Sellers’ Knowledge, such item is not subject to any outstanding Governmental Order, and no Action is pending or threatened, which challenges the legality, validity, enforceability, use or ownership of such item, nor, to Sellers’ Knowledge, is there any basis for such a challenge; and

(c) the Company has not agreed to nor does it have any Contractual Obligation to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to such item.

2.14.6 Schedule 2.14.6 identifies each item of Technology that is used by the Company pursuant to any license, sublicense or other Contractual Obligation, except for agreements for Commercial Software (the “Licenses”). Except as disclosed on Schedule 2.14.6 and the Licenses, there are no royalties or other compensation payable for the use of any such Technology. Contained in the

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Data Room are true, accurate and complete copies of all of the Licenses, in each case, as amended or otherwise modified and in effect, and each of such Licenses is in full force and effect, is valid and enforceable in accordance with its terms, and no party thereto is in material breach of any of the terms thereof. With respect to each such item identified on Schedule 2.14.6: (a) to Sellers’ Knowledge such item is not subject to any outstanding Governmental Order, and no Action is pending or to Sellers’ Knowledge threatened which challenges the legality, validity or enforceability of such item, and (b) neither any Seller nor the Company has granted any sublicense or similar right with respect to any License covering such item.

2.14.7 The Company has taken reasonable and customary measures and precautions necessary to protect and maintain the confidentiality of all Trade Secrets in which the Company has any right, title or interest and otherwise to maintain and protect all such Trade Secrets. Without limiting the generality of the foregoing and except as set forth on Schedule 2.14.7:

(a) all current and former employees, consultants and independent contractors of the Company who are or were involved in, or who have contributed to, the creation or development of any Intellectual Property owned by the Company have executed and delivered to the Company an agreement (containing no exceptions to or exclusions from the scope of its coverage) that protects proprietary information and assigns to the Company any and all such Intellectual Property or have validly waived or otherwise conveyed the benefit of any rights therein to such Company; and

(b) except pursuant to a Disclosed Contract, the Company has not disclosed or delivered to any Person, or permitted the disclosure or delivery to any other Person, of any Company Source Code. No event has occurred, and no circumstance or condition exists as a result of acts or omissions on the part of the Company or Sellers (including the execution of this Agreement or the consummation of the Contemplated Transactions) or, to Sellers’ Knowledge, as a result of any other event or circumstance, that (with or without notice or lapse of time), will, or could reasonably be expected to, result in the disclosure or delivery to any Person of any Company Source Code.

2.14.8 No Software included in the Company Technology, in whole or in part, is subject to the provisions of any Public Software or other source code license agreement that (a) requires the distribution of source code in connection with the distribution of or otherwise making available such Software in object code form; (b) prohibits or limits the Company from charging a fee or receiving consideration in connection with sublicensing or distributing such Software (whether in source code or object code form); or (c) allows a customer, or requires that a customer have, the right to decompile, disassemble or otherwise reverse engineer such Software by its terms and not by operation of Law. “Public Software” means any software that contains, or is derived in any manner (in whole or in part) from, any software that is distributed as freeware or free software (as defined by the Free Software Foundation), open source software (e.g., Linux or software distributed under any license approved by the Open Source Initiative as of the date hereof or as of the Closing Date as set forth at www.opensource.org) or similar licensing or distribution models that require the distribution of source code to licensees free of charge.

2.14.9 The Company and, to the Sellers’ Knowledge, its employees have complied at all times in all material respects with all applicable privacy Laws regarding the collection, processing, disclosure and use of all data consisting of personally identifiable information in each case as such term is defined under the applicable Law that is, or is capable of being, associated with specific individuals.

2.14.10 All of the computer systems material to the continued operation of the Business as currently conducted, including the Software, firmware, hardware, networks, interfaces,

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platforms and related systems owned or used by the Company (collectively, the “Company Systems”): (i) are in satisfactory working order and are scalable to meet current and reasonably anticipated capacity, including the ability to process current and anticipated peak volumes in a timely manner; (ii) have appropriate security, back ups, disaster recovery arrangements, source code escrow arrangements and hardware and software support and maintenance to minimize the risk of material error, breakdown, failure or security breach occurring and to ensure if such event does occur it does not cause a material disruption to any portion of the Business; (iii) are reasonably configured and maintained to minimize the effects of viruses and do not contain viruses, Trojan horses, back doors other malicious code; and (iv) in the last eighteen (18) months, have not suffered any material failures, breakdowns, continued substandard performance or other adverse events that have caused or could reasonably be expected to result in the substantial disruption or interruption in or to the use of such Company Systems and/or the conduct of the Business.

2.14.11 No government funding, facilities or resources of a university, college, other educational institution or research center or funding from third parties was used in the development of any Intellectual Property owned by the Company or any Company Technology, and no Governmental Authority, university, college, other educational institution or research center has any claim or right in or to any Intellectual Property owned by the Company or any Company Technology. No rights have been granted to any governmental entity with respect to any Company product, technology or service, or under any Intellectual Property owned by the Company, other than the same standard commercial rights as are granted by the Company to commercial end users of the Company’s products, technologies and services in the Ordinary Course of Business.

2.14.12 Schedule 2.14.12 lists all industry standards bodies and similar organizations of which the Company is a member, to which it has been a contributor or in which it has been a participant. The Company is not and never was a member in, a contributor to, or participant in any industry standards body or similar organization that could require or obligate the Company to grant or offer to any Person any license or right to any Technology or Intellectual Property owned by the Company.

2.15 Legal Compliance; Illegal Payments; Permits.

2.15.1 Compliance. The Company is and has been in compliance with:

(a) its Organizational Documents; and

(b) all material Legal Requirements.

2.15.2 Anti-Corruption. No agent, Affiliate, employee or other Person acting on behalf of the Company or any Seller directly or indirectly, has (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained or (iv) for any other illegal purpose or (b) established or maintained any fund or asset for the benefit of the Company that has not been recorded in the Company’s books and records. To Sellers’ Knowledge, neither the Company nor any of its directors, officers, employees, agents or representatives has made any improper foreign payment (as defined in the Foreign Corrupt Practices Act of 1977, as amended).

2.15.3 Permits; Gaming Approvals. The Company and, to Sellers’ Knowledge, each of the Company’s officers, directors and key employees, have been granted all Permits under all

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applicable Legal Requirements necessary for the conduct of the Business as currently conducted. Schedule 2.15.3(a) describes each such Permit, together with the Governmental Authority or other Person responsible for issuing such Permit. Schedule 2.15.3(b) sets forth a list of all Gaming Approvals held by, granted to or applied for by the Company or any of Sellers, together with the jurisdiction, type of license, permit or approval (as applicable) and the Governmental Authority responsible for issuing such Gaming Approval. Except as disclosed on Schedule 2.15.3(a) or Schedule 2.15.3(b), (i) the Permits and Gaming Approvals are valid and in full force and effect, (ii) the Company is not in breach or violation of, or default under, any such Permit or Gaming Approval, and (iii) the Company has properly and validly completed in all material respects all filings and registrations that are required for the operation of its Business as currently conducted. There is no Action pending or, to Sellers’ Knowledge, threatened that would result in the termination, revocation, suspension or restriction of any Permit or Gaming Approval or the imposition of any fine, penalty or other sanctions for violation of any Legal Requirement relating to any Permit or Gaming Approval. Except as set forth on Schedule 2.15.3(b), neither the Company nor any Seller has been denied a Gaming Approval in any jurisdiction, withdrawn an application for a Gaming Approval in any jurisdiction, or, with respect to a Gaming Approval then held by the Company or any Seller, had any such Gaming Approval suspended, withdrawn, revoked or limited in any manner.

2.15.4 Gaming Equipment. All Gaming Equipment has been and continues to be manufactured, sold, leased, operated and/or distributed by the Company in compliance in all material respects with all applicable Legal Requirements.

2.15.5 Additional Compliance Representations.

(a) No petition under the federal bankruptcy laws or any state insolvency law has been filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of, (i) any Seller or the Company, (ii) any partnership in which any Seller or the Company was a general partner at or within two years before the Closing Date, or (iii) any corporation or business association of which any Seller was an executive officer at or within two years before the Closing Date.

(b) No Seller, within the last five (5) years, nor the Company has been convicted in a criminal proceeding (excluding traffic violations and other minor offenses), no Seller nor the Company is a named subject of a pending criminal proceeding, and, to Sellers’ Knowledge, no Seller nor the Company is a target of a pending criminal proceeding or investigation.

(c) No Seller nor the Company has been the subject of any Governmental Order not subsequently reversed, suspended or vacated, permanently or temporarily enjoining such Seller or the Company from, or otherwise limiting such Seller’s or the Company’s involvement or right to engage in, any type of business practice.

(d) No Seller nor the Company has been found by a Governmental Authority in a civil action or by the Securities and Exchange Commission (“SEC”) to have violated any securities Law, which judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated.

(e) No Seller nor the Company, has been involved in any of the following matters: (a) making any political contribution that is or would be illegal under any Law; (b) the disbursement or receipt of funds of the Company outside the normal system of accountability; (c) unlawful payments, whether direct or indirect, to or from foreign or domestic governments, officials, employees or agents for purposes other than the satisfaction of lawful obligations, or any transaction which has as its intended effect the transfer of assets of any Seller or the Company for the purpose of effecting such payment; or (d) the intentionally improper or inaccurate recording of payments and receipts on the books of the Company.

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2.16 Inventories. The Company maintains sufficient Inventory in the Ordinary Course of Business to conduct the Business consistent with past practices. The Inventory of the Company reflected on the Most Recent Balance Sheet and in the records and books of account of the Company since the Most Recent Balance Sheet Date is of a quality and a quantity usable and, with respect to finished goods, saleable, as the case may be, in the Ordinary Course of Business. All Inventory has been valued at cost, and all unmarketable, returned, rejected, damaged, slow moving or obsolete inventory has been written off or written down to net realizable value in the Company’s books and records and in the Most Recent Balance Sheet. The Company has sole custody and control of and maintains adequate insurance coverage on all materials, supplies, parts or other assets delivered to the Company by or on behalf of its customers for use in connection with projects the Company is undertaking for such customers (the “Customer Assets”); since December 31, 2009, no Customer Asset has been damaged, lost, stolen, or otherwise suffered a material diminution in value from the time of receipt by the Company; and the Company has not received written notice of any claim, loss, or damage related to the Customer Assets.

2.17 Employee Benefit Plans.

(a) Schedule 2.17(a) contains a true, correct and complete list of each (i) oral or written employment or consulting agreement to or under which the Company is a party or has or may have any Liability and (ii) employee benefit plan, program or arrangement currently sponsored, maintained or contributed to by the Company or any ERISA Affiliate, or with respect to which the Company or any ERISA Affiliate has or may have any Liability, including, without limitation, any “employee benefit plan” (within the meaning of Section 3(3) of ERISA, including multiemployer plans within the meaning of Section 3(37) of ERISA, each a “Multiemployer Plan”), all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the Contemplated Transactions or otherwise), whether formal or informal, oral or written, legally binding or not. All such plans, agreements, programs, policies and arrangements shall be collectively referred to as the “Employee Plans”.

(b) With respect to each Employee Plan, Sellers have made available in the Data Room a current, true and complete copy (or, to the extent no such copy exists, an accurate description) thereof and, to the extent applicable: (i) any plan documents, contracts and/or agreements relating to any Employee Plan, including all trust agreements, insurance or annuity contracts, investment management agreements, record keeping agreements and other material documents or instruments related thereto; (ii) the most recent determination letter, if applicable; (iii) any summary plan description concerning the extent of the benefits provided under a Employee Plan; (iv) a summary of any proposed amendments or changes anticipated to be made to the Employee Plans at any time within the twelve months immediately following the date hereof; and (v) for the three most recent years (A) the Form 5500 and attached schedules, (B) reviewed financial statements, (C) actuarial valuation reports and (D) any non-discrimination testing results.

(c) (i) Each Employee Plan has been established and administered in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code, the Health Insurance Portability and Accountability Act of 1996 and other applicable Laws; (ii) each Employee Plan which is intended to be qualified within the meaning of Section 401(a) of the Code is so qualified and has received a favorable determination or opinion letter as to its qualification, and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of

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such qualification; (iii) no event has occurred and no condition exists that would subject the Company, either directly or by reason of its affiliation with any ERISA Affiliate, to any Tax, fine, Encumbrance, penalty or other Liability imposed by ERISA, the Code or other applicable Laws; (iv) for each Employee Plan with respect to which a Form 5500 has been filed, no material change has occurred with respect to the matters covered by the most recent Form since the date thereof; (v) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in Liability has occurred with respect to any Employee Plan; (vi) no nonexempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)) has occurred with respect to any Employee Plan; (vii) no Employee Plan has failed or is expected to fail to satisfy the minimum funding standards of Section 302 of ERISA or 412 of the Code or is or is expected to be in “at risk status” within the meaning of Section 430(i)(4) of the Code, and no Employee Plan has, or is expected to have, an “adjusted funding target attainment percentage”, as defined in Section 436 of the Code, that is less than 60%; (viii) except as contemplated by this Agreement, there is no present intention that any Employee Plan be materially amended, suspended or terminated, or otherwise modified to change benefits (or the levels thereof) under any Employee Plan; (ix) no Employee Plan is a split-dollar life insurance program or otherwise provides for loans to executive officers (within the meaning of the Sarbanes-Oxley Act of 2002), except as otherwise permitted by the Code and ERISA; and (x) the Company has not incurred any current or projected Liability in respect of post-employment or post-retirement health, medical or life insurance benefits for current, former or retired employees of the Company, except as required to avoid an excise tax under Section 4980B of the Code or otherwise except as may be required pursuant to any other applicable Law.

(d) No Employee Plan is an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) subject to Title IV of ERISA or Section 412 of the Code, nor a Multiemployer Plan, and the Company has no obligation to contribute, and has not incurred any Liability (including any obligation to make any contribution) to or in respect of any such plans. No Employee Plan is a self-insured group health plan.

(e) With respect to each Employee Plan, (i) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or to Sellers’ Knowledge threatened; (ii) to Sellers’ Knowledge no facts or circumstances exist that could give rise to any such actions, suits or claims; (iii) no written or oral communication has been received from the Pension Benefit Guaranty Corporation (the “PBGC”) in respect of any Employee Plan subject to Title IV of ERISA concerning the funded status of any such plan or any transfer of assets and Liabilities from any such plan in connection with the Contemplated Transactions; and (iv) no administrative investigation, audit or other administrative proceeding by the Department of Labor, the PBGC, the Internal Revenue Service (the “IRS”) or other governmental agencies are pending, in progress or to Sellers’ Knowledge threatened (including any routine requests for information from the PBGC).

(f) Except as set forth on Schedule 2.17(f), no Employee Plan or Legal Requirement exists that, as a result of the execution of this Agreement, approval of this Agreement by the Company’s board of directors, or the Contemplated Transactions (whether alone or in connection with any subsequent event(s)), would (i) result in severance pay, termination indemnity or any similar payment or any increase in severance pay, termination indemnity or any similar payment, (ii) accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any of the Employee Plans, (iii) limit or restrict the right of the Company to merge, amend or terminate any of the Employee Plans (except for any safe-harbor requirements that may apply to the Company’s 401(k) plan), (iv) cause the Company to record additional compensation expense on its income statement with respect to any outstanding stock option or other equity-based award, or (v) result in payments under any of the Employee Plans which would not be deductible under Section 280G of the Code.

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(g) There has been no amendment to, written interpretation of or announcement (whether or not written) by the Company relating to, or any change in employee participation or coverage under, any Employee Plan that would increase the expense of maintaining such Employee Plan above the level of the expense incurred in respect thereof for the most recent fiscal year ended prior to the date hereof.

(h) No compensation under any Employee Plan subject to Section 409A of the Code is or has been required to be includible in the gross income of any participant or beneficiary by reason of Section 409A(a)(1)(A) of the Code or is or has been subject to any additional tax under Section 409A(a)(1)(B) of the Code, and no amounts are or have been includible in the gross income of any participants or beneficiaries by reason of Section 409A(b) of the Code.

2.18 Environmental Matters.

2.18.1 The Company has complied with, and is in compliance with, in all material respects all Environmental Laws. Except as set forth on Schedule 2.18, the Company has not received in writing, any actual or threatened order, notice, report or other communication of any actual or potential violation or failure by the Company to comply with any Environmental Laws.

2.18.2 Neither the Company nor any Seller has received any written notice that there are any pending or, threatened claims or Encumbrances resulting from any Environmental, Health and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal or mixed) owned or operated by the Company.

2.18.3 Except as set forth on Schedule 2.18, the Company has not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, Released or exposed any Person to, any Contaminants, or owned or operated any property or facility that is or has been contaminated by any Contaminants, so as to give rise to any current or future material Liability of the Company pursuant to any Environmental Laws.

2.18.4 The Company has not assumed, undertaken or otherwise become subject to, or provided any indemnity with respect to, any Liability pursuant to any Environmental Laws of any other Person.

2.18.5 Other than in material compliance with all applicable Legal Requirements, the Company has not manufactured, sold, marketed, installed or distributed products or items containing asbestos, silica or other Contaminants and does not have any Liability with respect to the presence or alleged presence of Contaminants in any product or item or at or upon any property or Facility.

2.18.6 Contained in the Data Room are true, correct and complete copies of all environmental audits, reports, assessments and other documents in the Company’s or any Seller’s possession or under their reasonable control that bear on environmental, health or safety Liabilities relating to the past or current operations, Facilities or properties of the Company and the Business.

2.18.7 Notwithstanding anything to the contrary in Section 2.18, the management and use of minimal quantities of Contaminants on the Real Property or in the Business shall

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not be a breach of the representations and warranties contained in Section 2.18; provided that, such materials are of a type and are used and managed in quantities in the Ordinary Course of Business relevant to the Company’s Facilities and the operations of the Business in the industry in which the Company operates (including paint, cleaning fluids and supplies normally used in the Business), and such materials are being and have been managed and used in compliance in all material respects with all Environmental Laws.

2.19 Contracts.

2.19.1 Contracts. Except as disclosed on Schedule 2.19, the Company is not bound by or a party to:

(a) any Contractual Obligation (or group of related Contractual Obligations) for the purchase or sale of inventory, raw materials, commodities, supplies, goods, products, equipment or other personal property, or for the furnishing or receipt of services, in each case, the performance of which will extend over a period of more than one year or which provides for an annual payment to or by the Company in the aggregate in excess of fifty thousand dollars ($50,000);

(b) (i) any capital lease or (ii) any other lease or other Contractual Obligation relating to the Equipment providing for annual rental payments in excess of fifty thousand dollars ($50,000), under which any Equipment is held or used by the Company;

(c) any Contractual Obligation relating to the acquisition or disposition of (i) any business (whether by merger, consolidation or other business combination, sale of securities, sale of assets or otherwise) or (ii) any asset other than in the Ordinary Course of Business;

(d) any Contractual Obligation under which the Company is, or may become, obligated to pay any amount in respect of indemnification obligations, purchase price adjustment or otherwise in connection with any (i) acquisition or disposition of assets or securities (other than the sale of inventory in the Ordinary Course of Business), (ii) merger, consolidation or other business combination or (iii) series or group of related transactions or events of the type specified in the immediately preceding clauses (i) and (ii).

(e) any Contractual Obligation concerning or consisting of a partnership, limited liability company or joint venture agreement;

(f) any Contractual Obligation (or group of related Contractual Obligations) (i) under which the Company has created, incurred, assumed or guaranteed any Debt or (ii) under which the Company has permitted any Asset to become subject to an Encumbrance, other than a Permitted Encumbrance;

(g) any Contractual Obligation under which any other Person has guaranteed any Debt of the Company;

(h) any Contractual Obligation to purchase goods or services exclusively from a Person or Persons or purchase a minimum amount of goods or services from a Person or Persons, or all or a portion of the supply of certain goods or services utilized by the Company from a Person or Persons, or granting any Person “most favored nation” or “best price” status;

(i) any Contractual Obligation involving any obligation on the part of the Company or any Seller to refrain from competing with any Person, from soliciting any employees,

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independent contractors or customers of any Person or from conducting any other lawful commercial activity (including in any geographic region) or any such Contractual Obligation for the Company’s benefit from any other Person(s);

(j) any Contractual Obligation under which the Company is, or may become, obligated to incur any severance pay or special Compensation obligations which would become payable by reason of this Agreement or the Contemplated Transactions;

(k) any Contractual Obligation under which the Company has, or may have, any Liability to any investment bank, broker, financial advisor, finder or other similar Person (including an obligation to pay any legal, accounting, brokerage, finder’s, or similar fees or expenses in connection with this Agreement or the Contemplated Transactions);

(l) any profit sharing, equity option, equity purchase, equity appreciation, deferred compensation, severance or other plan or arrangement for the benefit of the Company’s current or former directors, officers or employees, consultants or independent contractors;

(m) any Contractual Obligation providing for the employment or consultancy (including on an independent contractor basis) with an individual (or in the case of a consultant or independent contractor, an entity) on a full-time, part-time, consulting or other basis or otherwise providing Compensation or other benefits to any officer, director, employee or consultant (other than an Employee Plan), in each case (unless such Contractual Obligation is not terminable at will by the Company without any Liability to the Company), providing for non-contingent payments of more than fifty thousand dollars ($50,000) annually;

(n) any agency, dealer, distributor, sales representative, marketing, handler, third party service provider, or other similar agreement, in each case (unless such Contractual Obligation is not terminable at will by the Company without any Liability to the Company), providing for non-contingent payments of more than fifty thousand dollars ($50,000) annually;

(o) any Contractual Obligation under which the Company has advanced or loaned an amount to any of its Affiliates or employees (other than travel allowances in the Ordinary Course of Business);

(p) any settlement, conciliation or similar Contractual Obligations imposing an obligation on the Company after the Closing Date;

(q) any Contractual Obligation that limits the ability of the Company or any of its Affiliates to incur any Debt or to Guarantee any Debt or other obligation of any Person, or that limits the amount of any Debt that the Company may incur or Guarantee, or prohibits it from granting any Encumbrance, or than any Permitted Encumbrance, on any Asset to secure any Debt incurred or Guaranteed; or

(r) any Contractual Obligation not otherwise disclosed on Schedule 2.19 and (A) pursuant to which the Company has an aggregate annual liability to any Person in excess of fifty thousand dollars ($50,000), or (B) were entered into other than in the Ordinary Course of Business or other than on arms-length terms.

Contained in the Data Room are true, accurate and complete copies of each written Contractual Obligation (or to the extent no such copy exists, an accurate description thereof) listed on Schedule 2.19, in each case, as amended or otherwise modified and in effect.

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2.19.2 Enforceability, etc. Each Contractual Obligation required to be disclosed on Schedule 2.7 (Debt), Schedule 2.12 (Real Property Leases), Schedule 2.14 (Intellectual Property), Schedule 2.17(a) (Employee Benefit Plans), Schedule 2.19 (Contracts), Schedule 2.21 (Customers and Suppliers) or Schedule 2.25 (Insurance) (each, a “Disclosed Contract”) is Enforceable (subject to the Enforceability Exceptions) against the Company and, to Sellers’ Knowledge, each other party to such Contractual Obligation, and is in full force and effect, and, except as set forth on Schedule 2.19.2, the Disclosed Contracts that have not expired in accordance with their respective terms will continue to be so Enforceable (subject to the Enforceability Exceptions) and in full force and effect upon the Closing, and the consummation of the Contemplated Transactions shall not result in any payment or payments being due from the Company to any Person following the consummation of the Contemplated Transactions.

2.19.3 Breach, etc. Except as disclosed on Schedule 2.19.3, neither the Company nor, to Sellers’ Knowledge, any other party to any Disclosed Contract is in material breach or violation of, or default under, or has repudiated any provision of, any Disclosed Contract (including all warranty obligations or otherwise), nor to Sellers’ Knowledge has any event occurred which, with the passage of time or the giving of notice, or both, would constitute a material breach or violation of, or default under, any Disclosed Contract (including all warranty obligations or otherwise). Neither any Seller nor the Company has received written notice from any other party to any Disclosed Contract, or to Sellers’ Knowledge has any reason to believe, that such party intends to terminate such Disclosed Contract or materially alter the relationship of the parties under such Disclosed Contract. No party to any Disclosed Contract has given the Company or any Seller written notice of any action to terminate, cancel, rescind or procure a judicial reformation thereof.

2.20 Affiliate Transactions. Except for the matters disclosed on Schedule 2.20, no Seller nor any Affiliate of any Seller is, directly or indirectly, an officer, director, employee, consultant, competitor, creditor, debtor, customer, distributor, supplier or vendor of, or is a party to any Contractual Obligation with, the Company. Except as disclosed on Schedule 2.20, no Seller nor any Affiliate of any Seller owns or has any ownership interest in any Asset used in, or necessary to, the Business. Except as disclosed on Schedule 2.20, no officer, director or employee of the Company is, directly or indirectly, a creditor, debtor, customer, distributor, supplier or vendor of, or is a party to any Contractual Obligation with, the Company.

2.21 Customers and Suppliers. Schedule 2.21 sets forth a true, correct and complete list of (a) the ten largest customers of the Company (measured by aggregate billings) for the fiscal year ended December 31, 2012 and for the five months ended May 31, 2013, and (b) the ten largest suppliers of materials, products or services to the Company (measured by the aggregate amount purchased by the Company) for the fiscal year ended December 31, 2012 and for the five months ended May 31, 2013. The relationships of the Company with the customers and suppliers required to be listed on Schedule 2.21 are good commercial working relationships, and none of such customers or suppliers has canceled, terminated or otherwise materially altered its relationship with the Company or notified the Company in writing of any intention to do any of the foregoing or otherwise threatened in writing to cancel, terminate or materially alter its relationship with the Company within the past 18 months.

2.22 Customer Warranties. There are no pending, nor to Sellers’ Knowledge, threatened, claims under or pursuant to any warranty, whether expressed or implied, on the Company’s Gaming Equipment or other products or services sold, leased or delivered by the Company prior to the Closing Date that are not disclosed or referred to in the Financials and that are not fully reserved against in the Company’s books and records in accordance with GAAP. Since January 1, 2010, the Company has not incurred any material warranty claims.

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2.23 Employees.

2.23.1 All employees of the Company are, including job title, location and compensation, listed on Schedule 2.23. Except as set forth on Schedule 2.19, to Sellers’ Knowledge no present or past employee of the Company is bound by a non-competition agreement. Except as set forth on Schedule 2.23, the Company is not a party to any Contractual Obligation with any employee or former employee.

2.23.2 Except as disclosed on Schedule 2.23, there are no labor troubles (including any work slowdown, lockout, stoppage, picketing or strike) pending, or to Sellers’ Knowledge, threatened between the Company, on the one hand, and its employees, on the other hand. Except as disclosed on Schedule 2.23, (a) no employee of the Company is represented by a labor union, association or representative body, (b) the Company is not a party to, or otherwise subject to, any collective bargaining agreement or other labor union, association or representative body Contractual Obligation, (c) during the past five years there have been no strikes, slowdowns, work stoppages, disputes, lockouts, or to Sellers’ Knowledge, threats thereof, by or with respect to any employees of the Company, (d) no petition has been filed or proceedings instituted by an employee or group of employees of the Company with any labor relations board seeking recognition of a bargaining representative and (e) there is no organizational effort currently being made or, to Sellers’ Knowledge, threatened by, or on behalf of, any labor union, association or representative body to organize employees of the Company and no demand for recognition of employees of the Company has been made by, or on behalf of, any labor union, association or representative body. The Company is not a party to, or otherwise bound by, any consent decree with, or citation or other Governmental Order relating to employees or employment practices. The Company is in material compliance with applicable Legal Requirements, Contractual Obligations, and policies relating to employment, employment practices, wages, hours, and terms and conditions of employment, including the obligations of the Fair Labor Standards Act (“FLSA”) and the Worker Adjustment and Retraining Notification Act of 1988 (“WARN”), and all other notification and bargaining obligations arising under any collective bargaining agreement, by Legal Requirement or otherwise. The Company has not effectuated a “plant closing” or “mass layoff” as those terms are defined in WARN, affecting in whole or in part any site of employment, facility, operating unit or employee of the Company without complying with all provisions of WARN, or implemented any early retirement, separation or window program within the past five years. No executive officer’s employment with the Company has been terminated for any reason within the past five years, nor has any such officer notified the Company of his or her intention to resign or retire as a result of the Contemplated Transactions or otherwise.

2.23.3 The Company is not delinquent in payments to any of its (a) employees for any wages, salaries, overtime pay, commissions, bonuses, benefits or other Compensation, or (b) consultants for payments for any services. None of the Company’s employment policies or practices is currently being audited or, to Sellers’ Knowledge, investigated by any Governmental Authority. There is no pending or, to Sellers’ Knowledge, threatened Action, unfair labor practice charge, or other charge or inquiry against the Company brought by or on behalf of any employee, prospective employee, former employee, retiree, labor organization or other representative of the Company’s employees, or other individual or any Governmental Authority with respect to employment practices brought by or before any Governmental Authority.

2.24 Litigation; Governmental Orders.

2.24.1 Litigation. Except as disclosed on Schedule 2.24.1, there is no Action to which the Company is a party (either as plaintiff or defendant) or to which its Assets are subject pending, or to Sellers’ Knowledge, threatened. There is no Action to which the Company or any Seller is a party (either as plaintiff or defendant) or to which its or such Seller’s assets are subject pending, or to Sellers’

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Knowledge, threatened, which (a) in any manner challenges or seeks the rescission of, or seeks to prevent, enjoin, alter or delay the consummation of, or otherwise relates to, this Agreement or the Contemplated Transactions, or (b) may result in any change in the current equity ownership of the Company. Neither the Company nor any Seller presently intends to initiate any Action (with respect to any Seller, related to the Business).

2.24.2 Governmental Orders. Except as disclosed on Schedule 2.24.2, no Governmental Order has been issued to which the Company, the Assets or the Business is subject.

2.25 Insurance. Schedule 2.25 sets forth a true, correct and complete list of insurance policies by which the Company or any of its Assets, employees, officers or directors or the Business are insured (the “Liability Policies”). The list includes for each Liability Policy the type of policy, policy number, name of insurer and expiration date. Sellers have made available in the Data Room true, correct and complete copies of all Liability Policies, in each case, as amended or otherwise modified and in effect. Schedule 2.25 describes any self-insurance arrangements affecting the Company. The Company has since January 1, 2012 maintained in full force and effect insurance with respect to the Assets and the Business in such amounts and against such losses and risks as is required under the terms of any applicable Real Property Leases or Contractual Obligation listed on Schedule 2.19.

2.26 Banking Facilities. Schedule 2.26 sets forth a true, correct and complete list of: (a) each bank, savings and loan or similar financial institution with which the Company has an account or safety deposit box or other arrangement, and any numbers or other identifying codes of such accounts, safety deposit boxes or such other arrangements maintained by the Company thereat; (b) the names of all Persons authorized to draw on any such account or to have access to any such safety deposit box facility or such other arrangement; and (c) any outstanding powers of attorney executed by or on behalf of the Company in respect of any such account, safety deposit box or other arrangement.

2.27 Powers of Attorney. Except as set forth on Schedule 2.27, the Company has no general or special powers of attorney outstanding (whether as grantor or grantee thereof).

2.28 No Brokers. Except for Innovation and Wadley, the fees and expenses of which are to be paid pursuant to Section 1.6.2(b)(iv) and Section 1.6.2(b)(v), respectively, or to be paid solely by Sellers following Closing, neither the Company nor any Seller has Liability of any kind to, and is not subject to any claim of, any broker, finder or agent in connection with the Contemplated Transactions.

2.29 Disclosure. To Sellers’ Knowledge, none of the representations and warranties contained in this Section 2 and or in the Company Agreements contains any untrue statement of material fact or omits to state any material fact necessary in order to make the statements and information contained therein not misleading. There is no material fact that Sellers have not disclosed to Buyer which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

3.	REPRESENTATIONS AND WARRANTIES OF BUYER.

In order to induce Sellers and the Company to enter into and perform this Agreement and to consummate the Contemplated Transactions, Buyer hereby represents and warrants to Sellers and the Company as follows:

3.1 Organization. Buyer is duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to own its properties and to carry on its business as it is now being conducted.

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3.2 Power and Authorization. The execution, delivery and performance by Buyer of this Agreement and the consummation of the Contemplated Transactions are within the power and authority of Buyer and have been duly authorized by all necessary action on the part of Buyer, and no other corporate or other action on the part of Buyer or any other Person is necessary to authorize the execution and delivery of this Agreement by Buyer or the consummation by Buyer of the Contemplated Transactions. This Agreement (a) has been duly executed and delivered by Buyer and (b) is a legal, valid and binding obligation of Buyer, Enforceable against Buyer in accordance with its terms (subject to the Enforceability Exceptions).

3.3 Authorization of Governmental Authorities. No action by (including any authorization, consent or approval), or in respect of, or filing with, any Governmental Authority (including, without limitation, under any Gaming Laws) is required for, or in connection with, the valid and lawful (a) authorization, execution, delivery and performance by Buyer of this Agreement or (b) the consummation of the Contemplated Transactions by Buyer.

3.4 Noncontravention. Neither the execution, delivery and performance by Buyer of this Agreement nor the consummation of the Contemplated Transactions will:

(a) violate any provision of any Legal Requirement applicable to Buyer;

(b) result in a breach or violation of, or default under, or give rise to a right for any third-party to terminate or any prepayment penalty under any Contractual Obligation of Buyer;

(c) require any action by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any Contractual Obligation; or

(d) result in a breach or violation of, or default under, Buyer’s Organizational Documents.

3.5 No Brokers. Buyer has no Liability of any kind to any broker, finder or agent with respect to the Contemplated Transactions.

3.6 Investment Intention. Buyer is acquiring the Shares for its own account, for investment purposes only and not with a view to the distribution (as such term is used in Section 2(11) of the 1933 Act) thereof. Buyer understands that the Shares have not been registered under the 1933 Act and cannot be sold unless subsequently registered under the 1933 Act or an exemption from such registration is available. Buyer understands that no public market now exists for the Shares, and that there are no assurances that a public market will ever exist for the Shares.

3.7 No Reliance. Buyer acknowledges that neither the Company nor either Seller has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Company, its Subsidiaries, Sellers or their respective Affiliates or the Assets except as expressly set forth in this Agreement, and neither the Company nor either Seller shall have any liability to Buyer for its reliance on any information regarding the Company, its Subsidiaries, Sellers or their respective Affiliates and the Assets that is not contained in this Agreement.

4.	PRE-CLOSING COVENANTS.

4.1 Access and Investigation. Between the date of this Agreement and the Closing Date (the “Pre-Closing Period”), Sellers, the Company and the Company Subsidiaries will, and will cause each of their respective Representatives to, (a) afford Buyer and its Representatives, upon reasonable advance

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notice and during regular business hours, full and free access to the Company’s and the Company Subsidiaries’ personnel (including, for purposes of negotiating post-Closing employment and non-competition arrangements), properties, Contractual Obligations, customers, books and records (including all Tax records), and other documents and data, (b) furnish Buyer and its Representatives with and upload to the Data Room copies of all such Contractual Obligations, books and records, and other existing documents and data as Buyer and its Representatives may reasonably request, and (c) furnish Buyer and its Representatives with and upload to the Data Room such additional financial, operating, and other data and information as Buyer or its Representatives may reasonably request.

4.2 Confidentiality. Buyer and Sellers acknowledge and agree that the Confidentiality Agreement remains in full force and effect, and this Agreement, together with each other agreement and instrument delivered in connection with the Contemplated Transactions, shall be deemed “Confidential Information” as defined by the Confidentiality Agreement.

4.3 Operation of the Company and the Business.

4.3.1 Ordinary Course. Except as expressly consented to in writing by Buyer or as contemplated hereby, during the Pre-Closing Period the Company shall and Sellers shall cause the Company and the Company Subsidiaries to act and carry on the Business solely in the Ordinary Course of Business, maintain and preserve the Company’s and the Company Subsidiaries’ respective business organization, Assets, Governmental Authorizations and properties, and use their respective commercially reasonable efforts to preserve the Company’s and the Company Subsidiaries’ respective business relationships with customers, strategic partners, suppliers, distributors and others having business dealings with any of them, continue to perform under all Disclosed Contracts, maintain all Insurance Policies set forth on Schedule 2.25 and keep available the services of their respective present officers, employees and consultants.

4.3.2 Negative Covenants. Without limiting the generality of the foregoing, except (i) as expressly consented to in writing by Buyer, (ii) as contemplated by this Agreement or (iii) in the Ordinary Course of Business, during the Pre-Closing Period:

(a) the Company and the Company Subsidiaries shall not directly or indirectly do any of the following:

(i) except for the (x) Phone Card Business Dividend, (y) the Equalizing Dividend and (z) cash dividends paid to Sellers in respect of their respective Shares in an aggregate amount not to exceed $66,666.67 per month, declare, set aside or pay any distributions or dividends, split, combine or reclassify any Equity Securities or issue or authorize the issuance of any other Equity Securities in respect of, in lieu of or in substitution for its Equity Securities or Debt; or purchase, redeem or otherwise acquire any Equity Securities;

(ii) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any Equity Securities or Debt (other than in connection with Qualified Financing);

(iii) amend or adopt any amendments to the Company’s or any Company Subsidiary’s Organizational Documents;

(iv) acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any Person or division thereof, or any assets that are material, in the aggregate, to the Company or any Company Subsidiary;

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(v) sell, lease, license, pledge, or otherwise dispose of or otherwise encumber or subject (or allow to become subject) to any Encumbrance (other than a Permitted Encumbrance) any of its material properties or Assets, including any capital asset or related capital assets with a fair market value in excess of fifty thousand dollars ($50,000);

(vi) modify or amend any Disclosed Contract, enter into any Contractual Obligation that would be a Disclosed Contract or waive, release or assign any rights or claims under any such Disclosed Contract or Contractual Obligation;

(vii) (A) incur any Debt in an aggregate principal amount not to exceed $50,000, (B) issue, sell or amend any Debt, (C) Guarantee or otherwise become Liable for any Debt of another Person, (D) make any material loans, advances or capital contributions to, or Investment in, any other Person, (E) modify or cancel any material third-party Debt owed to the Company, or (F) enter into any arrangement having the economic effect of the foregoing (other than, in the case of each of the preceding clauses (A) and (B), in connection with Qualified Financing);

(viii) make any capital expenditures that, when added to all other capital expenditures made by or on behalf of the Company following the date hereof, exceed Fifty Thousand Dollars ($50,000) in the aggregate;

(ix) except as required to comply with applicable Laws or the terms of any Employee Plan, (A) adopt, enter into, terminate or amend any Employee Plan, (B) increase the Compensation or fringe benefits of, or pay any bonus not required by an existing plan, arrangement or agreement to, any manager, officer or employee of the Company, (C) grant any Equity Securities, or (D) take any action other than in the Ordinary Course of Business to fund or in any other way secure the payment of compensation or benefits under any Employee Plan;

(x) except as required to comply with applicable Tax Laws, make, revoke, amend or change any election in respect of Taxes, file any amendment to a Tax Return, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

(xi) threaten, commence, pay, discharge, settle or satisfy any Action;

(xii) terminate or fail to renew any Governmental Authorization that is required for continued operations;

(xiii) enter into, amend or modify any collective bargaining agreement or union contract with any labor organization or union or waive, release or assign any rights or claims under any such agreement or contract;

(xiv) accelerate or defer any material obligation or payment by or to the Company or any Company Subsidiary, or not pay any accounts payable or other obligation of the Company or any Company Subsidiary when due, unless contested in good faith;

(xv) fail to maintain insurance at levels at least comparable to current levels;

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(xvi) discontinue any line of business or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, recapitalization or other similar reorganization;

(xvii) take any action that would (A) result in a representation or warranty of Sellers and/or the Company becoming untrue, (B) result in any of the conditions set forth in Section 6 or Section 7 not being satisfied, or (C) otherwise prevent or materially delay or materially impair its ability to consummate the Contemplated Transactions on the terms contemplated by this Agreement;

(xviii) at any time within the 90-day period prior to the Closing Date, effectuate a “plant closing” or “mass layoff” as those terms are defined in WARN or any similar state Law, affecting in whole or in part any site of employment, facility, operating unit or employee of the Company or any Company Subsidiary;

(xix) make any change to its accounting methods, principles or practices (including with respect to Taxes) or to the Financials or to the working capital policies applicable to the Company or any Company Subsidiary, except as required by GAAP;

(xx) except for entering into any non-exclusive license agreements in the Ordinary Course of Business, transfer or grant to any third party any rights with respect to any Intellectual Property;

(xxi) form any Subsidiary or acquire any Equity Security of any Person;

(xxii) write off as uncollectible, or establish any extraordinary reserve with respect to any billed or unbilled Account Receivable or other Debt outside existing reserves; or

(xxiii) authorize or enter into an agreement to do anything prohibited by the foregoing; and

(b) no Seller shall directly or indirectly do any of the following:

(i) sell, lease, pledge, or otherwise transfer, dispose of or otherwise encumber or subject (or allow to become subject) to any Encumbrance any Shares (other than Encumbrances granted to Amaya or an Affiliate thereof in connection with Debt incurred by the Company under the Equipment Placement Draw Down Facility);

(ii) take any action that would (A) result in a representation or warranty of Sellers and/or the Company becoming untrue, (B) result in any of the conditions set forth in Section 6 or Section 7 not being satisfied, or (C) otherwise prevent or materially delay or materially impair its ability to consummate the Contemplated Transactions on the terms contemplated by this Agreement; or

(iii) authorize or enter into an agreement to do anything prohibited by the foregoing.

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4.4 Commercially Reasonable Efforts; Notification.

4.4.1 Upon the terms and subject to the conditions set forth in this Agreement, except as otherwise provided in this Section 4.4, each of Sellers, the Company and Buyer agrees to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary to consummate and make effective, in the most expeditious manner practicable, the Contemplated Transactions, including, without limitation, (i) preparing and filing of all forms, registrations and notices required to be filed under applicable Law, obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Authorities and the making of all necessary registrations and filings (including filings with Governmental Authorities and as may be required pursuant to applicable Gaming Laws) and the taking of all reasonable steps as may be necessary to obtain any required approval, consent or waiver from, to provide notice to, or to avoid an Action by, any Governmental Authority, (ii) obtaining all necessary consents, approvals or waivers from third parties, (iii) defending of any Actions challenging this Agreement or the consummation of the Contemplated Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed and (iv) the execution and delivery of any additional instruments necessary to consummate the Contemplated Transactions. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, in no event shall Buyer be obligated to, and the Company shall not without the prior written consent of Buyer, agree or proffer to divest or hold separate, or enter into any licensing, business restriction or similar arrangement with respect to, any assets (whether tangible or intangible) or any portion of any business of Buyer, its Affiliates or the Company, in each case in response to a request by or discussion with a Governmental Authority in order to address any regulatory issues associated with or arising from the Contemplated Transactions, nor shall Buyer be obligated to (i) consent to any change in the terms of any agreement or arrangement which Buyer in its reasonable discretion deems materially adverse to the interests of Buyer or the Company, or (ii) incur any material expenses (except as expressly contemplated by this Agreement), or agree to materially limit the conduct of its (or any of its Subsidiaries’ or Affiliates’, or the Company’s) business or divest itself (or any of its Subsidiaries or Affiliates, or the Company) of any assets or properties. Buyer agrees to use commercially reasonable efforts to prepare and file, on or prior to the sixtieth (60^th) day after the date of this Agreement. those forms, applications, notices or registrations that are required for Buyer to initiate the processes required to obtain the Key Gaming Approvals.

4.5 Acquisition Proposals.

4.5.1 The Company and Sellers shall not, nor shall they permit or authorize any of their respective Representatives to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate (including by way of furnishing confidential information) any inquiries or the making of any proposal or offer, with respect to (i) any merger, reorganization, share exchange, business combination, recapitalization, consolidation, liquidation, dissolution or similar transaction involving the Company, (ii) any sale, lease, exchange, mortgage, pledge, transfer or purchase of a significant portion of the Assets or any Asset material to the Business (other than the sale of Inventory in the Ordinary Course of Business) or Equity Securities of the Company, (iii) any purchase or sale of, or tender offer or exchange offer for Shares or any other Equity Securities of the Company (any such proposal or offer being hereinafter referred to as an “Acquisition Proposal”). The Company and Sellers shall not, nor shall they permit or authorize any of their respective Representatives to, directly or indirectly, (a) engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions or conversations with, any Person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement or accept an Acquisition Proposal, or (b) enter into any letter of intent or similar document contemplating, or enter into any agreement with respect to, an Acquisition Proposal. Without limiting the foregoing, it is agreed that any violation of the restrictions set forth in this paragraph by any Representative acting on behalf of the Company and/or any Seller shall be deemed a breach of this Section 4.5 by the Company and the Sellers.

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4.5.2 The Company and Sellers will promptly (and in any event within two (2) Business Days) notify Buyer in writing of the existence of any proposal, discussion, negotiation or inquiry received by the Company, any Seller or any of their respective Representatives with respect to any Acquisition Proposal, and the Company and Sellers will promptly communicate to Buyer the terms of any proposal, discussion, negotiation or inquiry which it or they may receive (including a copy of any such proposal) and the identity of the Person making such proposal or inquiry or engaging in such discussion or negotiation.

4.5.3 The Company and Sellers will, and will cause their respective Representatives to, immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person(s) conducted heretofore with respect to any Acquisition Proposal. In addition, the Company shall promptly request that each Person who has heretofore received information in connection with such Person’s consideration of an Acquisition Proposal return or destroy all confidential information heretofore furnished to such Person by or on behalf of the Company or any Seller. The Company shall not release any third party from, or waive any provision of, any confidentiality or standstill agreement to which the Company is a party. The Company and Sellers agree that they will take the necessary steps to promptly inform their respective Representatives of the obligations undertaken by the Company and Sellers in this Section 4.5.

4.6 Bank Accounts; Powers of Attorney. As of the Closing, at Buyer’s request, Sellers and the Company shall cause Buyer’s designees to be added, and the Company’s respective designees to be removed, as signatories with respect to each of the Company’s bank accounts and to terminate any powers of attorney in respect of such accounts, in each case, to become effective upon the consummation of the Contemplated Transactions.

4.7 Notice and Cure. During the Pre-Closing Period, the Company and Sellers will notify Buyer in writing (where appropriate and only with respect to matters occurring after the date hereof, through updates to the Disclosure Schedules) of, and contemporaneously will provide Buyer with and upload to the Data Room true, correct and complete copies of any and all information or documents relating to, and will cure before the Closing, any event, transaction or circumstance, that existed or occurred on, prior to or after the date of this Agreement, as soon as practicable after it becomes known to the Company or any Seller, that causes or will cause any representation, warranty, covenant or agreement of the Company and/or Sellers under this Agreement to be breached, that renders or will render untrue any representation or warranty of the Company and/or Sellers contained in this Agreement as if the same were made on or as of the date of such event, transaction or circumstance, or that make the timely satisfaction of any condition to Closing impossible or unlikely. No notice (or updates to Disclosure Schedules) given pursuant to this Section 4.7 shall have any effect on the representations, warranties or agreements contained in this Agreement for purposes of determining satisfaction of any condition, whether a breach or default has occurred, or the termination or indemnification rights of the parties provided by this Agreement or otherwise.

4.8 Consultation. During the Pre-Closing Period, subject to compliance with applicable Law, the Company will consult with management of Buyer with a view to informing them as to the operation and management of the Company.

4.9 Interim Financial Statements. During the Pre-Closing Period, Sellers and the Company shall provide Buyer, within 10 days after the end of each calendar month, the unaudited balance sheet, income statement and statement of cash flows as of the end of, or for, such month as applicable, for the

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Company, and (ii) within 10 days after the end of each fiscal quarter, the unaudited balance sheet and the unaudited statements of income and of cash flow for such fiscal quarter for the Company (in each case of clauses (i) and (ii) prepared in accordance with GAAP and consistent with the preparation of the Financial Statements). Upon delivery of the foregoing financial statements to Buyer, the representation set forth in Section 2.6 shall be deemed to have been made as to such financial statements as of the date of this Agreement.

4.10 Termination of Phantom Stock Plan. Prior to the Closing Date, the Company shall, and Sellers shall cause the Company and its board of directors to, take all necessary action to effectuate the termination of all phantom stock awards (“Phantom Stock Awards”) outstanding under that certain Diamond Game Enterprises, Inc. Phantom Stock Plan (the “Phantom Stock Plan”), whether or not such Phantom Stock Awards are exercisable and whether or not vested (including any portion that may become vested or exercisable as a result of the Contemplated Transactions), and, following such termination, the holders of such Phantom Stock Awards shall no longer have any right with respect thereto. Prior to the Closing Date, the Company shall, and Sellers shall cause the Company and its board of directors to, take all actions necessary to terminate the Phantom Stock Plan, effective as of the Closing Date, such that, on the Closing Date, the Phantom Stock Plan shall terminate in full, and shall no longer have any force or effect.

4.11 Termination of Breslo Incentive Plan; Payment of Liability Thereunder. Prior to the Closing Date, the Company shall, and Sellers shall cause the Company and its board of directors to, take all necessary action to effectuate the termination of the Breslo Incentive Plan, effective as of the Closing Date, such that, on the Closing Date, the Breslo Incentive Plan shall terminate in full and shall no longer have any force or effect. Sellers agree that all amounts owing to Bill Breslo under the Breslo Incentive Plan (the “Breslo Incentive Payment”) shall be advanced by Buyer to the Company such that the Company shall pay the Breslo Incentive Payment less any applicable withholding Tax directly to Bill Breslo at Closing out of the Closing Date Purchase Price otherwise payable to Sellers, ratably as set forth on Schedule 1.2, and Sellers hereby authorize Buyer and the Company to make such advance and payment, respectively, on the Closing Date. Sellers shall obtain from Bill Breslo a complete and unconditional release of the Company, in form and substance reasonably satisfactory to Buyer, executed by Bill Breslo in favor of the Company, in respect of any and all claims or Liabilities arising out of, or related to, the Breslo Incentive Plan (the “Breslo Incentive Plan Release”).

4.12 Termination of Breslo Employment Agreement. Effective at Closing, that certain employment agreement, dated as of December 31, 2004, by and between Breslo and the Company, shall terminate and shall be of no further force or effect. For the avoidance of doubt, following Closing, other than any accrued and unpaid salary due thereunder, Breslo shall not be entitled to any other payments pursuant to the terms of such agreement.

4.13 Withdrawal of Licensing. Promptly following Buyer’s written request, the Company shall, and Sellers shall cause the Company to, withdraw all or a portion of its operations and relinquish or surrender any approval, license or Permit, all as may be required by Buyer in such written request, from any jurisdiction from which approval or consent would be required to consummate the Contemplated Transactions, and which consent is set forth on Schedule 2.4 or Schedule 6.10 (the “Withdrawn Consents”); provided, however, that the Company’s and Sellers’ obligation to comply with the preceding sentence shall be subject to the prior satisfaction or waiver of all conditions to Closing contained in Section 6 (other than delivery of items to be delivered at the Closing, satisfaction of those conditions that by their nature are to be satisfied at the Closing and the receipt of the Withdrawn Consents, which would otherwise be required to satisfy the condition contained in Section 6.9 or Section 6.10).

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4.14 Distribution of Phone Card Business Assets and Liabilities; Payment of Equalizing Dividend. Immediately prior to Closing, the Company shall declare and pay a dividend to Sellers in respect of their respective Shares, which dividend shall, in respect of the dividend payable to Johnson, comprise all of the Phone Card Business Assets and Liabilities (the “Phone Card Business Dividend”) and, in respect of the dividend payable to Breslo, comprise cash in an amount not to exceed $150,000, which amount will equal 33% of the net amount of the Phone Card Business Dividend (the “Equalizing Dividend”). Sellers acknowledge and agree that the Company’s distribution of the Phone Card Business Dividend and the Equalizing Dividend, taken together, is a pro rata distribution to the Sellers in respect of their respective Shares.

4.15 Canadian Acquisition. Notwithstanding anything to the contrary contained herein, at Closing, Amaya may elect to cause a direct or indirect Canadian Subsidiary of Amaya (the “Canadian Affiliate”) to acquire from the Company all of the issued and outstanding common shares, no par value, of Diamond Game Enterprises Canada ULC (the “Canadian Shares”), a company formed under the British Columbia Business Corporations Act and which is a wholly owned subsidiary of the Company (the “Canadian Direct Purchase Election”); provided, however, that if Amaya effects the Canadian Direct Purchase Election and the aggregate Tax Liability of the Company and the Sellers resulting from the Contemplated Transactions is greater than would have otherwise been the case if Amaya had not effected the Canadian Direct Purchase Election (such difference, the “Excess”), then Buyer shall indemnify Sellers for the Excess pursuant to Section 9.2.3. If Amaya elects to effect the Canadian Direct Purchase Election by delivering written notice thereof to the Sellers’ Representative, then, at Closing, the Company agrees to sell, transfer and deliver to the Canadian Affiliate, and the Canadian Affiliate will purchase from the Company, the Canadian Shares, free and clear of any and all Encumbrances, other than restrictions on the transfer of securities arising under federal and state securities Laws and Encumbrances created by Buyer. The parties acknowledge and agree that the value of, and the consideration for, the Canadian Shares is subsumed in the Purchase Price. The parties shall agree in writing to the allocation of the Purchase Price among the Shares and the Canadian Shares on or prior to the Closing Date. The parties further agree to execute and file all of their respective Tax Returns and prepare all of their respective financial statements and other instruments in a manner consistent with such allocation.

5.	POST-CLOSING COVENANTS.

5.1 Confidentiality.

5.1.1 Each Seller acknowledges that the success of the Company after the Closing Date depends upon the continued preservation of the confidentiality of certain information possessed by such Seller, that the preservation of the confidentiality of such information by such Seller is an essential premise of the bargain between such Seller and Buyer, and that Buyer would be unwilling to enter into this Agreement in the absence of this Section 5.1.1. Accordingly, each Seller hereby agrees with Buyer that such Seller and its Representatives will not, and that such Seller will cause its Affiliates not to, at any time on or after the Closing Date, directly or indirectly, without the prior written consent of Buyer, disclose or use, any confidential or proprietary information involving or relating to the Business or the Company, including, but not limited to, (1) customer and supplier information, including lists of names and addresses of customers and suppliers of the Company or its Affiliates, (2) business plans and strategies, compensation plans, compensation information, sales plans and strategies, pricing and other terms applicable to transactions between existing and prospective customers, suppliers or business associates, (3) market research and databases, sources of leads and methods of obtaining new business, and methods of purchasing, marketing, selling, performing and pricing products and services employed by the Company, (4) information concerning the configuration and architecture, technical data, networks, methods, practices, standards and capacities of the Company’s information systems, Company Software and Company Technology, (5) information identified as confidential and/or proprietary in internal

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documents of the Company and (6) all information that would be a trade secret under any applicable Law; provided, however, that the information subject to the foregoing provisions of this sentence will not include any information generally available to, or known by, the public (other than as a result of disclosure in violation hereof); and provided, further, that the provisions of this Section 5.1.1 will not prohibit any retention of copies of records or disclosure (a) required by any applicable Legal Requirement so long as reasonable prior notice is given to Buyer of such retention and disclosure and a reasonable opportunity is afforded to Buyer to contest the same or (b) made in connection with the enforcement of any right or remedy relating to, or the performance of any obligation arising under, this Agreement or the Contemplated Transactions.

5.1.2 Prior to and following the Closing Date, each Seller hereby agrees that such Seller will, and that such Seller will cause its Affiliates and Representatives to, hold in strict confidence all, and not divulge or disclose, or buy or sell any Buyer securities while in possession of, any material non-public information of any kind concerning Buyer and its direct and indirect Subsidiaries, taken and a whole.

5.2 Restrictive Covenants.

5.2.1 Noncompetition. Each Seller on his or its own behalf and on behalf of each of his or its Affiliates, covenants that from the Closing Date through the three (3)-year anniversary of the Closing Date (the “Restricted Period”), neither he or it nor his or its Affiliates will for his, its or their own account or jointly with another, directly or indirectly, for or on behalf of any Person, as principal, agent or otherwise:

(a) (A) own, manage or control, or become engaged or serve as a shareholder, bondholder, creditor, officer, director, partner, member, employee, agent, consultant, advisor, contractor with, employer or representative of, or in any similar capacity, or (B) give financial, technical or other assistance to, otherwise invest or have a financial interest in, or in exchange for compensation otherwise associate with any Person, business or enterprise that competes directly or indirectly with the Company or the Business (a “Competitive Business”) anywhere within North America (the “Territory”); provided, however, that each Seller and its Affiliates may passively hold up to two percent (2%) of the outstanding publicly traded securities of a Person engaged in a Competitive Business for investment purposes only;

(b) recruit, induce, solicit for employment, or employ, or in any manner attempt to recruit, induce, solicit or employ, any person employed by the Company as of the Closing Date, whether or not such employment is pursuant to a written contract and whether or not such employment is at will;

(c) solicit, contact or deal with: (i) any Person that is at such time, or at any time during the two (2)-year period preceding the Closing Date was, a customer, supplier or business associate of the Company, or (ii) any Person from whom the Company solicited business or with whom the Company discussed a potential business relationship at any time during the two (2)-year period preceding the Closing Date, in each case, for the purpose of offering or providing services or products which are competitive with services or products provided by the Company;

(d) cause or seek to cause to be terminated or adversely affected, any agreement or arrangement of any kind to which the Company is a party or from which it benefits; or

(e) seek to interfere with or adversely affect the ongoing relationships between the Company, on the one hand, and its suppliers, customers and professional and business contacts, on the other.

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Notwithstanding anything to the contrary contained in this Section 5.2.1, if, on or prior to the thirtieth (30^th) day immediately following the Closing Date, Breslo shall not have entered into a definitive employment or consulting agreement with Amaya, the Company or any of their respective Affiliates, then, solely with respect to Breslo: (i) with respect to Section 5.2.1(a), the Restricted Period shall be deemed to be the period commencing on the Closing Date and ending on the six (6)-month anniversary of the Closing Date (the “Limited Restricted Period”); (ii) following the Limited Restricted Period, Section 5.2.1(b) shall not prohibit generalized solicitations for employment that are not directed to any person employed by the Company as of the Closing Date, which are made by or on behalf of a third Person that is not an Affiliate of Breslo, and by which Person Breslo is then employed (an “Unaffiliated Breslo Employer”), nor, in such circumstances, shall Section 5.2.1(b) prohibit the hiring by such Unaffiliated Breslo Employer of any such persons who respond to such generalized solicitations; and (iii) following the Limited Restricted Period, Section 5.2.1(c) shall not prohibit any solicitation, contact or dealing otherwise prohibited by Section 5.2.1(c) if Breslo is, at the time of any such solicitation, contact or dealing, employed by an Unaffiliated Breslo Employer and any such solicitation, contact or dealing is made for or on behalf of such Unaffiliated Breslo Employer.

5.2.2 Acknowledgement. Each Seller acknowledges that the Company conducts business throughout the Territory. Accordingly, each Seller agrees that the Territory is reasonable to protect the legitimate business interests of Buyer. Each Seller agrees that any reduction to the Territory would seriously undermine the efficacy of this Section 5.2 and the protections that it is intended to provide. Each Seller acknowledges and agrees that the covenants contained in this Section 5.2 are essential elements of this Agreement and that but for these covenants Buyer would not have agreed to purchase the Shares. Each Seller further expressly agrees and acknowledges that (a) the confidentiality, nonsolicitation and non-competition covenants contained in this Agreement (i) are reasonable and necessary for the protection of Buyer with respect to the covenants’ respective stated purposes, time, scope and geographic area; (ii) are necessary for the protection of Buyer’s legitimate business interests, including the trade secrets, goodwill, and relationships with customers and suppliers purchased by Buyer pursuant to this Agreement; (iii) have been granted to maintain or preserve the value of the Shares acquired by the Buyer hereunder; and (iv) are not unduly restrictive of any rights of Sellers; and (b) each Seller has sufficient employment alternatives and sufficient assets, taking into account the Purchase Price received and to be received by such Seller, such that such Seller does not have to compete with the Company or impermissibly use the Company’s confidential, proprietary, trade secret information described in this Agreement during the term of this Section 5.2 in order to earn a living. The existence of any claim or cause of action against Buyer by any Seller, whether predicated on Buyer’s breach of this Agreement or otherwise, shall not constitute a defense to the enforcement by Buyer of the covenants contained in this Section 5.2.

5.2.3 Injunction. Sellers agree that a violation of the terms, provisions, covered obligations, duties and conditions described in this Agreement will cause irreparable damage to Buyer for which money damages or other legal remedies would not be an adequate remedy. Accordingly, Sellers acknowledge and hereby agree that in the event of any breach or threatened breach by any Seller of any of such Seller’s covenants or obligations set forth in this Section 5.2, Buyer shall be entitled, in any court in the United States or otherwise having jurisdiction, to an injunction or injunctions, without the posting of any bond, to prevent or restrain breaches or threatened breaches of this Section 5.2, and to specifically enforce the terms and provisions of this Section 5.2 to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of this Section 5.2. Each Seller hereby agrees not to raise any objections to the availability of the equitable remedy of specific

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performance to prevent or restrain breaches or threatened breaches of this Section 5.2, and to specifically enforce the terms and provisions of this Section 5.2 to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of each Seller under this Section 5.2. Sellers further agree that (x) by seeking the remedies provided for in this Section 5.2.3, Buyer shall not in any respect waive its right to seek any other form of relief that may be available under this Agreement (including monetary damages), and (y) nothing set forth in this Section 5.2.3 shall require Buyer to institute any Action for (or limit Buyer’s right to institute any Action for) specific performance under this Section 5.2.3 prior or as a condition to exercising any rights under Section 9 or otherwise, nor shall the commencement of any Action pursuant to this Section 5.2.3 or anything set forth in this Section 5.2.3 restrict or limit any party’s right to pursue any other remedies under this Agreement that may be available to Buyer thereafter.

5.2.4 Severability. In the event that any provision of this Section 5 shall be held to be invalid or unenforceable for any reason whatsoever, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions hereof shall remain in full force and effect, to the extent permitted by Law, and any court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable and enforceable. All parties hereto hereby agree that each and every restrictive covenant as set forth in Section 5.1 and Section 5.2 is a separate and distinct restrictive covenant, designated to operate under different factual circumstances, and that the invalidity of one of said covenants shall not affect the validity and/or enforceability of the other covenants.

5.2.5 Allocation of Purchase Price Has No Effect. The parties acknowledge and agree that no portion of the Purchase Price payable to Sellers is attributable to the covenants set forth in this Section 5.2, which have been granted to maintain the fair market value of the Shares. Notwithstanding the foregoing, each Seller acknowledges that Buyer would not have entered into the Contemplated Transactions without the covenants set forth in Section 5.2; and if any covenant set forth in this Section 5.2 is breached by any Seller, each Seller acknowledges and agrees that the fact that no portion of the Purchase Price is attributable to these non-competition covenants shall not be deemed to be a measure of the damages that would result from such a breach, and each Seller agrees that at no time shall he or it argue or in any way assert in any Action that such consideration is a measure of the damages resulting from such breach.

6.	CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE.

Buyer’s obligation to purchase the Shares and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part):

6.1 Accuracy of Representations and Warranties. The representations and warranties of Sellers and the Company contained in this Agreement that are qualified by a reference to materiality, a Material Adverse Effect or any similar qualifier (any such qualification referred to herein as a “Materiality Qualifier”) shall be true and correct in all respects as written (including the Materiality Qualifier) when made and (without giving effect to any schedule updates permitted under Section 4.7) on and as of the Closing Date as if made at and as of the Closing Date (other than representations and warranties that are qualified by a reference to a Materiality Qualifier which address matters only as of a certain date, which shall have been true and correct as written (including the Materiality Qualifier) as of such certain date) and the representations and warranties of Sellers and the Company set forth in this Agreement that are not qualified by a Materiality Qualifier shall be true and correct in all material respects when made and (without giving effect to any schedule updates permitted under Section 4.7) on and as of the Closing Date as if made on and as of such time (except for those representations and warranties that are not so qualified and relate to a particular date, which representations and warranties shall be true and correct in all material respects as of such date).

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6.2 Sellers’ and the Company’s Performance.

6.2.1 Covenants. All of the covenants and obligations that Sellers and/or the Company are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.

6.2.2 Documents. Each document required to be delivered by Sellers pursuant to Section 1.6.2(a) must have been delivered.

6.3 No Actions. Since the date of this Agreement, there must not have been commenced or threatened against Buyer, the Company or Sellers or against any Person affiliated with Buyer, the Company or Sellers, any Action (a) involving any challenge to, or seeking material damages or other material relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, restraining, making illegal, or otherwise materially interfering with any of the Contemplated Transactions.

6.4 No Claim Regarding Shares or Sale Proceeds. There must not have been made or threatened by any Person any claim asserting that such Person (a) is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any Shares or any other Equity Securities of the Company, or (b) is entitled to all or any portion of the Purchase Price payable for the Shares.

6.5 No Prohibition. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered into any Law or Governmental Order and no other legal or regulatory restraint or prohibition shall be in effect, in either case, which has the effect of making the Contemplated Transactions illegal or that otherwise prohibits or requires the payment of any damages as a result of the Contemplated Transactions, and no Action in which any of the foregoing is sought shall be pending.

6.6 No Material Adverse Effect. Since the date of this Agreement, no Material Adverse Effect shall have occurred.

6.7 Third-Party Consents. The Company shall have received and delivered to Buyer the third-party consents listed on Schedule 2.5.

6.8 Withdrawals. Any withdrawal required pursuant to Section 4.13 shall have been effected.

6.9 Gaming Approvals. Buyer shall have received all Gaming Approvals listed on Schedule 2.4, except with respect to any Withdrawn Consents.

6.10 Key Gaming Approvals. Buyer shall have received the Gaming Approvals listed on Schedule 6.10 (the “Key Gaming Approvals”), except with respect to any Withdrawn Consents.

6.11 Payment of Dividends. The Company shall have declared and paid the Phone Card Business Dividend and the Equalizing Dividend.

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7.	CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE.

Sellers’ obligations to sell the Shares and to take the other actions required to be taken by Sellers at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Sellers’ Representative, in whole or in part):

7.1 Accuracy of Representations and Warranties. The representations and warranties of Buyer contained in this Agreement that are qualified by a reference to a Materiality Qualifier shall be true and correct in all respects when made as written (including the Materiality Qualifier) and (without giving effect to any schedule updates) on and as of the Closing as if made at and as of the Closing (other than representations and warranties that are qualified by a reference to a Materiality Qualifier which address matters only as of a certain date, which shall have been true and correct as written (including the Materiality Qualifier) as of such certain date), and the representations and warranties of Buyer set forth in this Agreement that are not qualified by a Materiality Qualifier shall be true and correct in all material respects when made and (without giving effect to any schedule updates) on and as of the Closing Date as if made on and as of such time (except for those representations and warranties that are not so qualified and relate to a particular date, which representations and warranties shall be true and correct in all material respects as of such date).

7.2 Buyer’s Performance.

7.2.1 Covenants. All of the covenants and obligations that Buyer is required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.

7.2.2 Documents. Buyer must have delivered each of the documents required to be delivered by Buyer pursuant to Section 1.6.2(b) and must be prepared to make the cash payments required to be made by Buyer pursuant hereto.

7.3 No Prohibition. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered into any Law or Governmental Order and no other legal or regulatory restraint or prohibition shall be in effect, in either case, which has the effect of making the Contemplated Transactions illegal or that otherwise prohibits or requires the payment of any damages as a result of the Contemplated Transactions, and no Action in which any of the foregoing is sought shall be pending.

7.4 No Actions. Since the date of this Agreement, there must not have been commenced or threatened against Buyer, the Company or Sellers or against any Person affiliated with Buyer, the Company or Sellers, any Action (a) involving any challenge to, or seeking material damages or other material relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, restraining, making illegal, or otherwise materially interfering with any of the Contemplated Transactions.

8.	TERMINATION.

8.1 Termination Events. This Agreement may, by written notice given prior to or at the Closing, be terminated:

8.1.1 By mutual written consent of Buyer and Sellers’ Representative;

8.1.2 on or after December 31, 2013, by either Sellers’ Representative or Buyer if the Closing has not occurred on or before such date; provided, that the terminating party shall

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give the other party not less than two (2) Business Days’ notice of its intent to terminate this Agreement pursuant to this Section 8.1.2 and within such two (2) Business Day period will discuss with the other party or parties the basis upon which such notice was given and shall explore possible alternatives; provided, however, that the decision to terminate shall rest solely in the discretion of the notifying party; and provided, further that (i) the right to terminate this Agreement pursuant to this Section 8.1.2 shall not be available to a party that is then in breach in any material respect of any representation, warranty, covenant, agreement or obligation contained in this Agreement and (ii) Sellers’ Representative’s right to terminate this Agreement pursuant to this Section 8.1.2 shall not be available if Closing shall not have occurred on or prior to November 30, 2013 solely because the condition contained in Section 6.10 shall not have been satisfied or waived on or prior to such date, except that Sellers’ Representative may terminate this Agreement pursuant to this Section 8.1.2 (subject to the proviso set forth in the immediately preceding clause (i)) if (y) Closing shall not have occurred on or prior to February 28, 2014 or (z) a Gaming Authority shall have determined, in a writing delivered to Buyer, not to issue a Key Gaming Approval to Buyer, and on or prior to the fifth (5^th) Business Day following Buyer’s receipt of such determination, Buyer shall not have delivered to Sellers’ Representatives a request for a Withdrawn Consent with respect to such Key Gaming Approval (provided, that, Sellers’ Representative may not terminate this Agreement pursuant to this clause (z) if Buyer uses its commercially reasonable efforts to challenge such determination, unless and until such time as such determination is subsequently upheld pursuant to the entry of a final, binding and non-appealable order issued, made or rendered by a court of competent jurisdiction);

8.1.3 by Sellers’ Representative, upon written notice, if (i) one or more of the representations and warranties of Buyer shall have become untrue such that the condition set forth in Section 7.1 would not be satisfied, (ii) Buyer shall have breached any agreement, obligation or covenant such that the condition set forth in Section 7.2 would not be satisfied, or (iii) all of the conditions set forth in Section 6 are satisfied (excluding conditions that, by their terms, cannot be satisfied until the Closing, but which would be reasonably capable of being satisfied at Closing) and Buyer fails to satisfy its obligations to be carried out at Closing under Section 1; provided, that in the case of (i) or (ii) if the inaccuracy in Buyer’s representations and warranties or the breach of Buyer’s agreement, obligation or covenant is curable through the exercise of Buyer’s commercially reasonable efforts, then Sellers’ Representative may not terminate this Agreement for thirty (30) days after Sellers’ Representative shall have given written notice of such inaccuracy or breach to Buyer (so long as Buyer continues to use commercially reasonable efforts to cure the inaccuracy or breach during such period), it being understood that Sellers’ Representative may not terminate this Agreement if Buyer cures such inaccuracy or breach within such thirty (30) day period;

8.1.4 by Buyer, upon written notice to Sellers’ Representative, if (i) one or more of the representations and warranties of Sellers and/or the Company shall have become untrue such that the condition set forth in Section 6.1 would not be satisfied, (ii) Sellers or the Company shall have breached any agreement, obligation or covenant such that the condition set forth in Section 6.2 would not be satisfied, or (iii) all of the conditions set forth in Section 7 are satisfied (excluding conditions that, by their terms, cannot be satisfied until the Closing, but which would be reasonably capable of being satisfied at Closing) and Sellers and the Company fail to satisfy all of their obligations to be carried out at Closing under Section 1; or

8.1.5 by Buyer or Sellers if there shall be any Legal Requirement that makes consummation of the purchase of the Shares illegal or otherwise prohibited, or if any Governmental Order enjoining Buyer or Sellers from consummating the purchase of the Shares is entered and such order shall have become final and nonappealable; provided that the party seeking to terminate this Agreement pursuant to this provision shall have used all commercially reasonable efforts to remove or vacate such order.

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8.2 Effect of Termination. If this Agreement is terminated pursuant to Section 8.1, this Agreement shall forthwith become void and of no further force and effect, except for the provisions of this Section 8.2, Section 11 and Section 12, which shall survive such termination; provided, however, that nothing herein shall relieve any party from Liability for any breach of any representation, warranty, covenant or agreement contained in this Agreement.

9.	INDEMNIFICATION.

9.1 Indemnification by Sellers. Subject to the limitations set forth in this Section 9, from and after Closing, Sellers, jointly and severally, will indemnify and hold harmless Buyer and each of its Affiliates (including, following the Closing, the Company), and the Representatives and Affiliates of each of the foregoing Persons (each, a “Buyer Indemnified Person”), from, against and in respect of any and all Losses, whether or not involving a Third Party Claim, incurred or suffered by Buyer Indemnified Persons or any of them as a result of, arising out of or directly or indirectly relating to:

9.1.1 any breach of, or inaccuracy in, any representation or warranty made by Sellers and/or the Company in Section 2 or in any certificate delivered by the Company or Sellers at Closing or any other Company Agreement; or

9.1.2 any breach or violation of any covenant or agreement of Sellers and/or the Company to the extent required to be performed or complied with by Sellers (including under this Section 9) or the Company in or pursuant to this Agreement; provided that with respect to the Company, only to the extent required to be performed or complied with by the Company at or prior to Closing.

9.1.3 Sellers shall not be liable for the indemnification obligations pursuant to Section 9.1.1 or Section 10.3.1(c) until the aggregate amount of Losses with respect to matters referred to in Section 9.1.1 and Section 10.3.1(c) exceeds One Hundred Fifty Thousand Dollars ($150,000) (the “Deductible”), after which Sellers will be jointly and severally responsible for all Losses in excess of the Deductible up to a maximum aggregate amount of Losses equal to Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000) (the “Liability Cap”). Notwithstanding anything herein to the contrary, neither the Deductible nor the Liability Cap will apply (i) in the case of fraud, intentional misrepresentation or willful misconduct, (ii) with respect to any breach of Sections 2.1 (Organization and Predecessors), 2.2 (Capitalization and Title), 2.3 (Power and Authorization), 2.5(d) (Noncontravention), 2.10.1 (Ownership of Assets), 2.10.3 (Phone Card Business Assets and Liabilities), 2.17 (Employee Benefit Plans) or 2.28 (No Brokers), (iii) with respect to Sellers’ indemnification obligations pursuant to Section 9.1.2 or (iv) with respect to Sellers’ indemnification obligations pursuant to Section 10.

9.2 Indemnity by Buyer. Subject to the limitations set forth in this Section 9, from and after Closing, Buyer will indemnify and hold harmless Sellers and Sellers’ Affiliates, and the Representatives and Affiliates of each of the foregoing Persons (each, a “Seller Indemnified Person”), from, against and in respect of any and all Losses incurred or suffered by Seller Indemnified Persons or any of them as a result of, arising out of or relating to, directly or indirectly:

9.2.1 any breach of, or inaccuracy in, any representation or warranty made by Buyer in Section 3 or in any certificate delivered by Buyer at Closing;

9.2.2 any breach or violation of any covenant or agreement of Buyer (including under this Section 9) or any covenant or agreement of the Company to the extent required to be performed or complied with by the Company after the Closing Date, in either case in or pursuant to this Agreement; or

9.2.3 the Excess.

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9.3 Time for Certain Claims. No claim may be made or suit instituted seeking indemnification pursuant to Sections 9.1.1 or 9.2.1 for any breach of, or inaccuracy in, any representation or warranty unless a written notice describing such breach or inaccuracy in reasonable detail in light of the circumstances then known to the Indemnified Person, is provided to the Indemnifying Person:

9.3.1 at any time, in the case of any breach of, or inaccuracy in, the representations and warranties set forth in Sections 2.1 (Organization and Predecessors), 2.2 (Capitalization and Title), 2.3 (Power and Authorization), 2.5(d) (Noncontravention), 2.10.1 (Ownership of Assets), 2.28 (No Brokers), 3.1 (Organization), 3.2 (Power and Authorization) or 3.5 (No Brokers);

9.3.2 at any time, in the case of any claim or suit based upon fraud, intentional misrepresentation or willful misconduct;

9.3.3 at any time prior to the ninetieth (90^th) day after the expiration of the applicable statute of limitations (taking into account any tolling periods and other extensions) in the case of any breach of, or in accuracy in, the representations and warranties set forth in Section 2.17 (Employee Benefit Plans); and

9.3.4 at any time prior to last day of the eighteen (18) month anniversary following the Closing Date, in the case of any breach of, or inaccuracy in, any other representation and warranty described in Section 9.1.1 or 9.2.1; provided that if, at any time prior to the expiration of the respective survival period set forth in this Section 9.3 with respect to any particular representation or warranty, any Indemnified Person delivers to any Indemnifying Person a written notice alleging the existence of an inaccuracy in or a breach of such representation or warranty and asserting a claim for Losses pursuant to Section 9.1.1 or 9.2.1, then the representation or warranty underlying the claim asserted in such notice and all indemnity obligations under this Section 9 related thereto shall survive until such claim is finally and fully resolved in accordance with this Agreement.

Claims for indemnification pursuant to Section 10 are not subject to the limitations set forth in this Section 9.3.

9.4 Third Party Claims.

9.4.1 Notice of Claim. If any third party notifies an Indemnified Person with respect to any matter (a “Third Party Claim”) which may give rise to an Indemnified Claim against an Indemnifying Person under Section 9, then the Indemnified Person will promptly give written notice to the Indemnifying Person; provided, however, that no delay on the part of the Indemnified Person in notifying the Indemnifying Person will relieve the Indemnifying Person from any obligation this Section 9, except to the extent that the Indemnifying Person is actually prejudiced by the Indemnified Person’s failure to give such notice in such a timely manner.

9.4.2 Assumption of Defense, etc. The Indemnifying Person will be entitled to participate in the defense of any Third Party Claim that is the subject of a notice given by the Indemnified Person pursuant to Section 9.4.1. In addition, the Indemnifying Person will have the right to assume the defense of the Indemnified Person against the Third Party Claim with counsel satisfactory to the Indemnified Person so long as (a) the Indemnifying Person gives written notice to the Indemnified Person within fifteen days after the Indemnified Person has given notice of the Third Party Claim that the Indemnifying Person will indemnify the Indemnified Person from and against the entirety of any and all

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Losses the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (b) the Indemnifying Person provides the Indemnified Person with evidence reasonably acceptable to the Indemnified Person that the Indemnifying Person will have adequate financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (c) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Person, (d) the Indemnified Person has not been advised by counsel that an actual or potential conflict exists between the Indemnified Person and the Indemnifying Person in connection with the defense of the Third Party Claim, (e) the Third Party Claim does not relate to or otherwise arise in connection with Taxes (provided that with respect to Taxes, this Section 9.4.2 shall not affect Sellers’ right to defend any claim of a Governmental Authority as permitted by Section 10.3.3(b)) or any criminal or regulatory enforcement Action and (f) the Indemnifying Person conducts the defense of the Third Party Claim actively and diligently. The Indemnified Person may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; provided, however, that the Indemnifying Person will pay the reasonable fees and expenses of one separate co-counsel retained by the Indemnified Person that are incurred prior to the Indemnifying Person’s assumption of control of the defense of the Third Party Claim.

9.4.3 Limitations on Indemnifying Person. The Indemnifying Person will not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, conditioned or delayed, unless such judgment, compromise or settlement (a) provides for the payment by the Indemnifying Person of money as sole relief for the claimant, (b) results in the full and general release of all Buyer Indemnified Persons or Seller Indemnified Persons, as applicable, from all Liabilities arising or relating to, or in connection with, the Third Party Claim and (c) involves no finding or admission of any violation of Legal Requirements or the rights of any Person and has no effect on any other claims that may be made against the Indemnified Person.

9.4.4 Indemnified Person’s Control. If the Indemnifying Person does not deliver the notice contemplated by clause (a), or the evidence contemplated by clause (b), of Section 9.4.2 within 15 days after the Indemnified Person has given notice of the Third Party Claim, or otherwise at any time fails to conduct the defense of the Third Party Claim actively and diligently, the Indemnified Person may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim with the consent of the Indemnifying Person, which consent shall not be unreasonably withheld, conditioned or delayed. If such notice and evidence is given on a timely basis and the Indemnifying Person conducts the defense of the Third Party Claim actively and diligently but any of the other conditions in Section 9.4.2 is or becomes unsatisfied, the Indemnified Person may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim with the consent of the Indemnifying Person, which consent shall not be unreasonably delayed, conditioned or withheld. In the event that the Indemnified Person conducts the defense of the Third Party Claim pursuant to this Section 9.4.4, the Indemnifying Person will (a) advance the Indemnified Person promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses) and (b) remain responsible for any and all other Losses that the Indemnified Person may incur or suffer resulting from, arising out of, relating to, in the nature of or caused by the Third Party Claim to the fullest extent provided in this Section 9.

9.4.5 Reasonable Cooperation. The party not in control of the prosecution or defense of a Third Party Claim will reasonably cooperate with the other party in the conduct of the prosecution or defense of such Third Party Claim.

9.5 Sellers’ Representative. For the avoidance of doubt, for purposes of Section 9 or Section 10, it is understood and agreed that Sellers’ Representative shall act on behalf of all Sellers.

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9.6 Knowledge and Investigation. The right of any Buyer Indemnified Person or Seller Indemnified Person to indemnification pursuant to this Section 9 will not be affected by any investigation conducted or knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy of any representation or warranty, performance of or compliance with any covenant or agreement, referred to in Sections 9.1 or 9.2, or otherwise.

9.7 Company’s Indemnification Obligations. The obligation of the Company to indemnify Buyer and the other Buyer Indemnified Persons shall terminate in all respects upon the Closing; provided, that, for the avoidance of doubt, the parties agree that the termination of the Company’s indemnification obligations pursuant to this Section 9.7 shall have no affect on or in any way limit Buyer’s or any other Buyer Indemnified Person’s rights to indemnification from Sellers. In addition, Sellers’ rights to seek contribution or payment of any amount from the Company for any indemnification obligations that they are required to make to Buyer or any other Buyer Indemnified Person shall also terminate in all respects upon the Closing. If the Company suffers, incurs or otherwise becomes subject to any Losses as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Company or Sellers hereunder, then (without limiting any of the rights of the Company, Buyer or any other Buyer Indemnified Persons as Indemnified Persons) Buyer shall also be deemed, by virtue of its ownership of the Equity Securities of the Company, to have incurred Losses as a result of and in connection with such inaccuracy or breach but in any case the total amount both Buyer and the Company may recover shall not exceed the amount of Losses.

9.8 Time of Payment of Claims. Except as otherwise set forth in this Section 9, any amount owing by any Person pursuant to this Section 9 shall be paid within seven (7) Business Days after determination of such amount.

9.9 Insurance Reimbursement. The amount of any Losses for which indemnification is provided under this Section 9 shall be reduced by (i) the insurance proceeds actually recovered with respect to any such Losses and (ii) any other amount, if any, recovered from third parties (as a result of indemnification, contribution, guarantee or otherwise) by the Indemnified Person (or its Affiliates) with respect to any Losses less in the case of each of the immediately preceding clauses (i) and (ii) all reasonable costs (including attorneys’ fees) of the Indemnified Person to collect such proceeds and any increase in insurance premiums resulting from such recovery.

9.10 No Multiple Recovery. No Indemnified Person shall be entitled to recover from an Indemnifying Person more than once for any particular Loss, nor shall any Indemnifying Person be liable or otherwise obligated to indemnify any Indemnified Person for the same Loss more than once. If an Indemnifying Person pays to an Indemnified Person all amounts payable under this Agreement in respect of a particular Loss, and the Indemnified Person later recovers an amount for the same Loss pursuant to insurance proceeds or from a third party (as a result of indemnification, contribution, guarantee or otherwise), then the Indemnified Person shall promptly pay to the Indemnifying Person an amount equal to such later recovery (up to the dollar amount paid by the Indemnifying Person to the Indemnified Person in respect of such Loss), net of all reasonable costs (including attorneys’ fees) of the Indemnified Person to collect such proceeds and any increase in insurance premiums resulting from such recovery.

9.11 Purchase Price Adjustment. Payments received by any party pursuant to Section 9 or Section 10 shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes.

9.12 Exclusive Remedy. Following the Closing Date, (a) except for remedies that cannot be waived as a matter of law and injunctive (including, but not limited to, pursuant to Section 5.2.3), provisional and equitable relief (including specific performance) and (b) in the absence of fraud, knowing

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and intentional breach, intentional misrepresentation or willful misconduct (it being understood that nothing in this Agreement shall preclude a claim based on fraud, knowing and intentional breach, intentional misrepresentation or willful misconduct), the Buyer Indemnified Persons’ sole and exclusive remedy for any Losses arising out of or related to this Agreement will be indemnification pursuant to and subject to the limitations contained in Section 9 and Section 10.

9.13 Debt Reduction as Exclusive Remedy. Notwithstanding any other provision of this Agreement, in circumstances in which this Agreement is terminated (i) by Sellers’ Representative pursuant to Section 8.1.2 or Section 8.1.3 or (ii) by Buyer pursuant to Section 8.1.2, and the principal amount of the Loans (as defined in the Equipment Placement Draw Down Facility) is reduced by an amount equal to $1,000,000 (but in no event to an amount less than $0) in accordance with the terms of the Equipment Placement Draw Down Facility (the “Debt Reduction”), there shall be no further liability of any nature on the part of Buyer or any of its Affiliates arising out of or relating to this Agreement or the Contemplated Transactions. The parties acknowledge and agree that (i) the agreements contained in this Section 9.13 are an integral part of the Contemplated Transactions, and that without these agreements, the other parties hereto would not enter into this Agreement, (ii) any losses or damages resulting from the termination of this Agreement under circumstances where the Debt Reduction becomes effective are uncertain and incapable of accurate calculation and that the Debt Reduction is not a penalty, but rather liquidated damages in a reasonable amount that will compensate Sellers in circumstances in which the Debt Reduction becomes effective for the efforts and resources expended and opportunities foregone while negotiating this Agreement and the Equipment Placement Draw Down Facility and in reliance on this Agreement, the Equipment Placement Draw Down Facility and the consummation of the Contemplated Transactions and (iii) the Debt Reduction is intended to be Sellers’ sole and exclusive remedy in circumstances in which the Debt Reduction becomes effective.

9.14 Efforts to Join Sellers. If Buyer commences any Action against a Seller in order to enforce the indemnification provisions contained in Section 9 or Section 10, then Buyer shall use commercially reasonable efforts to join the other Seller to such Action if such Seller was not originally a party to such Action.

10.	TAX MATTERS.

10.1 Representations and Obligations Regarding Taxes. The Company and Sellers jointly and severally represent and warrant to and agree with Buyer as follows, in each case except to the extent set forth on Schedule 10 (for purposes of this Section 10, the term “Company” shall mean the Company, together with the Company Subsidiaries):

10.1.1 The Company has duly and timely filed all Tax Returns it was required to file. All of those Tax Returns were true, correct and complete in all material respects. All material elections with respect to Taxes affecting the Company are disclosed on or attached to a Tax Return of the Company.

10.1.2 All Taxes of the Company (whether or not shown on any Tax Return and whether or not any Tax Return was required) have been timely paid. The Company is not the beneficiary of any extension of time within which to file any Tax Return. The Company has maintained adequate provision for Taxes (excluding amounts deferred to take into account timing differences between book and tax) payable by the Company as of the Closing Date.

10.1.3 No claim has ever been made by a Governmental Authority in a jurisdiction where the Company does not currently file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. There are no Liens on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax, except for Liens for Taxes not yet due.

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10.1.4 There is no dispute or claim concerning any Tax Liability of the Company either (A) claimed or raised by any Governmental Authority in writing or (B) to Sellers’ Knowledge based upon personal contact with any agent of any Governmental Authority. The Company has not received from any Governmental Authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other similar notice which Taxes have not been satisfied by payment or been withdrawn, and no claims have been asserted relating to such Taxes against the Company. To Sellers’ Knowledge, no taxing authority will assert liability for any additional Taxes for any period for which Tax Returns have been filed.

10.1.5 No Tax Return has been audited, or is currently the subject of audit. Sellers have made available in the Data Room true, correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by the Company since its formation. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency. There is no power of attorney with respect to any Tax executed or filed with any Governmental Authority.

10.1.6 The Company is not a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for Federal income tax purposes. The Company has not been a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free or partly tax-free treatment under Section 355 of the Code. The Company has not entered into any sale leaseback or leveraged lease transaction that fails to satisfy the requirements of Revenue Procedure 75-21 or Revenue Procedure 2001-28 (or similar provisions of foreign law) or any safe harbor lease transaction. The Company has not acquired nor does it own any assets that directly or indirectly secure any debt the interest on which is tax exempt under Section 103 of the Code. No indebtedness of the Company consists of “corporate acquisition indebtedness” within the meaning of section 279 of the Code. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury regulation section 1.62-2(c).

10.1.7 The Company shall not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued prior to the Closing Date but was not recognized on or before the Closing Date as a result of the an open transaction disposition, the installment, long-term contract or completed contract method of accounting, the cash method of accounting, any change in the Company’s method of accounting, including by reason of Section 481 of the Code, or any comparable provision of state, local, or foreign tax law. The Company has not entered into any closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) (or any similar or corresponding provision of any state, local or non-U.S. Law).

10.1.8 The Company has properly disclosed on its U.S. Federal Income Tax Returns all positions taken thereon that could give rise to a substantial understatement of U.S. Federal income Tax within the meaning of Section 6662 of the Code. The Company has not consummated or participated in, and is not currently participating in, (i) any transaction that was or is a “tax shelter” transaction as defined in Section 6662 of the Code (or the Treasury Regulations promulgated thereunder) or (ii) any transaction that was or is a “listed transaction” or “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code or Treasury Regulations Section 1.6011-4(b).

10.1.9 The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts allocable, paid or owing to any employee, independent contractor, creditor, stockholder, member, partner, foreign person or other third party. The Company does not have a non-accountable expense reimbursement arrangement within the meaning of Treasury Regulation Section 1.62-2(c).

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10.1.10 The Company has been a validly electing S corporation (within the meaning of sections 1361 and 1362 of the Code) at all times during its existence. The Company has not, in the past ten years, acquired any assets from another corporation in a transaction in which the Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor.

10.1.11 The Company is not a party to any Tax allocation or sharing agreement. The Company (i) has not been a member of an Affiliated Group filing a consolidated Federal income Tax Return and (ii) has no liability for the Taxes of any Person under Treasury regulation section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise.

10.1.12 Neither Seller is a foreign person within the meaning of Section 1445 of the Code. The Company does not have, and has not had, a permanent establishment in any foreign country, as defined in any applicable income tax treaty to which the United States and the foreign country are parties or under the law of the foreign country. The Company does not have an overall foreign loss within the meaning of section 904(f) of the Code. The Company does not own, and has not at any time owned, an interest in a foreign company.

10.1.13 All private letter rulings issued by the Internal Revenue Service to the Company (and any corresponding ruling or determination of any state, local or foreign Governmental Authority) have been disclosed on Schedule 10, and there are no pending requests for any rulings (or corresponding determinations).

10.1.14 The Company is not a successor to any other company, and the Company has never owned any stock in any other corporation. For U.S. Federal income tax purposes, Diamond Game Enterprises Canada ULC is a disregarded entity within the meaning of Treasury regulations sections 301.7701-2 and -3, and no election has been made to classify Diamond Game Enterprises Canada ULC otherwise.

10.2 Covenants With Respect To Taxes.

10.2.1 Buyer shall (i) grant to Sellers’ Representative reasonable access to the Company’s books and records (including Tax workpapers and returns and correspondence with Tax authorities), including the right to take extracts therefrom and make copies thereof, to the extent that the books and records relate to the operations of the Company during taxable periods ending on or prior to or that include the Closing Date as may be necessary for Tax Return preparation, audit, or other financial reporting matters, and (ii) otherwise reasonably cooperate with Sellers’ Representative in connection with any audit of Taxes that relates to the Business prior to Closing, in each case to the extent relevant to Sellers’ indemnification obligations under Section 10.3.

10.2.2 Buyer shall be responsible for preparing and filing, or causing the Company to prepare and file, all Tax Returns of the Company required to be filed for taxable periods ending after the Closing Date, and Sellers shall be responsible, at their cost, for filing all Tax Returns of the Company for taxable periods ending on or before the Closing Date (“Seller-Prepared Returns”). Sellers shall furnish such Seller-Prepared Returns to Buyer for its review, comment and approval (such approval not to be unreasonably withheld, conditioned or delayed) at least 20 days prior to the due date (or extended due date) for filing such Tax Returns (seven (7) days with respect to Tax Returns that are required to be filed monthly), and such Tax Returns shall be prepared in accordance with past practice,

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except as required by Law. Sellers shall pay all Taxes required to be paid with respect to Seller-Prepared Returns, except to the extent such Taxes have been previously paid, deposited or accrued in Actual Net Working Capital on the Actual Closing Balance Sheet. In the case of any Tax Returns (a “Straddle Return”) for taxable periods which begin before the Closing Date and end after the Closing Date (a “Straddle Period”), Buyer shall furnish such Tax Returns to Seller’s Representative for its review, comment and approval (such approval not to be unreasonably withheld, conditioned or delayed) at least 30 days prior to the due date (or extended due date) for filing such Tax Returns, and such Tax Returns shall be prepared in accordance with past practice, except as required by Law. Sellers shall jointly and severally pay to Buyer within five (5) days after the date on which Taxes are paid with respect to a Straddle Return approved by Sellers’ Representative, or as to which the refusal of Sellers’ Representative to approve is unreasonable, an amount equal to the portion of those Taxes that relates to the portion of the taxable period ending on the Closing Date, reduced by the amount of the accrual for those Taxes in Actual Net Working Capital on the Actual Closing Balance Sheet.

10.2.3 Section 338(h)(10) Election. At the option of Buyer, Sellers and Buyer shall jointly make an election under Section 338(h)(10) of the Code, and corresponding provisions of state and local Law elected by Buyer, in connection with the sale and purchase of the Shares. Buyer shall provide to Sellers all Tax forms and other documents required by Sellers in connection with the preparation, execution and filing of the Section 338(h)(10) elections, including a purchase price allocation schedule, which forms and documents Sellers shall execute on or before the Closing Date, and the Parties will do such other things necessary, including, but not limited to, making all necessary filings with Tax authorities, to accomplish the purposes of this Section 10.2.3. In connection with the Section 338(h)(10) elections, Buyer shall pay Sellers an amount sufficient so that, after the payment by Sellers of all Taxes in respect of that payment, the net amount realized by Sellers from Buyer in connection with the sale of the Shares, after the payment of all federal, state and local income and franchise taxes related thereto, is equal to the net amount after such Taxes Sellers would have realized from the sale of the Shares had the Section 338(h)(10) elections not been made.

10.3 Indemnification for Taxes. Notwithstanding anything to the contrary in this Agreement (in particular Section 9):

10.3.1 Sellers shall jointly and severally indemnify Buyer and its Affiliates, including, after the Closing, the Company (each herein sometimes referred to as an “Indemnified Taxpayer”) against, and agree to jointly and severally protect, save and hold harmless each Indemnified Taxpayer from, any and all claims, damages, deficiencies and losses and all reasonable expenses, including attorneys’, accountants’ and experts’ fees and disbursements (all herein referred to as “Tax Losses”), resulting from:

(a) (A) any Taxes of the Company or Sellers allocable to any period ending on or prior to the Closing Date or allocable to the portion of any Straddle Period ending on or prior to the Closing Date, and (B) a claim by any Governmental Authority for any Taxes of the Company or any corporation that is or was a member of an Affiliated Group of which the Company was or is a member, or any liability of any of the foregoing for the Taxes of any Person, whether as a transferee or successor, by contract or otherwise;

(b) a claim by any Governmental Authority for any Taxes arising from or occasioned by the sale of the Shares pursuant to this Agreement;

(d) any breach or violation of any covenant or agreement of Sellers in Section 10.2 (each of which shall be treated as omitting any Materiality Qualifier).

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10.3.2 Subject to the resolution of any Tax contest pursuant to Section 10.3.3, upon notice from Buyer to Sellers’ Representative that an Indemnified Taxpayer is entitled to an indemnification payment for a Tax Loss pursuant to Section 10.3.1, Sellers thereupon shall jointly and severally pay to the Indemnified Taxpayer an amount that, net of any Taxes imposed on the Indemnified Taxpayer with respect to the payment, will indemnify and hold the Indemnified Taxpayer harmless from the Tax Loss.

10.3.3 Tax Contests.

(a) If a claim shall be made by any Governmental Authority that, if successful, would result in the indemnification of an Indemnified Taxpayer, the Indemnified Taxpayer shall notify Sellers’ Representative in writing of that fact; provided, however, that any failure to give the notice will not waive any rights of the Indemnified Taxpayer.

(b) Sellers shall have the right to defend the Indemnified Taxpayer against the claim with counsel of its choice satisfactory to the Indemnified Taxpayer so long as (A) Sellers’ Representative notifies the Indemnified Taxpayer in writing within 15 days after the Indemnified Taxpayer has given notice of the claim that Sellers will jointly and severally indemnify the Indemnified Taxpayer from and against the entirety of any Tax Losses the Indemnified Taxpayer may suffer resulting from, arising out of, relating to, in the nature of, or caused by the claim, (B) Sellers’ Representative provides the Indemnified Taxpayer with evidence reasonably acceptable to the Indemnified Taxpayer that Sellers will have the financial resources to jointly and severally defend against the claim and fulfill their indemnification obligations hereunder, (C) if requested by the Indemnified Taxpayer, Sellers’ Representative provides to the Indemnified Taxpayer an opinion, in form and substance reasonably satisfactory to the Indemnified Taxpayer, of counsel satisfactory to the Indemnified Taxpayer, that there exists a reasonable basis for the relevant Company to prevail in that contest, (D) if the Indemnified Taxpayer is required or requested to pay the Tax claimed and sue for a refund, Sellers shall have jointly and severally advanced to the Indemnified Taxpayer, on an interest free basis, the full amount the Indemnified Taxpayer is required to pay, and (E) Sellers conduct the defense of the claim actively and diligently.

(c) Subject to the provisions of paragraph (b) above, Sellers shall be entitled to prosecute the contest to a determination in a court of initial jurisdiction, and if Sellers’ Representative shall reasonably request, to a determination in an appellate court; provided that, if requested by the Indemnified Taxpayer, Sellers’ Representative shall provide to the Indemnified Taxpayer an opinion, in form and substance reasonably satisfactory to the Indemnified Taxpayer, of counsel reasonably satisfactory to the Indemnified Taxpayer, that there exists a reasonable basis for the relevant Company to prevail on that appeal.

(d) Sellers shall not be entitled to settle or to contest any claim relating to Taxes if the settlement of, or an adverse judgment with respect to, the claim would be likely, in the good faith judgment of the Indemnified Taxpayer, to cause the Liability for any Tax of the Indemnified Taxpayer or of any Affiliate of the Indemnified Taxpayer for any taxable period ending after the Closing Date to increase (including by making any election or taking any action having the effect of making any election, by deferring the inclusion of any amount in income or by accelerating the deduction of any amount or the claiming of any credit) or to take a position that, if applied to any taxable period ending after the Closing Date, would be adverse to the interest of the Indemnified Taxpayer or any Affiliate of the Indemnified Taxpayer.

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(e) If, after actual receipt by the Indemnified Taxpayer of an amount advanced by Sellers pursuant to Subsection 10.3.3(b)(D), the extent of the liability of the Indemnified Taxpayer with respect to the indemnified matter shall be established by the judgment or decree of a court that has become final or a binding settlement with an administrative agency having jurisdiction thereof that has become final, the Indemnified Taxpayer shall promptly pay to Sellers, in the proportion to the amounts paid by each Seller, any refund received by or credited to the Indemnified Taxpayer with respect to the indemnified matter (together with any interest paid or credited thereon by the Governmental Authority and any recovery of legal fees from the Governmental Authority); provided, however, that the Indemnified Taxpayer shall have been indemnified and held harmless from all Tax Losses by reason of any indemnification payments retained by the Indemnified Taxpayer net of any Taxes imposed on the Indemnified Taxpayer with respect to indemnification payments received by the Indemnified Taxpayer or with respect to the receipt of any payment from the Governmental Authority. Notwithstanding the foregoing, the Indemnified Taxpayer shall not be required to make any payment hereunder before the time that Sellers shall have made all payments or indemnities then due to the Indemnified Taxpayer pursuant to this Section 10.

(f) If any of the conditions in Section 10.3.3(b) above are or become unsatisfied, (A) the Indemnified Taxpayer may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the claim in any manner it may deem appropriate (and the Indemnified Taxpayer need not consult with, or obtain any consent from, Sellers in connection therewith), (B) Sellers will jointly and severally reimburse the Indemnified Taxpayer promptly and periodically for the costs of defending against the claim (including attorneys’, accountants’ and experts’ fees and disbursements) and (C) Sellers will remain jointly and severally responsible for any Losses the Indemnified Taxpayer may suffer to the fullest extent provided in this Section 10.3.

10.3.4 Notwithstanding anything to the contrary in this Agreement, the indemnification obligations of Sellers under this Section 10 shall survive the Closing until the 90th day following the end of the applicable statutes of limitations (taking into account extensions, waivers or other documents extending such period). With respect to any indemnification obligation for any Tax for which a Governmental Authority asserts a claim within 90 days before the end of the applicable statute of limitations, an Indemnified Taxpayer shall be treated as having provided timely notice by providing written notice on or before the 90th day after the Indemnified Taxpayer’s receipt of a written assertion of the claim by the Governmental Authority.

10.3.5 All transfer, documentary, sales, use, stamp, registration and other similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be jointly and severally paid by Sellers when due, and Sellers will, at their expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees, and, if required by applicable Law, Buyer will, and will cause its Affiliates to, join in the execution of any of those Tax Returns and other documentation.

11.	MISCELLANEOUS.

11.1 Notices. All notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement must be in writing and must be delivered, given or otherwise provided:

(a) by hand (in which case, it will be effective upon delivery);

(b) by facsimile (in which case, it will be effective upon receipt of confirmation of good transmission); or

(c) by overnight delivery by a nationally recognized courier service (in which case, it will be effective on the Business Day after being deposited with such courier service);

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in each case, to the address (or facsimile number) listed below:


If to Sellers, to Sellers’	Roy Johnson
Representative:	255 S. Olympic View Avenue
	Sequim, WA 98382
	Telephone:	(360) 775-8997
	Facsimile:	(360) 681-7003

with a copy (which shall not	McAfee & Taft A Professional Corporation
constitute notice) to:	10^thFloor, Two Leadership Square
	211 North Robinson
	Oklahoma City, OK 73102
	Telephone:	(405) 552-2240
	Facsimile:	(405) 228-7440
	Attn: Justin Jackson

and with a copy (which shall not	James Anthony Breslo
constitute notice) to:	245 Tranquillo Road
	Pacific Palisades, CA 90272
	Telephone:	(818) 723-3748

If to Buyer, to:	Amaya Americas Corporation
	c/o Amaya Gaming Group Inc.
	7600 Trans-Canada Highway
	Pointe-Claire, QC H9R 1C8
	Attention:	David Baazov
	Telephone:	(514) 744-3122
	Facsimile:	(514) 744-5114

with a copy (which shall not	Greenberg Traurig, P.A.
constitute notice) to:	333 Avenue of the Americas
	(333 S.E. 2^ndAvenue)
	Miami, FL 33131
	Telephone:	(305) 579-0728
	Facsimile:	(305) 961-5728
	Attention:	Marlon D. Goldstein, Esq.

and with a copy (which shall not	Heenan Blaikie LLP
constitute notice) to:	1250 René-Lévesque west
	Suite 2500
	Montreal, Quebec H3B 4Y1
	Telephone:	(514) 846-2256
	Facsimile:	(514) 921-1256
	Attention:	Eric Levy

Each of the parties to this Agreement may specify a different address or facsimile number by giving notice in accordance with this Section 11.1 to each of the other parties hereto.

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11.2 Sellers’ Representative.

11.2.1 Appointment. “Sellers’ Representative” means Roy Johnson provided, that in the event of his death, resignation or physical or mental incapacity to act as Sellers’ Representative, “Sellers’ Representative” shall mean James Breslo. Each Seller hereby irrevocably constitutes and appoints Sellers’ Representative as such Seller’s attorney-in-fact and agent to act in such Seller’s name, place and stead in connection with all matters arising from and under this Agreement, each of the Company Agreements and any other agreements, documents or instruments related to the Contemplated Transactions and acknowledges that such appointment is coupled with an interest. Sellers’ Representative hereby accepts such appointment and authorization.

11.2.2 Authority. Each Seller agrees to be bound by all notices received or given by, and all agreements and determinations made by, and all documents executed and delivered by Sellers’ Representative under this Agreement; authorizes Sellers’ Representative to assert claims, make demands and commence actions on behalf of Sellers under this Agreement, dispute or to refrain from disputing any claim made by Sellers, negotiate and compromise any dispute that may arise under, and exercise or refrain from exercising remedies available to Sellers under, this Agreement, and to sign any releases or other documents with respect to such dispute or remedy (and to bind Sellers in so doing), give such instructions and do such other things and refrain from doing such things as Sellers’ Representative shall deem appropriate to carry out the provisions of this Agreement, give any and all consents and notices under this Agreement, and perform all actions, exercise all powers, receive service of process with respect to any Action under this Agreement, the Company Agreements and any other agreement or instrument in connection with the Contemplated Transactions, agree to, negotiate and authorize payments in connection with the Purchase Price Adjustment and any other payment pursuant to the terms of this Agreement, and fulfill all duties otherwise assigned to Sellers’ Representative in this Agreement. Each Seller hereby expressly acknowledges and agrees that Sellers’ Representative has the sole and exclusive authority to act on such Seller’s behalf in respect of all matters arising under or in connection with this Agreement after execution of this Agreement, notwithstanding any dispute or disagreement among them, and that no Seller shall have any authority to act unilaterally or independently of Sellers’ Representative in respect to any such matter. Buyer and the Company (after the Closing) shall be entitled to rely on any and all actions taken by Sellers’ Representative under this Agreement without any Liability to, or obligation to inquire of, any Seller. All notices, counter notices or other instruments or designations delivered by any Seller in regard to this Agreement shall not be effective unless, but shall be effective if, signed by Sellers’ Representative, and if not, such document shall have no force or effect whatsoever, and Buyer and the Company (after the Closing) and any other Person may proceed without regard to any such document.

11.2.3 Change of Representative. Sellers’ Representative may be changed by Sellers upon not less than twenty (20) calendar days prior written notice to Buyer; provided, that Sellers’ Representative may not be removed unless Sellers holding (or, following Closing, who held) a majority of the Shares agree to such removal and to the identity of the substituted agent or agents. Sellers’ Representative may resign at any time upon not less than thirty (30) calendar days’ prior written notice to Buyer, but in any event, not prior to the appointment of a substitute Sellers’ Representative. No bond shall be required of Sellers’ Representative. Notices or communications to or from Sellers’ Representative shall constitute notice to or from Sellers.

11.2.4 A decision, act, consent or instruction of Sellers’ Representative, including an amendment, extension or waiver of this Agreement, shall constitute a decision of Sellers and shall be final, binding and conclusive upon Sellers; and Buyer may conclusively and absolutely, rely, without any inquiry, upon any such decision, act, consent or instruction of Sellers’ Representative as being the decision, act, consent or instruction of Sellers. Buyer is hereby relieved from any Liability to any Person, including any Seller, for any acts done by it in accordance with or reliance on such decision, act, consent or instruction of Sellers’ Representative.

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11.2.5 All notices or other communications required to be made or delivered by Buyer to Sellers shall be made to Sellers’ Representative for the benefit of Sellers, and any notices so made shall discharge in full all notice requirements of Buyer to Sellers with respect thereto. All notices or other communications required to be made or delivered by Sellers to Buyer shall be made by Sellers’ Representative for the benefit of Sellers and any notices so made shall discharge in full all notice requirements of Sellers to Buyer with respect thereto.

11.3 Publicity. No public announcement or disclosure will be made by any party with respect to the subject matter of this Agreement or the Contemplated Transactions without the prior written consent of Buyer and Sellers’ Representative. Additionally, Buyer and Sellers’ Representative shall agree on the form and content of any public announcement or disclosure with respect to this Agreement or the Contemplated Transactions prior to the issuance thereof, including providing each other the opportunity to review and comment upon, and use all reasonable efforts to agree upon, any such public announcement or disclosure, and no such public announcement or disclosure shall be issued prior to such consultation and prior to considering in good faith any such comments; provided, however, that the provisions of this Section 11.3 will not prohibit (a) any disclosure required by any applicable Legal Requirements, including any disclosure necessary or desirable to provide proper disclosure under the securities Laws or under any rules or regulations of any securities exchange on which the securities of such party may be listed or traded or (b) any disclosure made in connection with the enforcement of any right or remedy relating to, or the performance of any obligation arising under, this Agreement or the Contemplated Transactions.

11.4 Succession and Assignment; No Third-Party Beneficiary. Subject to the immediately following sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, each of which successors and permitted assigns will be deemed to be a party hereto for all purposes hereof. No party may assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder (by operation of Law or otherwise) without the prior written approval of the other parties; provided, however, that Buyer may (a) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (b) designate one or more of its Affiliates to perform its obligations hereunder; provided, no such assignment or delegation shall relieve Buyer of its obligations hereunder. Except as expressly set forth in Section 9 with respect to Indemnified Persons who are not parties to this Agreement, this Agreement is for the sole benefit of the parties and their successors and permitted assignees and nothing herein expressed or implied will give or be construed to give any Person, other than the parties and such successors and assignees, any legal or equitable rights hereunder.

11.5 Amendments and Waivers. No amendment or waiver of any provision of this Agreement will be valid and binding unless it is in writing and signed, in the case of an amendment, by Buyer and Sellers’ Representative, or in the case of a waiver, by the party or parties against whom the waiver is to be effective. No waiver by any party of any breach or violation or, default under or inaccuracy in any representation, warranty or covenant hereunder, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in, any such representation, warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party in exercising any right, power or remedy under this Agreement will operate as a waiver thereof.

11.6 Further Assurances. From and after the date hereof, upon the request of Sellers’ Representative or Buyer, each party will do, execute, acknowledge and deliver all such further acts,

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assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the Contemplated Transactions. No Sellers will take any action that is designed or intended to have the effect of discouraging any lessor, licensor, supplier, distributor or customer of the Company or other Person with whom the Company has a relationship from maintaining the same relationship with the Company after the Closing as it maintained prior to the Closing.

11.7 Entire Agreement. This Agreement, the Company Agreements, the Confidentiality Agreement and the other agreements and documents to be executed and delivered pursuant hereto or contemporaneously herewith constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any and all prior and contemporaneous discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with respect thereto.

11.8 Schedules; Listed Documents, etc. Notwithstanding anything to the contrary contained in the Disclosure Schedules or in this Agreement, the information and disclosures contained in any section of a Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other section of such Disclosure Schedule as though fully set forth in such section for which applicability of such information and disclosure is reasonably apparent. The fact that any item of information is disclosed in any Disclosure Schedule shall not be construed to mean that such information is required to be disclosed by this Agreement. Such information and the dollar thresholds set forth herein shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement.

11.9 Counterparts; Execution. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute but one and the same instrument. This Agreement will become effective when duly executed by each party hereto. Facsimile or other electronically scanned and transmitted signatures shall be deemed originals and shall constitute valid execution and acceptance of this Agreement by the signing/transmitting party.

11.10 Survival. The covenants and agreements and, subject to Section 9.3, the representations and warranties set forth in this Agreement shall survive and remain in effect after the Closing.

11.11 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If any provision hereof would, under applicable Law, be invalid or unenforceable in any respect, then each party hereto intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable Law.

11.12 Headings. The headings contained in this Agreement are for convenience purposes only and will not in any way affect the meaning or interpretation hereof.

11.13 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

11.14 Governing Law. This Agreement, the rights of the parties and all Actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

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11.15 Jurisdiction; Venue; Service of Process.

11.15.1 Jurisdiction. Subject to the provisions of Section 5.2.3, each party, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Courts located in New York, NY for the purpose of any Action between the parties arising in whole or in part under or in connection with this Agreement, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) hereby agrees not to commence any such Action other than before one of the above-named courts. Notwithstanding the previous sentence a party may commence any Action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

11.15.2 Venue. Each party agrees that for any Action between the parties arising in whole or in part under or in connection with this Agreement, such party will bring Actions only in New York, NY. Each party further waives any claim and will not assert that venue should properly lie in any other location within the selected jurisdiction.

11.15.3 Service of Process. Each party hereby (a) consents to service of process in any Action between the parties arising in whole or in part under or in connection with this Agreement in any manner permitted by New York law, (b) agrees that service of process made in accordance with clause (a) or made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 11.1, will constitute good and valid service of process in any such Action (including, with respect to each Seller that notice need only be given to Sellers’ Representative) and (c) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with clause (a) or (b) does not constitute good and valid service of process.

11.16 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY ACTION WHATSOEVER BETWEEN OR AMONG THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHICH ACTION WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

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11.17 Expenses. Except as provided in Sections 1.5.3, 9 or 10, each party shall bear its own expenses incurred in connection with this Agreement and the Contemplated Transactions.

11.18 Specific Performance. Buyer shall have the right and remedy, in addition to any others that may be available, at law or in equity, to have the provisions of this Agreement specifically enforced through injunctive or other relief, without the necessity of posting a bond, it being acknowledged that the Company is a unique asset, with value to Buyer’s business not readily quantifiable and any breach by Sellers and/or the Company which causes the Closing not to occur will cause irreparable injury to Buyer, the amount of which will be difficult to determine, and that money damages will not provide an adequate remedy to Buyer. The Sellers and the Company covenant and agree that they shall not, and shall not authorize any other Person to, challenge or question the enforceability of any provision of this Section 11.18.

12.	DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.

12.1 Definitions. As used herein, the following terms will have the following meanings:

“1933 Act” means the Securities Act of 1933.

“Accounts Receivable” means the aggregate amount of accounts, commissions and debts payable to the Company. For all purposes hereunder, the Accounts Receivable shall be valued at their net realizable value, net of an allowance for bad debts.

“Action” means any claim, action, cause of action or suit (whether in contract, tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, hearing, charge, complaint, demand, notice or proceeding to, from, by or before any Governmental Authority.

“Affiliate” means with respect to any specified Person, (a) each Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person at such time, (b) each Person who is at such time an officer, limited liability company manager or director of, or direct or indirect beneficial holder of at least 20% of any class of the capital stock of, such specified Person, (c) each Person that is managed by a common group of executive officers, limited liability company managers and/or directors as such specified Person, (d) the Members of the Immediate Family (i) of each officer, director, limited liability company manager or holder described in clause (b) and (ii) if such specified Person is an individual, of such specified Person, and (e) each Person of which such specified Person or an Affiliate (as defined in clauses (a) through (d)) thereof will, directly or indirectly, beneficially own at least 20% of any class of equity interests at such time.

“Affiliated Group” means any affiliated group within the meaning of section 1504(a) of the Code or any affiliated, consolidated, combined, unitary, aggregate or similar group defined under a similar provision of any Legal Requirement.

“Breslo Incentive Plan” means that certain Employee Incentive Compensation Plan, dated December 23, 2004, by and between the Company and Bill Breslo.

“Business” means the Company’s manufacturing and servicing of Class II and Class III games and gaming systems for the public gaming, Native American and charity markets. “Business” shall not include the Phone Card Business.

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“Business Day” means any weekday other than a weekday on which banks in New York City, New York are authorized or required to be closed.

“Buyer’s Disclosure Schedule” means the disclosure schedules attached hereto and delivered by Buyer to Sellers in connection with this Agreement.

“CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act of 1980.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Company Software” means Owned Software and Licensed Software.

“Company Source Code” means any source code, or any portion, aspect or segment of any source code, relating to any Company Technology.

“Company Technology” means any and all Technology used in connection with the Business and any and all Intellectual Property in any and all such Technology.

“Company’s Disclosure Schedules” means the disclosure schedules attached hereto and delivered by the Company to Buyer in connection with this Agreement.

“Compensation” means, with respect to any Person, all salaries, compensation, remuneration, bonuses or benefits of any kind or character whatever, paid or provided directly or indirectly by any Company to such Person or Affiliates of such Person.

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of November 29, 2011, by and among Sellers, the Company and Amaya Gaming Group Inc.

“Contaminant” means any pollutant, hazardous substance, radioactive substance, toxic substance, hazardous waste, medical waste, radioactive waste, special waste, petroleum or petroleum-derived substance or waste, asbestos, polychlorinated biphenyls, or any hazardous or toxic constituent thereof and includes any substance defined in or regulated under any Environmental Law.

“Contemplated Transactions” means the transactions contemplated by this Agreement, including the sale and purchase of the Shares.

“Contractual Obligation” means, with respect to any Person, any contract, agreement, deed, mortgage, lease, license, commitment, promise, undertaking, arrangement, performance bond, warranty obligation or understanding, whether written or oral and whether express or implied, or other document or instrument (including any document or instrument evidencing or otherwise relating to any Debt), to which or by which such Person is a party or otherwise subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

“CPA Firm” means, unless otherwise agreed in writing by Sellers’ Representative and Buyer, an accountant mutually satisfactory to Sellers’ Representative and Buyer who satisfies each of the following requirements (unless otherwise agreed by Sellers’ Representative and Buyer): (i) neither the accountant nor the firm that employs the accountant shall have performed any accounting or consulting services for any party or any Affiliate of any party at any time during the three year period prior to the date of this Agreement; (ii) the accountant is not related in any way by blood or marriage to any party or any executive officer or director of any party or any Affiliate of such party; (iii) the accountant has been a certified public accountant duly licensed to practice in the state where he or she has his or her primary office for a period of not less than ten years; and (iv) the accountant is willing to accept engagement as a CPA Firm on the terms and conditions of this Agreement.

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“Debt” means, with respect to any Person, all obligations (including all obligations in respect of principal, accrued interest, penalties, fees and premiums) of such Person, whether direct or indirect, (a) for borrowed money (including overdraft facilities), (b) for Liabilities secured by any Encumbrance existing on property owned or acquired and subject thereto, (c) evidenced by notes, bonds, debentures or similar Contractual Obligations, (d) for the deferred purchase price of property, goods or services, including in connection with the acquisition of any business or non-competition agreement (other than trade payables or accruals incurred in the Ordinary Course of Business), (e) under capital leases (in accordance with GAAP), (f) in respect of letters of credit and bankers’ acceptances, (g) for Contractual Obligations relating to interest rate protection, swap agreements, factoring, hedging and collar agreements, (h) in the nature of premiums (prepayment or otherwise) or penalties in connection with the obligations described in clauses (a) through (g) above, and (h) in the nature of Guarantees of the obligations described in clauses (a) through (g) above of any other Person; provided, that, for purposes of Estimated Indebtedness and Final Indebtedness “Debt” shall not include the Qualified Machine Indebtedness.

“Disclosure Schedules” means, collectively, the Company’s Disclosure Schedules, Sellers’ Disclosure Schedule and Buyer’s Disclosure Schedule.

“Encumbrance” means any charge, claim, community or other marital property interest, condition, equitable interest, lien, license, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership.

“Enforceability Exceptions” means (a) bankruptcy, insolvency, reorganization, moratorium or other Laws now or hereafter in effect affecting the enforceability of creditors’ rights generally, and (b) general principles of equity that may limit the availability of remedies (regardless of whether enforceability is considered in a proceeding in equity or at law).

“Enforceable” means, with respect to any Contractual Obligation stated to be “Enforceable” by or against any Person, that such Contractual Obligation is a legal, valid and binding obligation of such Person enforceable by or against such Person in accordance with its terms.

“Environmental, Health and Safety Liabilities” means any claim, demand, order, suit, cost, damages, expense, Liability, obligation (including any investigatory, corrective or remedial obligation), or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to: (a) any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and regulation of chemical substances or products); (b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law; (c) financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions (“Cleanup”) required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or (d) any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law. The terms “removal,” “remedial,” and “response action,” include the types of activities covered by CERCLA.

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“Environmental Laws” means all Legal Requirements relating to or addressing the environment, health or safety, which shall include the use, handling, treatment, storage or disposal of any Contaminant, or workplace or worker safety and health.

“Equity Security” of any Person means any (i) capital stock, membership or partnership interest or other ownership interest of or in such Person; (ii) securities directly or indirectly convertible into or exchangeable for any for the foregoing; (iii) options, warrants or other rights directly or indirectly to purchase or subscribe for any of the foregoing or securities convertible into or exchangeable for any of the foregoing; or (iv) contracts, commitments, agreements, understandings, arrangements, calls or claims of any kind relating to the issuance of any of the foregoing or giving any Person the right to participate in or receive any payment based on the profits or performance of such Person (including any equity appreciation, phantom equity or similar plan or right).

“ERISA” means the federal Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any entity that together with the Company would be deemed to be a single employer within the meaning of Section 4001(b)(i) or ERISA.

“Excluded Damages” means any incidental, consequential (including lost profits), punitive, special, indirect or exemplary damages, damages for diminution in value, or damages calculated on a multiple of earnings or similar basis.

“Facilities” means any buildings, plants, improvements or structures located on the Real Property.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

“Gaming Approvals” means all licenses, permits, approvals, authorizations, registrations, findings of suitability, franchises, entitlements, waivers and exemptions issued by any Gaming Authority necessary for, relating to, or applicable to the Company, Sellers (or any of their respective Affiliates) or the Business.

“Gaming Authorities” means those federal, state, local, tribal and other governmental, regulatory and administrative authorities, licensing authorities, agencies, boards and officials responsible for, or involved in, the regulation, oversight or licensing of gaming, lottery operations (including video lottery operations), racing, pari-mutuel activities or other similar activities applicable to the Company, Sellers (or any of their respective Affiliates) or the Business.

“Gaming Equipment” means all gaming machines, video gaming equipment, video lottery terminals, pull-tabs, Class II gaming devices and games, the Company’s “Skiltab” device and other gaming or lottery devices and equipment, manufactured, developed leased or sold by or on behalf of the Company.

“Gaming Laws” means all Legal Requirements pursuant to which any Gaming Authority possesses regulatory, licensing or permit authority over gaming, lottery operations (including video lottery operations), racing, pari-mutuel activities or other similar activities applicable to the Company, Sellers (or any of their respective Affiliates) or the Business.

“Governmental Authority” means any federal, state, local, tribal, provincial, municipal or any foreign government, or political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative,

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police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any arbitrator or arbitral body, and the term “Governmental Authority” includes, without limitation, Gaming Authorities.

“Governmental Authorization” means any approval, consent, license, Permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority in a judicial or administrative proceeding.

“Guarantee” means, with respect to any Person, (a) any guarantee of the payment or performance of, or any contingent obligation in respect of, any Debt or other Liability of any other Person; (b) any other arrangement whereby credit is extended to any obligor (other than such Person) on the basis of any promise or undertaking of such Person (i) to pay the Debt or other Liability of such obligor, (ii) to purchase any obligation owed by such obligor, (iii) to purchase or lease assets under circumstances that are designed to enable such obligor to discharge one or more of its obligations or (iv) to maintain the capital, working capital, solvency or general financial condition of such obligor; and (c) any liability as a general partner of a partnership or as a venturer in a joint venture in respect of Debt or other obligations of such partnership or venture.

“Indemnified Person” means, with respect to any Indemnity Claim, the Person asserting such claim under Section 9.1 or 9.2 as the case may be.

“Indemnifying Person” means, with respect to any Indemnity Claims, (i) Sellers, or (ii) Buyer under Section 9.1 or 9.2, respectively, against whom such claim is asserted.

“Indemnity Claim” means a claim for indemnity under Section 9.1 or 9.2.

“Intellectual Property” means the entire right, title and interest in and to all proprietary rights of every kind and nature anywhere, including all rights and interests pertaining to or deriving from:

(a) patents, copyrights, mask work rights, Technology, know-how, processes, Trade Secrets, algorithms, inventions, works, proprietary data, databases, formulae, research and development data and Software;

(b) trademarks, trade names, service marks, service names, brands, trade dress and logos, and the goodwill and activities associated therewith;

(c) domain names, rights of privacy and publicity, moral rights, and proprietary rights of any kind or nature, however denominated, throughout the world in all media now known or hereafter created;

(d) any and all registrations, applications, recordings, licenses, common-law rights and Contractual Obligations relating to any of the foregoing; and

(e) all Actions and rights to sue at law or in equity for any past, present or future infringement or other impairment of any of the foregoing, including the right to receive all proceeds and damages therefrom, and all rights to obtain renewals, continuations, divisions or other extensions of legal protections pertaining thereto.

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“Inventory” means all inventory related to the Business, wherever located, including all finished goods whether held at any location or facility of the Company or in transit to the Company.

“Investment” means (a) any direct or indirect ownership, purchase or other acquisition by a Person of any notes, obligations, instruments, Equity Securities (including joint venture interests) of any other Person; and (b) any capital contribution or similar obligation by a Person to any other Person.

“Knowledge Qualifier” means any reference or qualification to Sellers’ Knowledge, Knowledge of Sellers, the Company’s Knowledge, Knowledge of the Company or any similar phrase regarding the knowledge, belief or understanding of any Seller, the Company or any of their respective Representatives.

“Law” means any federal, national, foreign, supranational, state, provincial, local or similar statute, law, standard, resolution, promulgation, ordinance, regulation, rule, instrument, code, order, requirement or rule of law (including common law), or any similar provision having the force or effect of law, and the term “Law” includes, without limitation, Gaming Laws.

“Legal Requirement” means any Law, Governmental Order or Permit.

“Liability” means, with respect to any Person, any liability or obligation of such Person, of any kind, character or description, whether known or unknown, whether asserted or unasserted, whether executory, determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether disputed or undisputed, whether disclosed or undisclosed, whether incurred or consequential, whether secured or unsecured, joint or several, vested or unvested, whether due or to become due, whether choate or inchoate and whether or not required under GAAP to be accrued on the financial statements of such Person and regardless of whether such debt, duty or liability is immediately due and payable, and including all costs and expenses related thereto.

“Licensed Software” means all Software that is owned by any third party and that is licensed to and used by the Company in the conduct of the Business.

“Losses” means any loss, liability, claim, damage, expense (including costs of defense and reasonable attorneys’ fees under circumstances a party is entitled to incur such costs and fees pursuant to this Agreement); provided, however, that the term Losses shall be limited to actual damages and shall exclude Excluded Damages.

“M&T Fees and Expenses” means all fees, costs, expenses and obligations incurred by or for the benefit of the Company and/or the Sellers and payable to McAfee & Taft, a Professional Corporation, in connection with: (a) the due diligence conducted in anticipation of the Contemplated Transactions; (b) the negotiation, preparation and review of this Agreement (including Sellers’ Disclosure Schedule), the Company Agreements and all agreements, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the Contemplated Transactions; (c) the preparation and submission of any filing or notice required to be made or given in connection with the Contemplated Transactions and obtaining any consent required to be obtained in connection with the Contemplated Transactions; or (d) otherwise in connection with the Contemplated Transactions, in each case of (a), (b), (c) and (d) to the extent such fees, costs and expenses are owing as of Closing Date.

“Material Adverse Effect” means any change in, development, event, occurrence or effect on, the Business, operations, Assets, condition (financial or otherwise) or results of operations of the Company which, whether viewed on a short-term or a long-term basis, when considered either individually or in the aggregate together with all other adverse changes or effects with respect to which such phrase is used in this Agreement, (a) is, or would reasonably be expected to be, materially adverse to the Business,

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operations, Assets, condition (financial or otherwise) or results of operations of the Company, or (b) prevents or materially delays Sellers’ ability to perform their respective obligations hereunder, other than (i) any event, matter or circumstance generally affecting the economy of the United States, (ii) any national or international political or social condition or event, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any of its territories, possessions, or diplomatic or consular offices, or upon any military installation of the United States, and its effect upon any Company, (iii) any change in GAAP (provided that, in the case of the preceding clauses (i), (ii) and (iii), to the extent the same does not have a disproportionate impact on the Company relative to other companies in the same industry as the Company) or (iv) any event, matter or circumstance arising as a result of or in connection with the Company’s withdrawal from any jurisdictions as required by Buyer pursuant to Section 4.13.

“Members of the Immediate Family” means, with respect to any individual, (a) such Person’s spouse, (b) each parent, brother, sister or child of such Person or such Person’s spouse, (c) the spouse of any Person described in clause (b) above, (d) each child of any Person described in clauses (a), (b) or (c) above, (e) each trust created solely for the benefit of one or more of the Persons described in clauses (a) through (d) above and (f) each custodian or guardian of any property of one or more of the Persons described in clauses (a) through (e) above in his capacity as such custodian or guardian.

“Net Working Capital” means as of any particular date (a) the value of all of the Company’s current Assets, less (b) the amount of all of the Company’s current Liabilities, including accrued current Liabilities not yet due, all as determined in accordance with GAAP; provided however, that (A) (i) the current portion of Qualified Machine Indebtedness (ii) and the current portion under the Breslo Incentive Plan shall, in each case, shall be excluded from the calculation of Net Working Capital, and (B) all accrued and unpaid interest on Debt incurred by the Company under the Equipment Placement Draw Down Facility shall be included as a current Liability. Net Working Capital shall be determined on a basis consistent with the Working Capital Calculation.

“Occupational Safety and Health Law” means any Legal Requirement, including the Occupational Safety and Health Act of 1970, as amended, and the rules and regulations promulgated thereunder, which both has been adopted and is effective prior to the Closing Date and which is designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

“Ontario Lottery” means the Ontario Lottery and Gaming Corporation.

“Ordinary Course of Business” means an action taken by any Person in the ordinary course of such Person’s business which is consistent with the past customs and practices of such Person (including past practice with respect to quantity, amount, magnitude and frequency, standard employment and payroll policies and past practice with respect to management of working capital) which is taken in the ordinary course of the normal day-to-day operations of such Person and does not require the consent of the shareholders or board of directors of such Person.

“Organizational Documents” means, with respect to any Person (other than an individual), (a) the certificate or articles of incorporation, formation or organization, and any joint venture, limited liability company, operating or partnership agreement and other similar documents entered into or adopted at any time or filed in connection with the creation, formation or organization of such Person and (b) all by-laws, shareholders’ agreements, voting agreements, rights of first refusal and similar documents, instruments or agreements relating to the organization or governance of such Person, in each case, as amended or supplemented.

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“Owned Software” means all Software used by the Company in the conduct of its Business that is owned or purported to be owned by such Company.

“Permits” means, with respect to any Person, any license, franchise, permit, consent, approval, right, privilege, certificate or other similar authorization issued by, or otherwise granted by, any Governmental Authority or any other Person to which or by which such Person is subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

“Permitted Encumbrance” means (a) statutory liens for current Taxes, special assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings, (b) mechanics’, materialmen’s, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the Ordinary Course of Business that are not resulting from a breach, default or violation by the Company or an Subsidiary of any Contractual Obligation or Legal Requirement and which liens are not material in amount and do not interfere with the current operation of the Business, (c) zoning, entitlement, restrictive covenants and conditions, and building and other land use regulations that do not materially detract from the value, use or marketability of the property affected thereby with respect to its current use, and are not violated by the existing or currently proposed structures on the property or the use of the property; (d) easements, permits, rights-of-way, servitudes, plat restrictions, surface leases, and other rights vested in third parties related to the surface of the lands that do not materially adversely affect any Company’s or its Subsidiaries’ use, as applicable, enjoyment or ownership of its assets; (e) liens incurred in the Ordinary Course of Business in connection with workers compensation, unemployment insurance or other forms of insurance (other than ERISA) or other benefits from Governmental Authorities for sums not yet due; (f) restrictions on the transfer of securities arising under federal and state securities Laws and (g) Encumbrances which will be terminated as of the Closing as provided in this Agreement.

“Person” means any individual or corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, Governmental Authority or other entity of any kind.

“Phone Card Business” means the Company’s manufacture, sale and distribution of pre-paid phone cards with promotional sweepstakes in the U.S. domestic market.

“Qualified Financing” means debt financing in respect of Qualified Machine Expenditures, which debt financing shall be on commercially reasonable market terms and shall not in any event include the issuance of any Equity Securities of the Company. “Qualified Financing” shall include Debt incurred by the Company under the Equipment Placement Draw Down Facility.

“Qualified Machine Expenditures” means expenses incurred (or accrued on the Company’s balance sheet in accordance with GAAP) by the Company, during the period commencing on April 26, 2013 and ending on the Closing Date, under written Contractual Obligations with third-Persons that are not Affiliates of the Company or any Seller (copies of which Contractual Obligations and written invoices in respect thereof are provided by the Company to Buyer) for the manufacture (in whole or in part) of, and the purchase of materials for, (i) the Company’s proprietary video lottery terminals for the Company’s Ontario Lottery project and (ii) gaming machines for Company projects other than the Ontario Lottery project; provided, however, that in the case of the preceding clause (ii), Buyer must first consent in writing to such projects, which consent shall be given if the Company demonstrates, to Buyer’s satisfaction (which shall be determined in Buyer’s sole discretion), that such projects will provide a reasonable return on investment.

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“Qualified Machine Indebtedness” means the aggregate principal amount of Debt incurred by the Company during the period commencing on April 26, 2013 and ending on the Closing Date in respect of Qualified Financing (for the avoidance of doubt, “Qualified Machine Indebtedness” shall not include any accrued and unpaid interest on such Debt).

“Release” means the release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migrating into the indoor or outdoor environment of any Contaminant through, in, into or from the air, soil, surface water, groundwater or any property.

“Representative” means, with respect to any Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

“Sellers’ Disclosure Schedule” means the disclosure schedules attached hereto and delivered by Sellers to Buyer in connection with this Agreement.

“Sellers’ Knowledge” means the knowledge of Breslo and Johnson, each of whom will be deemed to have knowledge of all such matters as he would have discovered, had he made reasonable inquiries, including reasonable inquiries of the officers and directors of the Company.

“Software” means computer software or firmware in any form, including object code, source code, computer instructions, commands, programs, modules, routines, procedures, rules, libraries, macros, algorithms, tools, and scripts, and all documentation of or for any of the foregoing.

“Subsidiary” means, with respect to any specified Person, any other Person of which such specified Person will, at the time, directly or indirectly through one or more Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other shares of beneficial interest) entitled to vote generally, (b) hold at least 50% of the partnership, limited liability company, joint venture or similar interests or (c) be a general partner, managing member or joint venturer.

“Tax” means (a) any and all federal, state, local, provincial, municipal and foreign taxes, assessments and other governmental charges, duties, impositions, levies and Liabilities of any kind whatsoever, including taxes based upon, measured by, or with respect to income, earnings, profits or gross receipts, or any sales, use, ad valorem, transfer, franchise, license, lease, withholding, payroll, employment, inventory, excise, severance, stamp, occupation, premium, real or personal property, windfall profits, environmental (including taxes under Code Section 59A), alternative or add-on minimum, financial transactions, customs, duties, capital stock, social security (or similar), unemployment, disability, gains, recapture, estimated, net worth, recording, registration, value-added, production, service, service use, special assessment, workers’ compensation, utility or any other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, whether disputed or not, and (b) any liability for any amount described in the immediately preceding clause (a) as a result of being a transferee or successor, an indemnitor, by contract, assumption or otherwise, or as a result of being or having been a member of an affiliated, consolidated, combined, unitary, aggregate or similar group for Tax purposes, including under Treasury Regulations Section 1.1502-6 or similar state, local or foreign Law, or pursuant to a tax indemnity, tax sharing or other contract, agreement, arrangement or understanding, and “Taxes” means any or all of the foregoing collectively.

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“Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Technology” means all inventions, works, discoveries, innovations, know-how, information (including ideas, research and development, formulas, compositions, processes and techniques, data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, business and marketing plans and proposals, documentation and manuals), Software, computer hardware, integrated circuits and integrated circuit masks, electronic, electrical and mechanical equipment and all other forms of technology, including improvements, modifications, works in process, derivatives or changes, whether tangible or intangible, embodied in any form, whether or not protectable or protected by patent, copyright, mask work right, trade secret law or otherwise, and all documents and other materials recording any of the foregoing.

“Threatened” means a claim, Action, dispute or audit, with respect to which a demand or statement has been made to the Company, any Seller or their Representatives orally or in writing.

“Trade Secrets” means trade secrets, know how and confidential business information and any other information, however documented, that is a trade secret within the meaning of the applicable trade secret protection Laws, including the Uniform Trade Secrets Act.

“Treasury Regulations” means the regulations promulgated under the Code.

12.2 Glossary of Other Defined Terms. The following sets forth the location of definitions of capitalized terms defined in the body of this Agreement:


Term		Location

“Acquisition Proposal”		Section 4.5
“Actual Closing Balance Sheet”		Section 1.5.1
“Actual Indebtedness”		Section 1.5.1
“Actual Net Working Capital”		Section 1.5.1
“Agreement”		Preamble
“Amaya”		Recitals
“Assets”		Section 2.10.1
“Audited Financials”		Section 2.6.1
“Breslo”		Preamble
“Buyer”		Preamble
“Buyer Indemnified Person”		Section 9.1
“Buyer’s Position”		Section 1.5.3
“Canadian Affiliate”		Section 4.15
“Canadian Direct Purchase Election”		Section 4.15
“Canadian Shares”		Section 4.15
“Closing”		Section 1.6
“Closing Balance Sheet”		Section 1.5.1
“Closing Certificate”		Section 1.3
“Closing Date”		Section 1.6
“Closing Date Purchase Price”		Section 1.4.1
“Closing Statement”		Section 1.3
“Commercial Software”		Section 2.14.1
“Company”		Preamble

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Term		Location

“Company Agreements”		Section 2.3
“Company Subsidiary”		Section 2.1.1
“Company Systems”		Section 2.14.10
“Competitive Business”		Section 5.2.1(a)
“Controlled Group”		Section 2.17(c)
“Customer Assets”		Section 2.16
“Data Room”		Section 1.6.2(a)(vii)
“Debt Reduction”		Section 9.13
“Deductible”		Section 9.1.3
“Disclosed Contract”		Section 2.19.2
“Employee Plans”		Section 2.17(a)
“Equalizing Dividend”		Section 4.14
“Equipment”		Section 2.13
“Equipment Placement Draw Down Facility”		Recitals
“Estimated Closing Balance Sheet”		Section 1.3
“Estimated Indebtedness”		Section 1.3.1
“Estimated Net Working Capital”		Section 1.3.2
“Final Closing Statement”		Section 1.5.1
“Excess”		Section 4.15
“Financials”		Section 2.6.1
“FLSA”		Section 2.23.2
“General Release”		Section 1.6.2(a)(viii)
“Indemnified Taxpayer”		Section 10.3.1
“Innovation”		Section 1.6.2(b)(iv)
“Innovation Fee”		Section 1.6.2(b)(iv)
“Interim Financials”		Section 2.6.1
“IRS”		Section 2.17(e)
“Key Gaming Approvals”		Section 6.10
“Liability Cap”		Section 9.1.3
“Liability Policies”		Section 2.25
“Licenses”		Section 2.14.6
“Limited Restricted Period”		Section 5.2.1
“Materiality Qualifier”		Section 6.1
“Most Recent Balance Sheet”		Section 2.6.1
“Most Recent Balance Sheet Date”		Section 2.6.1
“Multiemployer Plan”		Section 2.17(a)
“PBGC”		Section 2.17(e)
“Phantom Stock Awards”		Section 4.10
“Phantom Stock Plan”		Section 4.10
“Phone Card Business Assets and Liabilities”		Section 2.10.3
“Phone Card Business Dividend”		Section 4.14
“Pre-Closing Period”		Section 4.1
“Predecessor”		Section 2.1.2
“Public Software”		Section 2.14.8
“Purchase Price”		Section 1.2
“Purchase Price Adjustment”		Section 1.5.5
“Purchase Price Dispute Expenses”		Section 1.5.3
“Real Property”		Section 2.12.1

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Term		Location

“Real Property Leases”		Section 2.12.1
“Receivables”		Section 2.11
“Restricted Period”		Section 5.2.1
“SEC”		Section 2.15.5(d)
“Seller” / “Sellers”		Preamble
“Seller Indemnified Person”		Section 9.2
“Seller-Prepared Returns”		Section 10.2.2
“Sellers’ Objection”		Section 1.5.2
“Sellers’ Position”		Section 1.5.3
“Sellers’ Representative”		Preamble
“Shares”		Recitals
“Spousal Consent”		Section 1.6.2(a)(x)
“Straddle Period”		Section 10.2.2
“Straddle Return”		Section 10.2.2
“Tax Losses”		Section 10.3.1
“Territory”		Section 5.2.1(a)
“Third Party Claim”		Section 9.4.1
“Unaffiliated Breslo Employer”		Section 5.2.1
“Unaudited Financials”		Section 2.6.1
“Wadley”		Section 1.6.2(b)(v)
“Wadley Fee”		Section 1.6.2(b)(v)
“Withdrawn Consents”		Section 4.13
“WARN”		Section 2.23.2
“Working Capital Calculation”		Section 1.3.2

12.3 Rules of Construction. Except as otherwise explicitly specified to the contrary, (a) each reference to a Section, Exhibit or Schedule means a Section of, or Schedule or Exhibit to this Agreement, unless another agreement is specified, (b) the word “including” will be construed as “including without limitation,” (c) references to a particular statute or regulation include all rules and regulations thereunder and any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (d) words in the singular or plural form include the plural and singular form, respectively, (e) references to a particular Person include such Person’s successors and assigns to the extent not prohibited by this Agreement and (f) all pronouns and any variations thereof refer to the masculine, feminine or neuter singular or plural as the identity of the Person or Persons may require. The terms “hereof”, “herein”, “hereunder”, “hereto” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement. The word “or” shall not be exclusive. All references herein to “dollars” or “$” are to United States dollars. Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given such term in accordance with GAAP and all financial computations hereunder will be computed, unless otherwise specifically provided herein, in accordance with GAAP consistently applied. All references herein to any period of days shall mean the relevant number of calendar days unless otherwise specified. Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day. All references herein to a “party” or “parties” are to a party or parties to this Agreement unless otherwise specified. The phrases “date of this Agreement,” “date hereof” and terms of similar impart, unless the context otherwise requires, shall be deemed to refer to the date set forth in the preamble of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Agreement, or caused this Agreement to be duly executed on its behalf by its officer thereunto duly authorized, as of the date first set forth above.


BUYER:

Amaya Americas Corporation

By:		(signed)
Name:		Daniel Sebag
Title:		Authorized Representative

SELLERS:

(signed)
James Breslo

(signed)
Roy Johnson

COMPANY

Diamond Game Enterprises

By:		(signed)
Name:		James Breslo
Title:		President and CEO

SELLERS’ REPRESENTATIVE:

(signed)
Roy Johnson, as Sellers’ Representative

[Signature page to Stock Purchase Agreement]

Execution Copy

FIRST AMENDMENT TO

STOCK PURCHASE AGREEMENT

This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT is made and entered into as of February 13, 2014 (this “Amendment”) by and between Amaya Americas Corporation, a Delaware corporation (“Buyer”), Diamond Game Enterprises, a California corporation, and Roy Johnson, as Sellers’ Representative. Capitalized terms used herein but not herein defined shall have the respective meanings ascribed thereto in that certain Stock Purchase Agreement, dated June 10, 2013, by and among Buyer, Diamond Game Enterprises, a California corporation, James Breslo, an individual resident in the State of California, Roy Johnson, an individual resident in the State of Washington, and Roy Johnson, as Sellers’ Representative (the “Purchase Agreement”).

WHEREAS, in connection with that certain Cause No. EP-99-CA-00320-KC, currently styled State of Texas v. Ysleta Del Sur Pueblo, The Tribal Council, Tribal Governor Francisco Paiz or his successor, Diamond Game Enterprises, Accelerated Marketing Solutions LLC, Winter Sky, LLC, and Excite Amusement, Inc., in the United States District Court, Western District of Texas, El Paso Division, in accordance with Section 11.5 of the Purchase Agreement, Buyer and Sellers’ Representative desire to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants of the parties as hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

AMENDMENTS

1.1 Amendment to Section 1 (Purchase and Sale of Shares).

(a) Section 1.4 is hereby amended and restated to read in its entirety as follows:

“1.4 Payment of Closing Date Purchase Price. At Closing, Buyer shall, subject to Section 1.6.2(b)(i):

1.4.1 pay to Sellers as set forth on Schedule 1.2 an amount (the “Closing Date Purchase Price”) equal to the following:

(a) Twenty-Five Million Dollars ($25,000,000); minus

(b) the Estimated Indebtedness; minus

(c) if the Estimated Net Working Capital is less than Zero Dollars ($0), the difference between Zero Dollars ($0) and the Estimated Net Working Capital; plus

(d) if the Estimated Net Working Capital is more than Zero Dollars ($0), the difference between the Estimated Net Working Capital and Zero Dollars ($0).”

(b) Section 1.6.2(a) is hereby amended by (x) amending and restating Section 1.6.2(a)(xi) in its entirety as set forth below, (y) deleting the period from the end of Section 1.6.2(a)(xii) and inserting a semicolon in its place and (z) adding the following new clauses to Section 1.6.2(a):

“(xi) written invoices for the (1) Innovation Fee, (2) Wadley Fee, (3) M&T Fees and Expenses and (4) Gardere Fees and Expenses;”

“(xiii) the representation letter, substantially in the form of Exhibit A to the First Amendment, executed by Wadley;

(xiv) the representation letter, substantially in the form of Exhibit B to the First Amendment, executed by Innovation;

(xv) a receipt for the Nwankwo Bonus Payment, executed by Oji Nwankwo; and

(xvi) Phantom Stock Termination Agreements, in form and substance reasonably satisfactory to Buyer, executed by each of Bill Breslo, Bryan Greene and Kevin Kuske.”

“(i) the Closing Date Purchase Price less (1) the Breslo Incentive Payment, (2) the Nwankwo Bonus Payment, (3) the Innovation Fee, (4) the Wadley Fee, (5) the M&T Fees and Expenses, (6) the Gardere Fees and Expenses, (7) the Phantom Stock Plan Termination Payments and (8) the Holdback Amount;”

“(iii) to the Company, (1) the Breslo Incentive Payment, (2) the Nwankwo Bonus Payment and (3) the Phantom Stock Plan Termination Payments;”

(d) A new Section 1.6.2(c) is hereby added to the Purchase Agreement and shall read in its entirety as follows:

“(c) Deliveries by the Company. Sellers shall cause the Company to pay, in each case less any applicable withholding Taxes: (i) to Bill Breslo, the Breslo Incentive Payment; (ii) to Oji Nwankwo, the Nwankwo Bonus Payment; and (iii) to Kevin Kuske and Bryan Greene, their respective Phantom Stock Plan Termination Payments.”

(e) A new Section 1.7 is hereby added to the Purchase Agreement and shall read in its entirety as follows:

“1.7 Payment or Forfeiture of Holdback Amount. Buyer shall pay the Holdback Amount to Sellers as set forth on Schedule 1.2 on or prior to the tenth (10^th) Business Day immediately following the satisfaction or waiver of the Texas Clearance Event Conditions, subject to any offsets as provided by Section 9.15; provided, that, out of the Holdback Amount, if any, payable to Sellers pursuant to this Section 1.7 (the “Released Holdback Amount”), Buyer shall deduct therefrom prior to any payment to Sellers and make, or cause the Company to make, the following payments:

(i) an amount equal to 1.0% of the Released Holdback Amount to Wadley;

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(ii) an amount equal to 0.4286% of the Released Holdback Amount to Innovation (the Released Holdback Amount, net of such payments specified in this clause (ii) and the immediately preceding clause (i), the “Net Released Holdback Amount”);

(iii) in respect of the Breslo Incentive Plan, an amount equal to the sum of (x) 4.0% of the first $5,663,143.64 of the Net Released Holdback Amount plus (y) 4.5% of the Net Released Holdback Amount in excess of $5,663,143.64 to Bill Breslo, less any applicable withholding Tax;

(iv) in respect of Phantom Stock Awards terminated effective as of the Closing Date:

(1) an amount equal to (x) 0.8% of the first $492,882 of the Net Released Holdback Amount, plus (y)1.2% of the Net Released Holdback Amount between $492,883 and $4,481,646, plus (z)1.6% of the Net Released Holdback Amount in excess of $4,481,646, less any applicable withholding Tax, to Bryan Greene; and

(2) an amount equal to (x) 0.8% of the first $492,882 of the Net Released Holdback Amount, plus (y)1.2% of the Net Released Holdback Amount between $492,883 and $4,481,646, plus (z)1.6% of the Net Released Holdback Amount in excess of $4,481,646, less any applicable withholding Tax, to Kevin Kuske.

Notwithstanding anything to the contrary contained in this Section 1.7 or elsewhere in this Agreement, upon the occurrence of a Texas Event, and written notice from Buyer to the Sellers’ Representative of such occurrence: (i) Sellers shall immediately and automatically forfeit any right any of them may have to receive the Holdback Amount pursuant to this Agreement; (ii) the Purchase Price shall be deemed automatically reduced by the Holdback Amount; and (iii) Sellers shall have no entitlement, claim to, or interest in the Holdback Amount pursuant to this Agreement or otherwise.”

(f) A new Section 1.8 is hereby added to the Purchase Agreement and shall read in its entirety as follows:

“1.8 Actual Uncollected Receivables. If at any time on or prior to the one year anniversary of the Closing Date any Actual Uncollected Receivables shall be collected by the Company, then the Company shall pay to Sellers as set forth on Schedule 1.2, in cash by wire transfer of immediately available funds, an amount equal to such collections less all reasonable collection costs related to all Actual Uncollected Receivables which have not been previously deducted from any payment pursuant to this Section 1.8. The Company shall use its commercially reasonable efforts to collect such Actual Uncollected Receivables.”

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1.2 Amendment to Section 5 (Post-Closing Covenants). A new Section 5.3 is hereby added to the Purchase Agreement and shall read in its entirety as follows:

“5.3 Conveyance of Texas Equipment. On or prior to the tenth (10^th) Business Day following the Company’s termination of the Texas Lease upon or following the occurrence of a Texas Event, Buyer shall cause the Company to convey, transfer and assign to the Texas Lease Operator, for $1.00, the Texas Equipment, such Texas Equipment to be conveyed, transferred and assigned “as-is” and “where is”, free and clear of all Encumbrances, other than Permitted Encumbrances and Encumbrances created by the Texas Lease Operator or any of its Affiliates, with no warranties expressed or implied in respect of the Texas Equipment, pursuant to such documentation as may be necessary to effect such transfer. Concurrently with the transfer and conveyance of the Texas Equipment (the “Texas Conveyance”), Buyer shall cause the Company to grant to the Texas Lease Operator any fully paid up, royalty free, perpetual, non-sublicenseable, non-transferrable, non-assignable, limited license with respect to certain software necessary to operate the Texas Equipment in substantially the same manner as it was being operated by the Texas Lease Operator immediately prior to the Texas Conveyance, which license shall not, for the avoidance of doubt, including any source code (the “Texas License”). The Texas License shall relate solely to the operation of the Texas Equipment in operation as of the occurrence of the applicable Texas Event and no additional pieces of equipment may be added under the Texas License. The Texas License shall not require the Company to provide any ongoing support, maintenance, development or other services to the Texas Lease Operator. Buyer shall cause the Company to use its commercially reasonable efforts to obtain for the Texas Lease Operator any applicable third-party licenses necessary for ongoing support, maintenance and development services with respect to the software covered by the Texas License. Notwithstanding the foregoing, the Company shall not be required, and Buyer shall not be required to cause the Company, to grant the Texas License pursuant to this Section 5.3 if a Texas Regulatory Event has occurred. Notwithstanding anything to the contrary contained in this Section 5, the provisions of Sections 5.1.1, 5.2.1(a) and 5.2.1(c) shall not apply to Johnson solely with respect to Johnson’s business with the Tribe under the Texas Lease Tribal Agreement, as in effect on the Closing Date.”

1.3 Amendments to Section 6 (Conditions Precedent to Buyer’s Obligation to Close).

(a) New Sections 6.12 and 6.13 are hereby added to the Purchase Agreement and shall read their entirety as follows:

“6.12 Termination of Texas Tribal Agreement. Buyer shall have received written evidence, in form and substance satisfactory to Buyer, that the Texas Tribal Agreement has been terminated and is of no further force or effect.

6.13 Entry Into Texas Lease. The Texas Lease Operator shall have executed and delivered to the Company the Texas Lease.”

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1.4 Amendments to Section 9 (Indemnification).

(a) Section 9.1 is hereby amended as follows: (i) the word “or” is hereby deleted from the end of Section 9.1.1; (ii) the period is hereby deleted from the end of Section 9.1.2 and replaced with “; or”; (iii) a new Section 9.1.3 is hereby added to the Agreement and shall read in its entirety as set forth below; and (iv) Section 9.1.4 is hereby amended and restated to read in its entirety as set forth below:

“9.1.3 the Texas Action.

9.1.4 Sellers shall not be liable for the indemnification obligations pursuant to Section 9.1.1 or Section 10.3.1(c) until the aggregate amount of Losses with respect to matters referred to in Section 9.1.1 and Section 10.3.1(c) exceeds One Hundred Fifty Thousand Dollars ($150,000) (the “Deductible”), after which Sellers will be jointly and severally responsible for all Losses in excess of the Deductible up to a maximum aggregate amount of Losses equal to Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000) (the “Liability Cap”). Notwithstanding anything herein to the contrary, neither the Deductible nor the Liability Cap will apply (i) in the case of fraud, intentional misrepresentation or willful misconduct, (ii) with respect to any breach of Sections 2.1 (Organization and Predecessors), 2.2 (Capitalization and Title), 2.3 (Power and Authorization), 2.5(d) (Noncontravention), 2.10.1 (Ownership of Assets), 2.10.3 (Phone Card Business Assets and Liabilities), 2.17 (Employee Benefit Plans) or 2.28 (No Brokers), (iii) with respect to Sellers’ indemnification obligations pursuant to Section 9.1.2, (iv) with respect to Sellers’ indemnification obligations pursuant to Section 9.1.3 (for which Sellers will be jointly and severally responsible for all Losses up to a maximum aggregate amount of Losses equal to Seven Million Dollars ($7,000,000), and which Losses, prior to payment of the Holdback Amount in accordance with Section 1.7, shall be setoff against the Holdback Amount) or (v) with respect to Sellers’ indemnification obligations pursuant to Section 10.”

(b) A new Section 9.15 is hereby added to the Purchase Agreement and shall read in its entirety as follows:

“9.15 Right of Setoff. Upon notice to Sellers’ Representative specifying in reasonable detail the basis therefor, Buyer may set off in good faith any amount to which it may be entitled from Sellers against amounts otherwise payable, if any, under Section 1.7. The exercise of such right of setoff by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute a breach of this Agreement or any other agreement between Buyer or any of its Affiliates and Sellers. Neither the exercise nor failure to exercise such right of setoff will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it. Notwithstanding the foregoing, if Buyer sets off an amount pursuant to this Section 9.15 and it is later finally mutually determined by the parties or pursuant to Section 11.15 that such setoff amount was in excess of the amount which Sellers were required to indemnify Buyer, then Buyer shall pay interest to Sellers on such excess amount, for the period commencing on the date on which Buyer set off such amount to, but not including, the date on which Buyer pays such excess amount to Sellers, at the Prime Rate as published by the Wall Street Journal on the date such setoff was made, plus 100 basis points.”

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1.5 Amendment to Section 11 (Miscellaneous). Section 11.4 is hereby amended and restated to read in its entirety as follows:

“11.4 Succession and Assignment; No Third-Party Beneficiary. Subject to the immediately following sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, each of which successors and permitted assigns will be deemed to be a party hereto for all purposes hereof. No party may assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder (by operation of Law or otherwise) without the prior written approval of the other parties; provided, however, that Buyer may (a) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (b) designate one or more of its Affiliates to perform its obligations hereunder; provided, no such assignment or delegation shall relieve Buyer of its obligations hereunder. Except (i) for the Texas Lease Operator solely with respect to Section 5.3 and (ii) as expressly set forth in Section 9 with respect to Indemnified Persons who are not parties to this Agreement, this Agreement is for the sole benefit of the parties and their successors and permitted assignees and nothing herein expressed or implied will give or be construed to give any Person, other than the parties and such successors and assignees, any legal or equitable rights hereunder.”

1.6 Amendments to Section 12 (Definitions; Certain Rules of Construction).

(a) The following definitions are hereby added to Section 12.1 in the appropriate alphabetical order:

““Actual Uncollected Receivables” means all Excluded Receivables, which were not included in Actual Net Working Capital.”

““First Amendment” means that certain First Amendment to Stock Purchase Agreement, dated as of February 13, 2014, by and between Buyer, the Company and Sellers’ Representative.”

““Excluded Receivables” means those Accounts Receivable of the Company that, as of the Closing Date, are older than ninety (90) days.”

““Gardere Fees and Expenses” means all fees, costs, expenses and obligations incurred by or for the benefit of the Company and/or the Sellers and payable to Gardere Wynne Sewell LLP, in connection with: (a) the Texas Action; (b) the negotiation, preparation and review of this Agreement (including Sellers’ Disclosure Schedule), the Company Agreements and all agreements, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the Contemplated Transactions; (c) the preparation and submission of any filing or notice required to be made or given in connection with the Contemplated Transactions and obtaining any consent required to be obtained in connection with the Contemplated Transactions; or (d) otherwise in connection with the Contemplated Transactions, in each case of (a), (b), (c) and (d) to the extent such fees, costs and expenses are owing as of Closing Date.”

-6-

““Greene Phantom Stock Plan Termination Payment” means Sixteen Thousand Six Hundred Ten Dollars and 21 Cents ($16,610.21).”

““Holdback Amount” means Seven Million Dollars ($7,000,000).”

““Kuske Phantom Stock Plan Termination Payment” means Sixteen Thousand Six Hundred Ten Dollars ($16,610.21).”

““Nwankwo Bonus Payment” means Twenty-Five Thousand Dollars ($25,000).”

““Ontario Lease” means that certain Managed Services Agreement, effective as of August 22, 2012, by and between the Company and Ontario Lottery and Gaming Corporation.”

““Phantom Stock Plan Termination Payments” means, collectively, the Greene Phantom Stock Plan Termination Payment and the Kuske Phantom Stock Plan Termination Payment.”

““Texas Action” means Cause No. EP-99-CA-00320-KC, currently styled State of Texas v. Ysleta Del Sur Pueblo, The Tribal Council, Tribal Governor Francisco Paiz or his successor, Diamond Game Enterprises, Accelerated Marketing Solutions LLC, Winter Sky, LLC, and Excite Amusement, Inc., in the United States District Court, Western District of Texas, El Paso Division.”

““Texas Clearance Event” means any of the following: (i) the dismissal of the Texas Motion or Texas Action, which, in either case, shall not have been timely appealed or, if either the Texas Action or Texas Motion is dismissed without prejudice, the re-filing of either within the six (6)-month period immediately following such dismissal without prejudice; (ii) the final disposition of the Texas Motion or Texas Action by a court of competent jurisdiction, including any and all appeals, which permits continued operation of the Texas Equipment with or without commercially reasonable modifications to the Texas Equipment; (iii) any other legislative or regulatory event that permits the continued operation of the Texas Equipment with or without commercially reasonable modification to the Texas Equipment; or (iv) Buyer, in its sole discretion, delivers written notice to Sellers’ Representative that a Texas Clearance Event has occurred; provided, that, in the case of each of the immediately preceding clauses (ii) and (iii), (A) Buyer may deduct from the Holdback Amount all of the Company’s and Buyer’s actual costs for such commercially reasonable modifications and (B) after such commercially reasonable modifications, the Company may operate the Texas Equipment using substantially the same hardware as used by the Texas Lease Operator immediately prior to such commercially reasonable modifications.”

““Texas Clearance Event Conditions”” means the satisfaction or waiver, in Buyer’s sole discretion, of each of the following: (i) a Texas Clearance Event shall have occurred (and, in the case of the Texas Clearance Event described in clause (i) of such

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definition, there shall have been no timely appeal of the dismissal of the Texas Motion or Texas Action, or, if either the Texas Action or Texas Motion is dismissed without prejudice, the re-filing of either within the six (6)-month period immediately following such dismissal); (ii) the Texas Lease shall have terminated and shall be of no further force or effect; (iii) the Company shall have the right, free and clear of all Encumbrances (other than any Encumbrances created by the Company, Buyer, Amaya any of their respective Affiliates), to possess the Texas Equipment; and (iv) the Texas Lease Tribal Agreement shall have been duly assigned to the Company either (A) by the Texas Lease Operator or (B) automatically by operation of the Texas Lease Tribal Agreement in accordance with the terms thereof, together with any required consent by the YDSP Tribe, and the Texas Lease Operator shall thereafter have no rights or interest therein.”

““Texas Equipment” means all of the Company’s equipment and accessories leased to the Texas Lease Operator under the Texas Lease.”

““Texas Event” means any of the following: (i) the final disposition of the Texas Motion or Texas Action by a court of competent jurisdiction, including any and all appeals, pursuant to which the continued performance under the Texas Lease or otherwise in connection with the Company’s Business with or related to the YDSP Tribe is determined not to be permissible under applicable Law and there are no commercially reasonable modifications that can be made to the Texas Equipment that would make the operation of the Texas Equipment permissible under applicable Law; (ii) the Company, Buyer, Amaya or any of their respective Subsidiaries or Affiliates receives notice, whether written or oral, from any Governmental Authority, that the continued performance by the Company under the Texas Lease or otherwise in respect of its Business with or related to the YDSP Tribe would result in the denial, suspension or revocation of any Gaming Approval or Permit then held or applied for in good faith by any of the Company, Buyer, Amaya or any of their respective Subsidiaries or Affiliates and there are no commercially reasonable modifications that can be made to the Texas Equipment that would address such Governmental Authority’s concern such that the continued performance by the Company under the Texas Lease or otherwise in respect of its Business with or related to the YDSP Tribe would not result in a denial, suspension or revocation of such Gaming Approval or Permit by such Governmental Authority and Buyer either (x) provides a copy of such written notice to Sellers’ Representative or (y) provides Sellers’ Representative a commercially reasonable opportunity to verify any such oral notice and Buyer uses its commercially reasonable efforts to assist Seller’s Representative with such verification (provided that Sellers’ Representative’s inability to verify such oral notice, after such commercially reasonable opportunity and efforts by Buyer, shall not negate, in any respect, the fact that a Texas Event shall have occurred); or (iii) the Company’s continued performance under the Texas Lease or otherwise in connection with its Business with or related to the YDSP Tribe has become impermissible under applicable Law, whether due to a change in Law or applicable interpretation thereof by a Governmental Authority of competent jurisdiction, in either case occurring at any time after the date hereof and there are no commercially reasonable modifications that can be made to the Texas Equipment that permit the continued performance by the Company under the Texas Lease following such change in Law or applicable interpretation thereof.”

-8-

““Texas Lease” means that certain Equipment Lease Agreement, dated as of January 16, 2014, by and between the Company and the Texas Lease Operator in respect of the lease of the Texas Equipment.”

““Texas Lease Operator” means Blue Stone Entertainment LLC, a Washington limited liability company.”

““Texas Lease Tribal Agreement” means that certain agreement, dated as of January 16, 2014, by and between the Texas Lease Operator and the YDSP Tribe.”

““Texas Motion” means Plaintiff’s Third Amended Motion for Contempt for Violation of the September 27, 2001 Injunction (or any subsequent amendment thereto) filed by the State of Texas in the Texas Action.”

““Texas Regulatory Event” means (i) the Company, Buyer, Amaya or any of their respective Subsidiaries or Affiliates receives notice, whether written or oral, from any Governmental Authority, that the Company’s grant of, or performance under, the Texas License would result in the denial, suspension or revocation of any Gaming Approval or Permit then held or applied for in good faith by any of the Company, Buyer, Amaya or any of their respective Subsidiaries or Affiliates, and Buyer either (x) provides a copy of such written notice to Sellers’ Representative or (y) provides Sellers’ Representative a commercially reasonable opportunity to verify any such oral notice and Buyer uses its commercially reasonable efforts to assist Seller’s Representative with such verification (provided that Sellers’ Representative’s inability to verify such oral notice, after such commercially reasonable opportunity and efforts by Buyer, shall not negate, in any respect, the fact that a Texas Regulatory Event shall have occurred); or (ii) the Company’s grant of, or performance under, the Texas License has become impermissible under applicable Law, whether due to a change in Law or applicable interpretation thereof by a Governmental Authority of competent jurisdiction, in either case occurring at any time after the date hereof.””

““Texas Tribal Agreement” means that certain agreement, dated as of December 5, 2008, as amended, by and between the Company and the YDSP Tribe.”

““YDSP Tribe” means the Ysleta Del Sur Pueblo, a federally recognized Tribe.”

(b) The definition of “Net Working Capital” contained in Section 12.1 is hereby amended and restated to read in its entirety as follows:

““Net Working Capital” means as of any particular date (a) the value of all of the Company’s current Assets plus $874,942.90, less (b) the amount of all of the Company’s current Liabilities, including accrued current Liabilities not yet due, all as determined in accordance with GAAP; provided, however, that:

(A) (i) the current portion of Qualified Machine Indebtedness and (ii) the current portion under the Breslo Incentive Plan shall, in each case, shall be excluded from the calculation of Net Working Capital;

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(B) all accrued and unpaid interest on Debt incurred by the Company under the Equipment Placement Draw Down Facility shall be included as a current Liability;

(C) Accounts Receivable shall not include any Excluded Receivables;

(D) Accounts Receivable shall not include any Receivables under leases in respect of periods ending after the Closing Date; and

(E) current Liabilities shall not include Liabilities for unearned income under the Ontario Lease.

Net Working Capital shall be determined on a basis consistent with the Working Capital Calculation, taking into account the definition of “Net Working Capital” as amended by the First Amendment.”

1.7 Miscellaneous Amendments.

(a) All cross references contained in the Purchase Agreement that refer to Section 9.1.3 shall instead refer to Section 9.1.4.

ARTICLE II

LIMITED MUTUAL RELEASE

2.1 Subject to the proviso contained at the end of this sentence, each Party does hereby knowingly and voluntarily release, acquit and forever discharge each other Party from any and all claims and liabilities of whatever nature arising from or as a result of any such Party’s breach of any representation and warranty, covenant, or other agreement contained in this Agreement or in that certain Credit Agreement dated June 10, 2013 by and between the Company and Amaya (the “Credit Agreement”), and each Party hereby waives any such breaches under this Agreement or the Credit Agreement; provided, however, that the foregoing release, acquittal, discharge and waiver relates solely to breaches that occurred prior to the date hereof and which arose out of or related to the Texas Action.

ARTICLE III

MISCELLANEOUS

3.1 Counterparts; Execution. This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute but one and the same instrument. This Amendment will become effective when duly executed by each party hereto. Facsimile or other electronically scanned and transmitted signatures (including by email attachment) shall be deemed originals and shall constitute valid execution and acceptance of this Amendment by the signing/transmitting party.

3.2 No Other Amendments. Except as specifically amended hereby, the Purchase Agreement is and remains unmodified and in full force and effect and is hereby ratified and confirmed.

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3.3 Governing Law. This Amendment, the rights of the parties and all Actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

3.4 Jurisdiction; Venue; Service of Process.

(a) Jurisdiction. Each party, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Courts located in New York, NY for the purpose of any Action between the parties arising in whole or in part under or in connection with this Amendment, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Amendment or the subject matter hereof may not be enforced in or by such court and (c) hereby agrees not to commence any such Action other than before one of the above-named courts. Notwithstanding the previous sentence a party may commence any Action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

(b) Venue. Each party agrees that for any Action between the parties arising in whole or in part under or in connection with this Amendment, such party will bring Actions only in New York, NY. Each party further waives any claim and will not assert that venue should properly lie in any other location within the selected jurisdiction.

(c) Service of Process. Each party hereby (a) consents to service of process in any Action between the parties arising in whole or in part under or in connection with this Amendment in any manner permitted by New York law, (b) agrees that service of process made in accordance with clause (a) or made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 11.1 of the Purchase Agreement, will constitute good and valid service of process in any such Action (including, with respect to each Seller that notice need only be given to Sellers’ Representative) and (c) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with clause (a) or (b) does not constitute good and valid service of process.

3.5 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,

-11-

TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY ACTION WHATSOEVER BETWEEN OR AMONG THEM RELATING TO THIS AMENDMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHICH ACTION WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

3.6 Section References. Unless explicitly stated otherwise, references to “Sections” or a “Section” refer to Sections or a Section of the Purchase Agreement.

[signature page follows]

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IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Amendment as of the date first set forth above.


BUYER:

AMAYA AMERICAS CORPORATION

By:		(signed)
Name:		Daniel Sebag
Title:		Authorized Representative

SELLERS’ REPRESENTATIVE:

(signed)
Roy Johnson, as Sellers’ Representative

COMPANY:

DIAMOND GAME ENTERPRISES

By:		(signed)
Name:		James Breslo
Title:		President and CEO

Acknowledged and Agreed by Sellers:

(signed)

James Breslo

(signed)

Roy Johnson

EX-99.48

Exhibit 99.48

REVENUE GUARANTEE AGREEMENT

THIS AGREEMENT made as of February 11th, 2014;

B E T W E E N:

AMAYA GAMING GROUP INC., a corporation incorporated under the laws of Quebec (“Amaya Gaming”),

- and -

CRYPTOLOGIC MALTA HOLDINGS LIMITED, a corporation incorporated under the laws of Malta (“CMH”),

- and -

GAMING PORTALS LIMITED, a limited liability company formed and registered in Ireland (Number 444178) having its registered office at 3rd Floor, Marine House, Clanwilliam Place, Dublin, 2, Ireland (“GPL”),

- and -

AMAYA (MALTA) LIMITED, a body corporate bearing registration number C35153 and having its registered office at The Emporium, Level 4, St. Louis Street, Msida, MSD 1421, Malta (“Amaya Malta”),

- and -

ONGAME NETWORK LTD., a limited liability company incorporated under the laws of Gibraltar and bearing registration number 89063 and having its registered office at 57/63 Line Wall Road, Gibraltar (“Ongame”);

(collectively “Amaya”)

- and -

CRYPTOLOGIC OPERATIONS LIMITED, limited liability company bearing registration number X39358 and having its registered office at Vincenti Buildings, Suite 357, 28/19 Strait Street, Valetta, VLT 1432, Malta;

(hereinafter “COL”)

WHEREAS by an amended and restated share purchase agreement dated November 13, 2013 (the “SPA”), CMH sold and Goldstar Acquistion Co. (“Goldstar”) purchased all of the issued and outstanding shares of WagerLogic Malta Holdings Ltd. (“Wagerlogic”), including its wholly owned subsidiaries WagerLogic Alderney Limited and COL, as a part of the acquisition by Goldstar of the Purchased Gaming Sites operated by Amaya through its subsidiaries;

AND WHEREAS by a services and license agreement of even date with this Agreement (the “Services and License Agreement”), GPL and Amaya Malta, as Licensor, have agreed collectively to provide certain software and services to COL for the continued operation of the Purchased Gaming Sites, including provision of the “Amaya Game Office” (AGO) Platform and the Online Games made available through that Platform;

AND WHEREAS Amaya collectively stand to benefit from the SPA and the Services and License Agreement;

AND WHEREAS it was a condition of the SPA that the parties to this Agreement enter into a revenue guarantee and protection agreement pursuant to the terms and conditions hereinafter set forth;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

1.1

Definitions

(1) In this Agreement, unless something in the subject matter or context is inconsistent therewith:

(a)

“Agreement” means this agreement, including its recitals and schedules, all as amended from time to time.

(b)

“Business Day” means a day when banks are open for business in all of Malta, Ireland and Canada.

(c)

“Guaranteed Obligations” has the meaning set out in Section 3.1.

(d)

“Guarantor” means each of Amaya Gaming, CMH, GPL and Amaya Malta.

(e)

“Licensee” means COL or its permitted assignee under the Services and License Agreement.

(f)

“Licensor” means collectively GPL and Amaya Malta.

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(g)

“Liquidated Damages” has the meaning set out in Section 2.3(1).

(h)

“Minimum Revenue Guarantee” means USD $19,000,000 in respect of each year during the Minimum Revenue Guarantee Period.

(i)

“Minimum Revenue Guarantee Payment” has the meaning set out in Section 2.2(1).

(j)

“Minimum Revenue Guarantee Period” means only the two (2) year period immediately following the Closing Date.

(k)

“Minimum Revenue Guarantee Refund” has the meaning set out in Section 2.2(2).

(l)

“Quarter” means a calendar quarter, except that any stub period at the beginning or end of an applicable period shall be deemed to be a Quarter, and “Quarterly” shall have a corresponding meaning.

(m)

“Quarterly Minimum Revenue Guarantee” means USD $4,750,000 in respect of each Quarter during the Minimum Revenue Guarantee Period and for each such Quarter that is a stub period means the applicable proportion of USD $4,750,000.

(n)

“Revenue” in relation to any Month means the sum of (i) Wagers minus Winnings in respect of such Month for all Gaming Sites that are not Independent White Label Gaming Sites less Jackpot Adjustment, Refunds, Chargebacks, the dollar value of any Deposit Bonuses, tournament fees, Affiliate Commissions (only up to a maximum of three million five hundred thousand dollars ($3,500,000.00) in each year of the Term) and Taxes incurred, generated or accrued during the Month for such Gaming Sites, and (ii) the gross revenues actually received by Licensee or its Affiliates during that Month from White Label Parties who operate Independent White Label Gaming Sites.

(o)

“Services and License Agreement” has the meaning set out in the recitals above.

(p)

“Service Level Agreement” means that agreement of even date with this Agreement entered into by Licensor and Licensee setting out the level of maintenance and support services to be provided under the Services and License Agreement.

(q)

“SPA” means the share purchase agreement referenced in the recitals above.

(2) All capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the Services and License Agreement.

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ARTICLE 2

REVENUE PROTECTION

2.1

Joint and Several Liability

The liability of each of Amaya Gaming, CMH, GPL and Amaya Malta under this Agreement is joint and several and a separate claim or claims may be brought against any of them, whether or not a claim is made against any other, and whether or not the others are joined in any such claim.

2.2

Minimum Revenue Guarantee

(1) During the Minimum Revenue Guarantee Period, but subject to the provisions of subsection (2) below, Amaya shall pay to Licensee, on a Quarterly basis, an amount equal to the shortfall, if any, between the Quarterly Minimum Revenue Guarantee and the Revenue for that Quarter (the “Minimum Revenue Guarantee Payment”), except if that shortfall is caused by the termination of the Services and License Agreement in accordance with Section 18.1 or Section 18.2 of the Services and License Agreement.

(2) In any Quarter immediately following a Quarter in respect of which a Minimum Revenue Guarantee Payment was made pursuant to the provisions of subsection (1) above, but not in the first Quarter following an annual reconciliation completed pursuant to the provisions of subsection (3) below, Licensee will pay to Licensor a refund equal to the amount by which, if any, the Revenue for that subsequent Quarter exceeds the Quarterly Minimum Revenue Guarantee, but only to a maximum amount of the Minimum Revenue Guarantee Payment that was received by Licensee in respect of the immediately preceding Quarter (the “Minimum Revenue Guarantee Refund”).

(3) At the end of each calendar year that occurs during the Minimum Revenue Guarantee Period, and at the end of the Minimum Revenue Guarantee Period, the Licensor and Licensee will perform a reconciliation whereby Licensee shall pay to Licensor the amount by which, if any, the sum of the Revenue and the Minimum Revenue Guarantee Payment for the reconciliation period exceeds the Minimum Revenue Guarantee as applicable for that reconciliation period.

2.3

Liquidated Damages

(1) If Licensor terminates the Services and License Agreement on any basis other than the grounds expressly permitted by Sections 18.1 to 18.3 of the Services and License Agreement, then Amaya shall pay to Licensee the following amount as liquidated damages and not as a penalty (the “Liquidated Damages”):

(a)

USD $30,000,000 if such termination occurs at any time during any of the first (1^st), second (2^nd) or third (3^rd) years following the Closing Date;

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(b)

USD $20,000,000 if such termination occurs at any time during the (4^th) year following the Closing Date; or

(c)

USD $10,000,000 if such termination occurs at any time during the fifth (5^th) year following the Closing Date.

(2) Notwithstanding Section 2.4 below, where Liquidated Damages are payable for termination of the Services and License Agreement during the Minimum Revenue Guarantee Period, the Liquidated Damages payable are in addition to any Minimum Revenue Guarantee Payments that would be required to be made for the Minimum Revenue Guarantee Period.

(3) Where Liquidated Damages are payable for a termination of the Services and License Agreement that occurs following the Minimum Revenue Guarantee Period, the Liquidated Damages payable shall be reduced by the amount of damages, if any, arising from a breach by Licensor of any of the provisions of Sections 18.3 to 18.7 of the Services and License Agreement and that have already paid by Amaya to Licensee.

2.4

Liquidated Damages are Exclusive Remedies

(1) Subject to subsection 2.3(2) above, the remedies set forth in Section 2.3 are exclusive and not cumulative, and constitute the only remedies of the Licensee in relation to the termination of the Services and License Agreement in its entirety. Licensee hereby waives any further claim it may have against the Licensor in relation to such termination of the Services and License Agreement.

(2) Except if Liquidated Damages are payable pursuant to the provisions of Section 18.8 of the Services and License Agreement or Section 2.3 of this Agreement, nothing in this Section 2.4 or Agreement precludes or otherwise affects the exercise by Licensee of any right or remedy, available at law or in equity or otherwise, for the suspension or termination by Licensor of access to the Platform or to any applicable Online Games, in one or more applicable jurisdictions, other than in accordance with Section 18.3 of the Services and License Agreement.

2.5

Payments

All amounts to be paid pursuant to this Article 2 shall be paid in immediately available funds by wire transfer within thirty (30) Business Days following the end of the Quarter, the applicable reconciliation period or the Liquidated Damages event in respect of which the payment is required to be made.

ARTICLE 3

GUARANTEE

3.1

Guarantee

Each Guarantor hereby unconditionally and irrevocably guarantees payment of all of the monetary debts and liabilities, present or future, direct or indirect,

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absolute or contingent, at any time owing or remaining unpaid by the Licensor to Licensee pursuant to or in connection with the Services and License Agreement, including without limitation payment of any damages awarded against Licensor for breach of the Services and License Agreement, and by each other Guarantor to COL pursuant to Article 2 of this Agreement (hereinafter collectively referred to as the “Guaranteed Obligations”) and waives all defenses to the enforceability of the guarantee contained herein.

3.2

Indemnity

If any or all of the Guaranteed Obligations are not paid when due and are not recoverable under Section 3.1, each Guarantor will, as a separate and distinct obligation, indemnify and save harmless Licensee from the failure of the Licensor or any Guarantor to pay such Guaranteed Obligations; for greater certainty, it is agreed that this indemnity (i) will not extend beyond any losses, expenses, debt or liability not forming part of the Guaranteed Obligations including, without limitation, attorney fees and legal costs (except to the extent that such attorney fees and legal costs form a part of any damages awarded against Licensor for breach of the Services and License Agreement and therefore form a part of the Guaranteed Obligations), and (ii) the Guaranteed Obligations are subject to the limitations of liability set forth in Section 20 of the Services and License Agreement and this indemnity cannot be interpreted as giving rise to an indemnified claim for the purpose of the limitations of liability.

3.3

No Release

Except expressly agreed to in writing, the liability of the Guarantors under this Agreement will not be released, discharged, limited or in any way affected by anything done, suffered or permitted by Licensee in connection with any duties or liabilities of the Licensor or any other Guarantor. Without limiting the generality of the foregoing, and without releasing, discharging, limiting or otherwise affecting in whole or in part any Guarantor’s liability under this Agreement, without obtaining the consent of or giving notice to the Guarantors, Licensee may:

(a)

grant time, renewals, extensions, indulgences, releases and discharges to the Licensor or any other Guarantor;

(b)

accept compromises from the Licensor or any other Guarantor; and

(c)

apply all money at any time received from the Licensor or any other Guarantor as Licensee may see fit or change any such application in whole or in part from time to time as Licensee may see fit.

3.4

No Exhaustion of Remedies

Licensee will not be bound or obligated to exhaust its recourse against the Licensor, or any other Guarantor, or other persons, or any securities or collateral it may hold, or to take any other action, before being entitled to demand payment of the Guaranteed Obligations from a Guarantor.

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3.5

Continuing Guarantee

The liability of each Guarantor under this Agreement will continue until the expiry of the latter of: (i) the Term of the Services and License Agreement; (ii) the expiry of the last of the limitation periods permitting a claim by Licensee against Amaya under this Agreement or against Licensor under the Services and License Agreement under Applicable Law; or (iii) the expiry of the right to contest, object or appeal, under Applicable Law, an assessment, award or decision in respect of a claim by Licensee against Amaya under this Agreement or against Licensor under the Services and License Agreement.

3.6

Subrogation

Each Guarantor will not be entitled to subrogation until (i) such Guarantor makes payment to Liensee of all amounts owing by such Guarantor to Licensee under this Agreement and (ii) the Guaranteed Obligations are paid in full. Thereafter, Licensee will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation and warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations and any security held therefor resulting from such payment by such Guarantor.

ARTICLE 4

GENERAL

4.1

Dispute Resolution and Arbitration

The parties shall resolve any dispute, claim, difference or controversy arising between the parties out of or related to this Agreement (other than a dispute, claim, difference or controversy with respect to the commencement of an action for injunctive or other equitable relief) through such dispute resolution and arbitration provisions agreed to in the Services and License Agreement.

4.2

Executed Copy

Each Guarantor acknowledges receipt of a fully executed copy of this Agreement.

4.3

Benefit of the Agreement

This Agreement shall enure to the benefit of and be binding upon the respective heirs, executors, administrators, other legal representatives, successors and permitted assigns of the parties.

4.4

Entire Agreement

This Agreement and the guarantee of Amaya Gaming granted herein constitutes the entire agreement between Amaya Gaming and Licensee with respect to the

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subject matter of this Agreement and cancels and supersedes any prior understandings and agreements between them with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, (i) between Amaya Gaming and Licensee except as expressly set forth in this Agreement, (ii) between Licensor and Licensee regarding the subject matter of this Agreement except as expressly set forth in this Agreement and in the Services and License Agreement, and (iii) between CMH and Licensee regarding the subject matter of this Agreement except as expressly set forth in this Agreement and in the SPA. Neither party will be bound by any representations or promises unless set forth in this Agreement, the Services and License Agreement or the SPA. Possession of this Agreement by Licensee will be conclusive evidence against the Guarantors that this Agreement and the guarantees herein were not delivered in escrow or pursuant to any agreement such that they would not be effective until any condition precedent or subsequent has been complied with.

4.5

Amendments and Waivers

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by all of the parties hereto. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.

4.6

Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery (including courier) or by electronic means of communication addressed to the recipient as follows:


To:		Amaya Gaming Group Inc.

7600 Trans- Canada Highway
Pointe-Claire, Quebec
H9R-1C8

Fax No.:		514-744-5114
Email:		Daniel.sebag@amayagaming.com

Attention:		Daniel Sebag

To:		Cryptologic Malta Holdings Limited

c/o Paul Dever
Marine House, 3rd floor
Clanwilliam Place
Dublin 2, Ireland

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With a copy to:

Osler, Hoskin & Harcourt LLP
1000 De La Gauchetière Street West
Suite 2100
Montréal QC H3B 4W5

Attention: Me Eric Levy

Fax: (514) 904-8101

To:		Gaming Portals Limited

3rd Floor, Marine House
Clanwilliam Place, Dublin, 2,
Ireland

Fax No.:		00353 1 661 9637
Attention:		General Counsel

And copy by email to:

Attn: Eleanor Keogan
Email: eleanor.keogan@cryptologic.com

To:		Amaya (Malta) Limited
The Emporium, Level 4
St. Louis Street, Msida, MSD 1421
Malta

Fax No.:		n/a
Email:		paul.dever@amayagaming.com

Attention:		Paul Dever

To:		Cryptologic Operations Limited

Attn: Keith Laslop and Navin Khanna
320 Bay Street
Suite 1600
Toronto ON M5H 4A6

Email: keith@laslop.com

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And copy to:

Attn: Paul Pathak
Chitiz Pathak LLP
320 Bay Street
Suite 1600
Toronto ON M5H 4A6

Fax: 416-368-0300

or to such other address, individual or electronic communication number as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery and if given by electronic communication, on the day of transmittal if given during the normal business hours of the recipient and on the business day during which such normal business hours next occur if not given during such hours on any day.

4.7

Severability

If any one or more provisions contained in this Agreement should be held by a court or other tribunal to be invalid, illegal or otherwise unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way

4.8

Governing Law

This Agreement is governed by and will be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein, without giving effect to any choice or conflict of law provision or rule that would cause the application of any laws of any jurisdiction other than that of the Province of Ontario, Canada.

4.9

Attornment

For the purpose of all legal proceedings this Agreement will be deemed to have been performed in the Province of Ontario and the courts of the Province of Ontario will have jurisdiction to entertain any action arising under this Agreement.

4.10

Counterparts

This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument and notwithstanding their date of execution, shall be deemed to bear the date set out above.

[Signature Page Follows]

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IN WITNESS WHEREOF the parties have executed this Agreement.


AMAYA GAMING GROUP INC.

Per:		“Daniel Sebag”
Name:		Daniel Sebag
Title:		Chief Financial Officer

CRYPTOLOGIC MALTA HOLDINGS LIMITED

Per:		“Monroe Schmidt”
Name:		Monroe Schmidt
Title:		Director

GAMING PORTALS LIMITED

Per:		“Paul Dever”
Name:		Paul Dever
Title:		Director

AMAYA (MALTA) LIMITED

Per:		“Monroe Schmidt”
Name:		Monroe Schmidt
Title:		Director

CRYPTOLOGIC OPERATIONS LIMITED

Per:		“Monroe Schmidt”
Name:		Monroe Schmidt
Title:		Director

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EX-99.49

Exhibit 99.49

EXECUTION VERSION

DATED JUNE 12, 2014

AMAYA GAMING GROUP INC.

AND

AMAYA HOLDINGS B.V.

AND

TITAN IOM MERGERCO LTD

AND

OLDFORD GROUP LIMITED

AND

EACH OF THE WARRANTING SELLERS LISTED

SCHEDULE 1, PART 4, PARAGRAPH 1

AND

IGAL MARK SCHEINBERG,

AS THE SELLERS’ REPRESENTATIVE

DEED AND SCHEME OF MERGER

TABLE OF CONTENTS


1.	DEFINITIONS AND INTERPRETATION	2

2.	THE MERGER	24

3.	MERGER CONSIDERATION	30

4.	CONDITIONS TO COMPLETION	40

5.	INTERIM PERIOD COVENANTS OF THE PARTIES	41

6.	COMPLETION	41

7.	WARRANTIES	41

8.	TERMINATION	43

9.	INDEMNIFICATION	51

10.	CERTAIN COVENANTS	60

11.	RESTRICTIONS ON WARRANTING SELLERS’ BUSINESS ACTIVITIES	64

12.	ENTIRE AGREEMENT	66

13.	INVALIDITY	66

14.	AMENDMENTS, WAIVERS AND RIGHTS	66

15.	ASSIGNMENT	67

16.	THIRD PARTY RIGHTS	67

17.	NOTICES	68

18.	COUNTERPARTS	70

19.	GOVERNING LAW AND JURISDICTION	70

20.	FEES AND COSTS	72

21.	AGENT FOR SERVICE OF PROCESS	72

22.	NON-RECOURSE	75

23.	EXECUTION	75

SCHEDULE 1 KEY INFORMATION		76

SCHEDULE 2 EXAMPLES OF POST-COMPLETION MERGER CONSIDERATION ADJUSTMENT CALCULATIONS		81

SCHEDULE 3 CONDITIONS		82

SCHEDULE 4 CONDUCT DURING INTERIM PERIOD		84

SCHEDULE 5 COMPLETION ARRANGEMENTS		98

SCHEDULE 6 WARRANTIES		100

SCHEDULE 7 TAX COVENANTS		137

Exhibits


Exhibit A-1		Voting Agreement
Exhibit A-2		Form of Scheme of Merger
Exhibit A-3		Form of Amended and Restated M&A of Association of Oldford
Exhibit A-4		Form of Letter of Transmittal
Exhibit B-1		Condition Requirement
Exhibit B-2		Initial Deposit Amount
Exhibit B-3		Initial Long Stop Date
Exhibit B-4		Final Long Stop Date
Exhibit B-5		Refund Threshold
Exhibit C		Deferred Payment Adjustment
Exhibit D		[Reserved]
Exhibit E		List of Senior Officer Agreements
Exhibit F		[Reserved]
Exhibit G		2014 Business Plan
Exhibit H		Form of Completion Certificate
Exhibit I		Form of Indemnity Escrow Agreement
Exhibit J		[Reserved]
Exhibit K		Form of Final Completion Statement
Exhibit L		Form of Indemnity Letters for the persons listed therein
Exhibit M		[Reserved]
Exhibit N		Non-disparaged Persons
Exhibit O		[Reserved]
Exhibit P		List of Resigning Directors and Officers of the Oldford Group Companies
Exhibit 3.1.1(a)		Jurisdictions In Which Written Threats Are Applicable
Exhibit 3.1.1(b)		Excluded Jurisdictions
Exhibit 3.1.3		Relevant Authority Consents
Exhibit 4.3.3(c)		Jurisdictions where Buyer is Licensed and the Oldford Group Companies Are Not

THIS DEED AND SCHEME OF MERGER (this “Deed”) is dated June 12, 2014 and made by and among:

(1)	AMAYA HOLDINGS B.V., a limited liability company incorporated under the laws of the Netherlands (registered number 60755814) whose registered office is at Martinus Nijhofflaan 2, 2624 ES Delft, the Netherlands, which is an indirect wholly owned subsidiary of Buyer Parent (the “Buyer”);

(2)	AMAYA GAMING GROUP INC., a company incorporated under the laws of Quebec (registered number 1162017413) whose registered office is at 7600 Trans-Canada Highway, Pointe-Claire, Quebec, H9R 1C8, Canada (the “Buyer Parent”);

(3)	TITAN IOM MERGERCO LTD, a company limited by shares incorporated under the laws of the Isle of Man (registered number 011133V) whose registered office is at Fort Anne Douglas Isle of Man, IM1 5PD and which is wholly owned by Buyer (“Merger Sub”);

(4)	OLDFORD GROUP LIMITED, a company limited by shares continued under the laws of the Isle of Man (registered number 010483V) whose registered office is at Douglas Bay Complex, King Edward Road, Onchan Isle of Man, IM3 1DZ (“Oldford”);

(5)	the persons whose names and addresses are set out in Schedule 1, part 4, paragraph 1, column 1 (each, a “Warranting Seller” and together, the “Warranting Sellers”); and

(6)	Igal Mark Scheinberg whose principal address is as set forth in clause 17.3 (the “Sellers’ Representative”).

INTRODUCTION

(A)	Further details of Oldford are set out in Schedule 1, part 1.

(B)	Oldford operates the Business.

(C)	On the terms and subject to the conditions set forth in this Deed, Buyer desires to cause Merger Sub to merge with and into Oldford, with Oldford being the surviving company in accordance with the Companies Act and a wholly owned subsidiary of Buyer (the “Merger”).

(D)

The respective Boards of Directors of Merger Sub and Oldford have unanimously determined that this Deed and the Contemplated Transactions, including the Merger, are advisable, fair to and in the best interest of their respective shareholders, and such Boards of Directors have unanimously approved this Deed and the Contemplated Transactions, including the Scheme of Merger, in accordance with Section 153 of the Companies Act, including for purposes of Section 153(3) thereunder, and each such Board of Directors has recommended to its company’s shareholders that they approve this Deed and the Contemplated Transactions, including the Scheme of Merger.

(E)	Buyer, as the sole shareholder of Merger Sub, has approved this Deed, including the Scheme of Merger.

(F)	On the date hereof, Buyer and the Warranting Sellers have entered into that certain voting agreement in the form attached hereto as Exhibit A-1 (the “Voting Agreement”).

IT IS AGREED THAT:

1.	DEFINITIONS AND INTERPRETATION

1.1

Defined terms

In this Deed and the Introduction:

“Accounts” means the audited consolidated financial statements of Oldford for the accounting reference period ended on each of the three consecutive accounting reference periods, the last of which ended on the Accounts Date, which financial statements each comprise a balance sheet, income statement and retained earnings, cash flow statement, and notes, auditor’s and directors’ reports, true and correct copies of which are included in the Data Room.

“Accounts Date” means December 31, 2013.

“Accounts Receivable” means the aggregate amount of accounts, commissions and debts payable to the Oldford Group Companies. For all purposes hereunder, Accounts Receivable shall be valued in accordance with IFRS at their net realisable value, net of an allowance for bad debt.

“Action” means any claim, action or suit, litigation (whether at law or in equity, whether civil or criminal), assessment, arbitration, hearing, charge, complaint, demand, or proceeding to, from, by or before any Relevant Authority.

“Affiliate” means, with respect to any person, any other person that, alone or together with any Affiliate of such other person, directly or indirectly through one or more intermediaries, controls, is controlled by or under common control with, such person. For purpose of this definition, “control”, as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such person, whether through the ownership of voting securities, by Contractual Obligation or otherwise.

“Brand Ambassador” means any person that has entered into an endorsement, sponsorship or similar agreement with an Oldford Group Company that requires aggregate payments from such Oldford Group Company in excess of $[*****] per calendar year, or any lump sum payment in excess of $[*****].

“Business” means the business of Oldford, namely operating (a) online poker, (b) land-based poker tournaments, (c) online casino and (d) social games, in each case primarily under the PokerStars and FullTilt brands, and all related businesses and ancillary activities.

“Business Day” means a day (not being a Saturday or Sunday) when banks generally are open in (a) the City of London, United Kingdom; (b) Montreal, Province of Quebec, Canada; (c) New York, New York, United States of America; and (d) the Isle of Man, for the transaction of general banking business.

“Buyer Credit Agreements” means the Definitive Agreements arranging for secured debt facilities, in connection with the Financing.

“Cash” means, as of any date of determination, the aggregate amount of the Oldford Group Companies’ immediately available cash and cash equivalents, in each case as determined in accordance with IFRS, plus any accrued interest on any such cash and cash equivalents. For purposes of this definition, “Cash” shall exclude any players’ deposits owed to any customer or player by any Oldford Group Company.

“CA Firm” means PriceWaterhouseCoopers LLP, or, if it is not available for the applicable assignment pursuant to this Deed, another “Big 4” accounting firm or such other internationally recognised accounting firm (which must be an accounting firm of international recognition with at least 100 partners and offices in at least five jurisdictions other than the US) mutually satisfactory to the Sellers’ Representative and Buyer. In the event that the Sellers’ Representative and Buyer are not able to agree on the identity of a CA Firm within 10

Business Days from the date on which any of them has approached the other in writing asking to appoint such firm pursuant to clause 3.5 or clause 3.6, then each of the Sellers’ Representative or Buyer shall be entitled to refer to the president of the Institute of Chartered Accountants in England and Wales who shall nominate one of the aforementioned accounting firms to act as the CA Firm.

“Companies Act” means the Isle of Man Companies Act 2006.

“Company Intellectual Property” means, collectively, Company Owned Intellectual Property and Company Licenced Intellectual Property.

“Company Licenced Intellectual Property” means any Intellectual Property that is required for the operation of the Business and is the subject of: (a) a grant by any Oldford Group Company to another person (including any Joint Venture) of any right relating to or under any Intellectual Property related to the Business, which may include any grant of any right relating to or under Company Owned Intellectual Property (including any registered Intellectual Property and unregistered Intellectual Property); or (b) a grant by another person (including any Joint Venture) to any Oldford Group Company of any right relating to or under any third party’s Intellectual Property related to the Business (excluding commercial off-the-shelf Software programs that are readily available).

“Company Owned Intellectual Property” means all Intellectual Property owned by any Oldford Group Company in whole or in part.

“Competing Business” means any person or business that (a) competes with the Business (including for this purpose, the conduct of an online sportsbook), as contemplated in the 2014 Business Plan or during the 12 months prior to the date of this Deed, or (b) engages in land-based casino operations, or, in the case of each of (a) and (b), provides any services that assist in the foregoing.

“Completion” means the consummation of the Merger in accordance with this Deed.

“Completion Date” means (a) the date that is five Business Days after the date on which the last of the Conditions is satisfied or waived by the party who is entitled to waive them (other than delivery of items to be delivered at Completion and other than satisfaction of those Conditions that by their nature are to be satisfied at Completion, it being understood that the occurrence of Completion shall remain subject to the delivery of such items and the satisfaction or waiver of such Conditions at Completion), or (b) such other date as may be agreed in writing between Buyer and the Sellers’ Representative. The date on which the Effective Time actually occurs is also referred to in this Deed as the “Completion Date”.

“Computer Contract” means any Contractual Obligation between an Oldford Group Company and any other person (including another Oldford Group Company or any source code deposit agent) that is required for the operation of the Business, pursuant to which such other person provides an element of, or a service relating to, the Computer Systems.

“Computer Systems” means the aggregate Software, hardware and information and communication technology used by the Oldford Group Companies that are required for the operation of the Business, and all components of any of them.

“Condition” means a condition precedent to Completion set out in Schedule 3 and “Conditions” means all of those conditions.

“Condition Requirement” shall have the meaning set forth in Exhibit B-1.

“Confidential Information” means all information used in or otherwise relating to the Business, including confidential Know-How and other information relating to: (a) the organisation, business, personnel, financial, Tax or other affairs of the Business; (b) the marketing of any products or services, including advertising or other promotional materials; (c) future projects, business development or planning, commercial relationships and negotiations; and (d) research and development projects, in each case, which have not been released into the public domain.

“Confirmed Completion Date Purchase Price” means an amount equal to the sum of the following:

(a)

the Cash Completion Date Amount; minus

(b)

the Confirmed Debt; minus

(c)

if the Confirmed Net Working Capital is less than the Confirmed Reference Working Capital Amount, the difference between the Confirmed Reference Working Capital Amount and the Confirmed Net Working Capital; plus

(d)

if the Confirmed Net Working Capital is greater than the Confirmed Reference Working Capital Amount, the difference between the Confirmed Net Working Capital and the Confirmed Reference Working Capital Amount; plus

(e)

the Confirmed Other Adjustments Amount.

“Confirmed Per Share Completion Date Merger Consideration” means an amount equal to the quotient of (a) the Confirmed Completion Date Purchase Price divided by (b) the number of Participating Shares.

“Consents” shall mean consents, approvals, authorisations, permissions, clearances, no-action letters, exemptions, written notices relating to the foregoing or the expiration or termination of any prescribed waiting period.

“Consultant” means any person who is engaged as a consultant, independent contractor, service provider and the like on a substantial or exclusive basis and is contractually defined as an independent contractor, but excepting professional service providers, including legal, financial, accountancy, lobbying and public relations services firms.

“Contemplated Transactions” means the transactions contemplated by the Transaction Documents, including the Merger.

“Contractual Obligation” means, with respect to any person, any contract, agreement, deed, mortgage, lease, licence, commitment, obligation, undertaking, arrangement, performance bond, warranty obligation or similar understanding, whether written or oral, or other document or instrument (including any document or instrument evidencing or otherwise relating to any Debt), to which or by which such person is a party or otherwise subject or bound or to which or by which any property, business, operation or right of such person is subject or bound.

“Current Assets” means the aggregate amount of current assets of Oldford (on a consolidated basis), calculated in accordance with IFRS; provided, that, “Current Assets” shall not include Cash.

“Current Consultants” shall mean the Original Consultants and:

(a)

in respect of each day during the Interim Period, any additional Consultant who provides services to any Oldford Group Company as of that day, but excluding any Consultant (including any Original Consultant) who has ceased to be so engaged by any Oldford Group Company as at or prior to that day; and

(b)

in respect of the time immediately before Completion, all additional Consultants who began engagement by any Oldford Group Company prior to the Completion Date, but excluding each Original Consultant who has ceased to be so engaged by any Oldford Group Company as of or prior to such date;

and “Current Consultant” means any one of the Current Consultants.

“Current Liabilities” means the aggregate amount of current liabilities of Oldford (on a consolidated basis), calculated in accordance with IFRS. For purposes of this definition, “Current Liabilities’’ shall exclude (a) the Oldford Stipulation Amount, (b) any players’ deposits and players’ liabilities held or owed to any customer or player by any Oldford Group Company, (c) any Debt to the extent already taken into account for purposes of calculating the Estimated Debt or the Actual Debt and (d) the items identified in clauses (iii), (iv) and (v) of the definition of “Other Adjustments Amount”.

“Customer Offerings” means (a) the products that any Oldford Group Company or Joint Venture: (i) currently markets, develops, distributes, makes available, sells or licences to third parties, (ii) has previously marketed, distributed, made available, sold or licenced to third parties, or (iii) as contemplated by the 2014 Business Plan, currently plans to market, develop, distribute, make available, sell or licence to third parties; and (b) the services that any Oldford Group Company or Joint Venture (i) currently provides or makes available to third parties, (ii) has previously provided or made available to third parties, or (iii) as contemplated by the 2014 Business Plan, currently plans to provide or make available to third parties.

“Data Room” means the data site maintained by Merrill Corporation on behalf of Oldford in relation to the Contemplated Transactions and all documents contained therein, a copy of which is contained in the CD-ROMs provided by Merrill Corporation or Oldford to Buyer prior to the execution of this Deed.

“Debt” means, with respect to any person, all obligations (including all obligations in respect of principal, accrued interest, penalties, fees and premiums) of such person, whether direct or indirect: (a) for borrowed money (including overdraft facilities), but excluding any intercompany loans or similar instruments between the Oldford Group Companies; (b) evidenced by notes, bonds, debentures or similar instruments; (c) for the deferred purchase price of property, goods or services, including in connection with the acquisition of any business or non-competition agreement (other than trade payables or accruals incurred in the Ordinary Course of Business); (d) under capital leases (in accordance with IFRS); (e) in respect of letters of credit and bankers’ acceptances; (f) for Contractual Obligations relating to interest rate protection, swap agreements, factoring, hedging and collar agreements; and (g) in the nature of Guarantees of the obligations described in clauses (a) through (f) above of any other person. Notwithstanding the foregoing and for the elimination of doubt, “Debt” shall exclude (i) the Oldford Stipulation Amount and (ii) any players’ deposits and players’ liabilities held or owed to any customer or player by any Oldford Group Company.

“Definitively Resolved” means that (a) an Action against Buyer or any Oldford Group Company has been definitively settled or dismissed with prejudice with respect to Buyer and each Oldford Group Company named therein, or (b) Sellers have provided Buyer with an irrevocable guaranty of payment in the form of an irrevocable letter of credit, cash deposit,

bank guarantee or other similar liquid and creditworthy security reasonably acceptable to Buyer that may be drawn upon by Buyer at its discretion if required for the purpose of satisfying the full amount of damages being sought by an Action.

“Deposit Amount” means an initial amount equal to the sum set forth on Exhibit B-2, as may be increased pursuant to clause 8.2.2.

“Disclosure Documents” means all documents, instruments and other information contained in the Data Room.

“Disclosure Letter” means the letter dated the same date as this Deed from Oldford and the Warranting Sellers to Buyer in relation to the Warranties and delivered to Buyer before the execution of this Deed.

“EHS Laws” means any applicable Law or Order which relates to the pollution, contamination and/or protection of the Environment and/or human health and safety.

“EHS Permits” means all Permits required under any EHS Laws for the operation of any Oldford Group Company or the occupation or use of any Oldford Real Property.

“Employees” means the Original Employees and:

(a)

in respect of each day during the Interim Period, any additional employee who began employment with any Oldford Group Company as at that day, but excluding any employee (including any Original Employee) who has ceased to be so employed by any Oldford Group Company as at or prior to that day; and

(b)

in respect of the time immediately before Completion, all additional employees who began employment by any Oldford Group Company prior to the Completion Date, but excluding each Original Employee or other employee who has ceased to be so employed by any Oldford Group Company as of or prior to such date;

and “Employee” means any one of the Employees.

“Encumbrance” means any mortgage, charge, pledge, lien, restriction, assignment, hypothecation, option, right to acquire, right of first refusal or right of pre-emption, third party right or interest (including any community or other marital property interest) or other encumbrance or security interest of any kind or any other agreement or arrangement the effect of which is the creation of security; any other type of arrangement (including a title transfer or retention arrangement) having similar effect; or any agreement or arrangement or obligation to create any of the same.

“Enforceable” means, with respect to any Contractual Obligation stated to be “Enforceable” by or against any person, that such Contractual Obligation is a legal, valid and binding obligation of such person enforceable by or against such person in accordance with its terms subject to the Enforceability Exceptions.

“Enforceability Exceptions” means (a) any applicable bankruptcy, insolvency, fraudulent conveyance, reorganisation, moratorium and similar Legal Requirements affecting creditors’ rights generally and (b) general principles of equity or legal unfairness.

“Environment” means any of the following media: air, water or land including those media within buildings or other natural or man-made structures above or below ground and any living organisms or ecosystems.

“Equity Security” of any person means any (a) capital stock, shares (ordinary, common, preferred or otherwise), membership or partnership interest or other ownership interest of or in such person; (b) securities directly or indirectly convertible into or exchangeable for any of the foregoing; (c) options, warrants or similar rights to purchase or subscribe for any of the foregoing or securities convertible into or exchangeable for any of the foregoing; or (d) contracts, commitments, agreements, understandings, arrangements or calls of any kind relating to the issuance of any of the foregoing.

“Excluded Damages” means any punitive, special or exemplary damages and any damages that are not probable and reasonably foreseeable.

“Excluded Covenants” means the covenants set forth in Schedule 4, part 1, part 2, clauses 2.2.1(e); 2.2.1(f); 2.2.1(g); 2.2.1(h); 2.2.1 (p); 2.2.1 (q); 2.2.1 (s)(i) and (ii); 2.2.1(y); part 6.1.1, part 7, part 8, or part 10.3.

“Excluded Tax Events” means, except as arising from the fraud, dishonesty, wilful misconduct or wilful concealment of an Oldford Group Company prior to Completion or the Warranting Sellers:

(a) any increase in rates of Tax, introduction of Tax, change in Law or change in interpretation of a Tax Law set out in writing, that comes into force after Completion with retrospective effect; or

(b) other than as set forth in clause (c) below, any Tax Liability arising due to an act, omission or transaction of an Oldford Group Company after Completion (except where such act, omission or transaction occurs as part of a series of directly interconnected transactions commencing before Completion) or of Buyer or any member of any Tax group or fiscal unity of which Buyer is a member (including pursuant to any acceleration, initiation or instigation by any of the foregoing of any Tax audit, assessment, investigation or inquiry), except where such act, omission or transaction was carried out with the consent of the Sellers’ Representative (which consent shall not be withheld or conditioned if such act, omission or transaction is required by applicable Law) and except for Permitted Audit Acceleration Requests; or

(c) any assessment, enforcement or collection of a Tax after Completion with retrospective effect to any period prior to Completion, arising in connection with an application for, or a grant of, a Gaming Approval in a jurisdiction in which the Oldford Group Companies do not hold a Gaming Approval as of the date of this Deed.

“Expense Fund Amount” means $[*****].

“Financing Sources” means the persons that have committed to provide or otherwise entered into Contractual Obligations with respect to the Financing Commitments or any Alternative Financing in connection with the Contemplated Transactions, and any Definitive Agreements entered into pursuant thereto or relating thereto, together with their Affiliates and their Affiliates’ respective officers, directors, employees and representatives and their respective successors and assigns.

“Fixed Reference Working Capital Amount” means an amount equal to [*****].

“Fundamental Covenants” means the covenants set forth in Schedule 4, part 2, clauses 2.2.1(a), 2.2.1(b) (to the extent it relates to Equity Securities), 2.2.1(c), 2.2.1(d), 2.2.1(i)(C), 2.2.1(j), 2.2.1(k)(ii), 2.2.1(l), 2.2.1(m), 2.2.1(n), 2.2.1 (o), 2.2.1(u), clause 4, clause 5 and clause 9.

“Fundamental Warranties” means the Warranties set forth in (a) Schedule 6, part 1, paragraph 1 (other than paragraph 1.1.2 and 1.4), paragraph 2.1, 2.2.1, 2.2.2, 2.2.4, 2.2.5 and 2.2.6(a); (b) Schedule 6, part 2, paragraph 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7 and 2.11; and (c) Schedule 6, part 3, paragraph 3.1, 3.2, 3.3 and 3.8.

“Gaming Approvals” means all gaming licences, Permits, approvals, authorisations, franchises, written waivers and exemptions, or entitlements issued by any Gaming Authority.

“Gaming Authorities” means those federal, state, provincial, local and other governmental, regulatory and administrative authorities, licencing authorities, agencies, boards and officials responsible for the regulation, oversight or licencing of gaming (land-based or online), lottery operations (including video lottery operations), or other similar activities with jurisdiction over, or with respect to, the Oldford Group Companies or the Business.

“Gaming Laws” means all Laws pursuant to which any Gaming Authority possesses regulatory, licencing or Permit authority over the Oldford Group Companies or the Business with respect to gaming (land-based or online) or lottery operations (including video lottery operations).

“Group Relief” means any relief, loss, allowance, credit, deduction, exemption or set-off in respect of any Tax available between members of any Tax group or fiscal unity.

“Guarantee” means, with respect to any person, (a) any guarantee of the payment or performance of any Debt or other Liability of any other person; and (b) any other arrangement whereby credit is extended to any obligor (other than such person) on the basis of any promise or undertaking of such person (i) to pay the Debt or other Liability of such obligor, (ii) to purchase any obligation owed by such obligor, (iii) to purchase or lease assets under circumstances that are designed to enable such obligor to discharge one or more of its obligations or (iv) to maintain the capital, working capital, solvency or general financial condition of such obligor.

“IFRS” means International Financial Reporting Standards as developed and adopted by the International Accounting Standards Board from time to time.

“Inbound IP Licences” means, collectively, (a) each licence or other Contractual Obligation pursuant to which any Oldford Group Company exploits any item included in sub-clause (b) of the definition of Company Licenced Intellectual Property (excluding currently available, off-the-shelf Software programs that are part of the Internal Systems and are licenced by any Oldford Group Company pursuant to “shrink wrap” licences requiring payment of one-time, non-recurring fees of less than $100,000); (b) each Contractual Obligation pursuant to which any Oldford Group Company has obtained any licenced interest in Intellectual Property developed by a consultant, Software or hardware developer or vendor to any Oldford Group Company or any other person.

“Indemnity Escrow Amount” means $315,000,000.

“Indemnification Percentage” means, with respect to each Warranting Seller, the quotient, expressed as a percentage, of (a) the number of Participating Shares owned by such Warranting Seller immediately before Completion, divided by (b) the aggregate number of Participating Shares owned by all Warranting Sellers immediately before Completion.

“Initial Tax Indemnity Threshold” means the first $100,000,000 of indemnifiable Tax Losses claimed by all Buyer Indemnified Persons pursuant to clause 9.

“Insolvency Event” means, in relation to any Oldford Group Company, a Seller or any specified third person or party, as the case may be:

(a)

the issue of a petition for its winding up, liquidation or dissolution or any petition being made or it becoming subject to any petition or any other proceedings being commenced with any Relevant Authority under any bankruptcy or insolvency law applicable to it, in each such case, only if such petition is not dismissed or otherwise resolved within 60 days;

(b)

the convening of a meeting for the purpose of resolving for its winding up, dissolution, liquidation, administration or reorganisation (by way of company voluntary arrangement, scheme of arrangement or otherwise), the passing of such a resolution or the making of any order for its winding up, liquidation, reorganisation, administration or other similar relief;

(c)

(i) a provisional liquidator, liquidator, administrative receiver or other judicial receiver, administrator, trustee, custodian, fiscal agent or other similar officer taking possession of, or being appointed by a Relevant Authority over a portion of an Oldford Group Company’s property, or (ii) an encumbrancer actually taking possession of, a substantial portion of its property;

(d)

any distress, execution, sequestration or other process being levied on, or enforced against, the whole or substantially all of its property by value;

(e)

it making proposals for, or entering into, a composition, assignment or arrangement with any of its major creditors;

(f)

it being insolvent or unable to pay its debts within the meaning of the insolvency legislation applicable to it or otherwise unable to pay any substantial portion of its debts as they fall due; or

any procedure or step which is analogous to those stated in paragraphs (a) to (f) being taken in any jurisdiction.

“Intellectual Property” means any and all intellectual property, whether protected, created or arising under the laws of any jurisdiction, and/or subsisting anywhere, in the world, including: (a) issued patents, patent applications, utility models, design patents and industrial design registrations and certificates of invention and other governmental grants for the protection of Inventions or industrial designs, equivalent rights, including all related provisionals, continuations, continuations in part, divisionals, extensions, reissues, reexaminations and renewals and applications for the foregoing, patents and pending patent applications that (i) directly or indirectly provide a claim of priority for any such issued patents and pending patent applications, or (ii) which any such patents or pending patent applications directly or indirectly form a basis for priority, national and multinational counterparts of such patent applications and issued patents, all rights to apply in any or all countries of the world for such patent applications and issued patents including all rights provided by multinational treaties or conventions for any of the foregoing, and Inventions described in any of such patent applications and issued patents including those that are included in any claim, capable of being reduced to a claim or could have been included as a claim in any such pending patent applications and issued patents (collectively, “Patent Rights”); (b) trademarks and service marks whether registered or unregistered, certification marks, distinguishing guises, designs, insignia, logos, slogans, brand names, trade names, business names, domain names, social media platform account names (including for Facebook, Twitter, Instagram and Pinterest), corporate names, trade styles and trade dress, and other designations of source or origin, all goodwill in the foregoing, along with all applications, registrations, renewals and extensions

thereof, but excluding any domain names, social media platform account names and any other designations of source or origin that include or are similar to the names of any Brand Ambassador, or any other Oldford Group players or Oldford Group endorsers (collectively, “Trademarks”); (c) copyrights, data and data base rights, rights in algorithms, systems or methodologies, rights in any Software and rights in any artwork or designs, and registrations and applications for registration thereof, including, to the extent that such rights can be assigned, moral rights of authors and works of authorship, in any tangible medium of expression whether or not registered or copyrightable, along with all applications, registrations, renewals and extensions thereof (collectively, “Copyrights”); and (d) Inventions, Invention disclosures, statutory Invention registrations, trade secrets and Confidential Information, Know-How, manufacturing and product processes and techniques, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether or not patentable, and whether or not reduced to practice. For the elimination of doubt, Intellectual Property shall include all rights in the foregoing Intellectual Property that accrue prior to or after the Completion Date, including the right to sue and collect damages for past, present and future infringements, violations or misappropriations thereof, to the extent permitted under applicable Law, the right to income, fees, royalties and payments now or hereafter due thereunder; and the right to sue for passing off and any equivalent rights in other jurisdictions.

“Interim Period” means the period between the execution of this Deed and the earlier of: (a) the Effective Time and (b) the date on which this Deed is terminated in accordance with its terms.

“Interim Accounts” means the unaudited consolidated financial statements of Oldford for the three month period ended March 31, 2014.

“Internal Systems” means the Software, equipment, materials and test, calibration and measurement apparatus used by an Oldford Group Company in the Business and which is required for the operation of the Oldford Group Companies in the Ordinary Course of Business, or to develop, manufacture, fabricate, assemble, provide, distribute, support, maintain or test the Customer Offerings, whether or not located on the premises of an Oldford Group Company.

“Inventions” means any novel, inventive and useful art, method, process, machine (including article or device), manufacture or composition of matter, or any novel, inventive and useful improvement in any art, method, process, machine (including article or device), manufacture or composition of matter.

“Investment” means (a) any direct or indirect ownership, purchase or other acquisition by a person of any notes, obligations, instruments, Equity Securities (including joint venture interests) of any other person; and (b) any capital contribution or similar obligation by a person to any other person, except that any such action under (a) and (b) in respect of any players’ deposits and players’ liabilities held or owed by the Oldford Group Companies shall not be regarded as an “Investment”.

“Joint Venture” means any person that is not a subsidiary of an Oldford Group Company, but of which an Oldford Group Company (a) owns Equity Securities representing 15% or more of the voting rights in such person, or (b) has the right to participate in or receive any payment based on the revenues or profits of such person and which represents 15% or more of the annual revenues or profits, as applicable, of such person.

“Know-How” means any information, methods or techniques (whether in tangible or intangible form) necessary for or likely to assist in providing services in connection with or for the purposes of the Business or to carry out any other activities in relation to the Business.

“Knowledge” means (a) when used as a reference to Oldford, the actual knowledge of the Warranting Sellers and each of Oldford’s Chief Executive Officer, Chief Operating Officer, General Counsel, Chief Financial Officer, Chief Technology Officer, Head of Business Development, controller[*****]; and (b) when used in reference to Buyer, the actual knowledge of each of Buyer’s Chief Executive Officer, Chief Financial Officer, Executive Vice President and General Counsel.

“Law” means any federal, national, foreign, supranational, state, provincial, local or similar statute, statutory instrument, law, resolution, ordinance, regulation, rule, code, Order, treaty, bylaw, binding guidance issued by a Relevant Authority, decree or any similar provision having the force or effect of law, including Gaming Laws.

“Legal Requirement” means any Law, Order or Permit.

“Liability” means, with respect to any person, any liability, debt or other obligation of such person, whether asserted or unasserted, absolute or contingent, disputed or undisputed, disclosed or undisclosed, secured or unsecured, joint or several, and whether or not required under IFRS (or other applicable accounting standard) to be accrued on the financial statements of such person and regardless of whether such liability, debt or obligation is immediately due and payable, including all costs of investigation and defence and attorney’s fees, costs and expenses which are directly related thereto.

“Losses” means all actual losses, liabilities, damages, judgments, penalties, bonds, dues, fines, interest, Taxes, fees, costs (including costs of investigation, defence and enforcement of this Deed), and expenses, including attorney’s fees and disbursements; provided, that Losses shall not include any Excluded Damages, except to the extent incurred by an Indemnified Person in respect of a Third Party Claim. For the elimination of doubt, “Losses” includes Tax Losses.

“M&A of Association” means a person’s memorandum of association and articles of association or the equivalent documents referred to in clause (a) of the definition of Organisational Documents.

“Material Adverse Effect” means an effect, event, circumstance, development or change that: (a) is materially adverse to the assets, business, results of operations or financial condition of the Oldford Group Companies, taken as a whole; or (b) materially adversely affects the ability of the Warranting Sellers or Oldford to perform their respective obligations under this Deed or to consummate the Contemplated Transactions; or (c) results, or an event has occurred that will result, in the cessation or prohibition of the operation of the Business or the elimination of any of the Oldford Group Companies’ ability to offer gaming products or services in any jurisdiction from which the Oldford Group Companies derived 5% or more of the gross gaming revenues of the Oldford Group Companies for the year ended December 31, 2013; other than (with respect to each of (a) and (b) above) any effect, event, circumstance, development or change arising out of or resulting from the following:

(i)

any changes to global economic or financial market conditions, including prevailing interest rates, commodity prices and other costs;

(ii)

any changes in applicable Laws or IFRS including authoritative interpretations thereof;

(iii)

any action taken by the Warranting Sellers or any Oldford Group Company if explicitly contemplated under this Deed (other than Schedule 4, clause 2.1) or consented to in writing by Buyer;

(iv)

any loss of business from players, suppliers, Brand Ambassadors or other commercial persons (and excluding, for the elimination of doubt, any action taken by a Relevant Authority) resulting from the announcement or pendency of the Contemplated Transactions;

(v)

acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Deed; or

(vi)

any material international or national calamities or earthquakes, hurricanes, other natural disasters or acts of god;

provided, that in each case of the preceding clauses (i), (ii), (v) or (vi), such matters do not have a disproportionate effect (relative to other participants in the same industry as the Oldford Group Companies) on the Oldford Group Companies (taken as a whole); and

provided, further, that neither (A) a failure by Oldford to meet its internal or estimated projections, budgets, plans or forecasts of its revenues, earnings, other financial performance or results of operations, nor (B) the cessation or prohibition of the operation of the Business or the elimination of any of the Oldford Group Companies’ ability to offer gaming products or services in any jurisdiction from which the Oldford Group Companies derived less than 5% of the gross gaming revenues of the Oldford Group Companies for the year ended December 31, 2013, shall, in and of itself, be a “Material Adverse Effect.”

“Material Employee” means any Employee whose annual cash compensation is greater than $[*****].

“Net Working Capital” means, as of any particular date, Current Assets minus Current Liabilities, each calculated as of immediately prior to, and without giving effect to, such date (or Completion). Net Working Capital shall be determined on a basis consistent with the Net Working Capital and Other Adjustments Calculation.

“Non-Disclosure Agreement” means the Non-Disclosure Agreement entered into between Buyer and Rational Group Limited on 22 August 2013.

“Object Code” means software, in machine-readable form, including all computer programming code, substantially or entirely in binary form, which is directly executable by a computer after suitable processing but without the intervening steps of compilation or assembly and all help, message and overlay files.

“Oldford Group Companies” means, collectively, Oldford (including after the Effective Time, the Surviving Company) and its subsidiaries, including those required to be set forth on Schedule 1, part 2, other than any Dormant Entity, and “Oldford Group Company” means any one of them. Notwithstanding the foregoing, the Oldford Group Companies shall include the Dormant Entities with respect to Schedule 6, Part 1, paragraphs 3.5, 14, 15.1, 18, 20 and 21; Schedule 3; Schedule 4; Schedule 5, part 1; and Schedule 7.

“Oldford Optionholders” means persons holding Vested Oldford Share Options.

“Oldford Share Awards” means all Contractual Obligations (other than in respect of Oldford Share Options) to issue ordinary shares of Oldford.

“Oldford Share Awards Holders” means persons holding Vested Oldford Share Awards.

“Oldford Share Options” means all options of Oldford that give any person a right to subscribe for or be issued or allotted, or are convertible or exercisable into, or exchangeable for any Equity Securities of Oldford.

“Oldford Shareholder Approval” means the affirmative vote of holders of not less than 75% of the issued and outstanding ordinary shares of Oldford at the Shareholders’ Meeting.

“Oldford Stipulation” means that certain Stipulation and Order of Settlement regarding Oldford, by and among Oldford and other persons named therein and the United States Attorney for the Southern District of New York, as ordered by the Honorable Leonard B. Sand, United States District Judge for the Southern District of New York on 31 July 2012.

“Oldford Stipulation Amount” means, as of a particular date, any and all outstanding or remaining amounts to be paid by Oldford to the United States pursuant to the Oldford Stipulation. As of the date hereof, the Oldford Stipulation Amount is $[*****].

“Oldford Stipulation Trustee” means an internationally recognized financial or other institution to be mutually agreed upon by Buyer and Sellers’ Representative.

“Open Source Materials” means all software, documentation or other material that is distributed as “free software”, “open source software” or under a similar licencing or distribution model, including the GNU General Public Licence (GPL), GNU Lesser General Public Licence (LGPL), Mozilla Public Licence (MPL), or any other licence described by the Open Source Initiative as set forth on www.opensource.org.

“Order” means any order, writ, Consent, judgment, injunction, decree, stipulation, settlement, ruling, determination or award entered by or with any Relevant Authority or arbitral body in a judicial, administrative or arbitration Action.

“Ordinary Course of Business” means an action taken by any person in the ordinary course of such person’s business which is consistent with the past customs and practices of such person (including past practice with respect to quantity, amount, magnitude and frequency), and which is taken in the ordinary course of the normal operations of such person, including, with respect to the Oldford Group Companies and the Business, any action which is contemplated in the 2014 Business Plan or the 2014 Forecast.

“Organisational Documents” means, with respect to any person (other than an individual), (a) the memorandum of association, articles of association, certificate or articles of incorporation, formation or organisation, and any joint venture, limited liability company, operating or partnership agreement and other similar documents entered into or adopted at any time or filed in connection with the creation, formation or organisation of such person; and (b) all bylaws, shareholders’ agreements, voting agreements, rights of first refusal and similar documents, instruments or agreements relating to the organisation or governance of such person.

“Original Consultants” means the Consultants who are engaged by the Oldford Group Companies on the date of this Deed.

“Original Employees” means the persons employed by the Oldford Group Companies on the date of this Deed.

“Other Adjustments Amount” means an amount equal to (i) $15,000,000 [*****] plus (ii) Cash, minus (iii) staff bonus accruals, minus (iv) dividends payable at Completion minus (v) director loans.

“Other Sellers” means the holders of allotted and issued ordinary shares of Oldford (other than the Warranting Sellers) as of the Completion Date.

“Outbound IP Licences” means, collectively, each licence or other Contractual Obligation pursuant to which any Oldford Group Company or Joint Venture grants to another person any right relating to or under, or covenants not to assert any right with respect to, any past, existing or future Company Intellectual property.

“Participating Equityholders” means the Sellers, the Oldford Optionholders, Oldford Share Awards Holders, the holders of any vested Interim Period Employee Shares, the holders of any vested Phantom Plan Equity Award Units outstanding immediately prior to the Effective Time and each one of them a “Participating Equityholder”.

“Participating Shares” means all (a) allotted and issued Shares, (b) Shares underlying Vested Oldford Share Awards, (c) Shares underlying Vested Oldford Share Options, (d) vested Interim Period Employee Shares and (e) vested Phantom Plan Equity Award Units, in each of (a), (b), (c), (d) and (e), outstanding as of immediately before the Effective Time.

“Paying Agent” means an internationally reputable firm providing paying agent services to be mutually agreed between Buyer and the Sellers’ Representative.

“Pension Scheme” means, with respect to any person, any pension scheme relating to an officer, director, employee, manager, consultant or other Affiliate of such person, including any defined benefit pension scheme relating to retirement.

“Per Share Completion Date Payment to Participating Equityholders” means an amount equal to the quotient of (a) the Completion Date Payment to Participating Equityholders” divided by (b) the number of Participating Shares.

“Per Share Deferred Payment Consideration” means an amount equal to the quotient of the (a) Deferred Payment Amount (plus any late fees accrued thereon in accordance with clause 3.5) divided by (b) the number of Participating Shares.

“Per Share Merger Consideration” means an amount equal to the sum of the Confirmed Per Share Completion Date Merger Consideration plus the Per Share Deferred Payment Consideration.

“Permit” means, with respect to any person, any licence, franchise, permit, Consent, approval, certificate or other similar authorisation (including Gaming Approvals) issued by, or otherwise granted by, any Relevant Authority or any other person to which or by which such person is subject or bound or to which or by which any property, business, operation or right of such person is subject or bound.

“Permitted Audit Acceleration Request” shall mean a request that a Tax assessment and/or audit closure notice be provided as regards to: (a) any audit commenced by a Tax Authority prior to Completion, and (b) any audit commenced by a Tax Authority after Completion but prior to the Release Date which did not arise due to an act, omission or transaction of an Oldford Group Company, Buyer or any of its Affiliates. For the elimination of doubt, a Permitted Audit Acceleration Request shall not include any settlement, compromise, consent to the taking of any action, or any offer, statement of intention or statement of consent as to any of the foregoing, or any admission or statement which may reasonably be construed as an admission of any matter under audit, except with the prior written consent of the Sellers’ Representative.

“Permitted Encumbrances” means (a) mechanic’s, materialman’s, warehouseman’s, carrier’s, service provider’s and other similar Encumbrances arising in the Ordinary Course of Business; (b) Encumbrances on goods in transit incurred pursuant to documentary letters of credit arising in the Ordinary Course of Business; and (c) Encumbrances for current Taxes and assessments not yet past due or the amount or validity of which are being contested in good faith pursuant to Actions that are proper for such a contest, and for which adequate reserves have been maintained in accordance with IFRS.

“Phantom Plan Equity Award Units” means Contractual Obligations (other than in respect of Oldford Share Options and Oldford Share Awards) entitling the holder thereof to consideration in an amount based on the value of ordinary shares of Oldford.

[*****]

“Reference Working Capital Amount” means either: (i) if the Completion Date is on or prior to the four-month anniversary of the date of this Deed, an amount equal to the Fixed Reference Working Capital Amount; or (ii) if the Completion Date is on any date following the four-month anniversary of the Date of this Deed, an amount (calculated in a manner consistent with the Net Working Capital and Other Adjustments Calculation) equal to the average Net Working Capital for the twelve most recently completed months immediately preceding the Completion Date (for each month calculated as of the last day of such month).

“Refund Threshold” has the meaning set forth in Exhibit B-5.

“Relevant Authority” means any international, federal, state, local, provincial, municipal or any government or political subdivision thereof, or any multinational organisation or authority or any authority, agency, body or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any arbitrator or arbitral body, and the term “Relevant Authority” includes Gaming Authorities.

“Relevant 9-Month Period” means a period of nine calendar months commencing on the date hereof and each subsequent nine-month period thereafter, during the Interim Period.

“Representative” means, with respect to any person, any director, officer, manager, employee, agent, consultant, advisor or other representative of such person, including legal counsel, accountants, and financial advisors.

“Resorts Agreement” means the agreement dated April 29, 2014, by and among Rational Services Limited, Oldford and DGMB Casino, LLC d/b/a Resorts Casino Hotel.

“Sellers” means the Warranting Sellers and the Other Sellers, collectively, and “Seller” means any of them.

“Senior Officer Agreements” means the executive employment agreements in form and substance reasonably satisfactory to Buyer, to be entered into by and between Buyer and each of the persons listed on Exhibit E.

“Service Document” means a claim form, summons, Order or other process relating to or in connection with any Action.

“Shares” means all ordinary shares of Oldford, including all (a) issued and allotted ordinary shares of Oldford, details of which are given in Schedule 1, part 4, (b) ordinary shares of Oldford underlying, or reserved for issuance under, any Oldford Share Option or Oldford Share Award and (c) Interim Period Employee Shares.

“Software” means all computer software, programs and databases (including Source Code, Object Code and all related applications and data files), firmware and documentation and materials relating thereto, together with any and all maintenance rights, service rights, programming rights, hosting rights, test rights, improvement rights, renewal rights and indemnification rights and any substitutions, replacements, improvements, error corrections, updates and new versions of any of the foregoing. Software shall include any set of instructions for execution by a computer processor (including source and object) language or medium and including, for the elimination of doubt, any closed or sets of instructions that are embodied or incorporated in any firmware.

“Source Code” means the non-executable, human readable version of any computer software, recorded in both printed format and in electronic media in machine readable format, with, as applicable, libraries, documentation, commentary, instructions, scripts, programmer specifications, notes (technical or otherwise), manuals, reference guides, tutorial literature, explanations, annotations and other documentation, including general flow-charts, input and output layouts, field descriptions, volumes and sort sequences, data dictionaries, file layouts, proposing requirements and calculation formulae and details of all algorithms and all software or developer’s tools required to compile and generate Object Code with the use of the source code.

“Standstill Period” means from the period commencing on the Deferred Payment Date and ending on the earlier of (a) the scheduled maturity date of the Debt under the Buyer Credit Agreements, and (b) the date on which the Debt under the Buyer Credit Agreements is paid in full and all commitments to lend under the Buyer Credit Agreements have been terminated (including any repayment and termination of commitments as a result of any refinancing or other arrangement to replace such Debt).

“Tax” or “Taxation” means (a) any and all national, federal, state, provincial, local or other taxes of any kind or nature, including those measured on, measured by or referred to as, income, corporation, alternative or add-on minimum, gross income, gross receipts, capital, capital gains, sales, use, ad valorem, franchise, licence, profits or excess profits, transfer, withholding, payroll, employment, national insurance, social, excise, severance, production, stamp, value added, real or personal property, windfall profits or any other taxes, customs duties or like assessments or charges of any kind whatsoever (whether computed on a separate or consolidated, unitary or combined basis, or in any other manner), and whether chargeable directly or primarily against or attributable directly or primarily to an Oldford Group Company, together with any interest and any penalties, additions to tax or other additional amounts with respect thereto, and any interest in respect of such penalties, fines, additions to tax or additional amounts; and (b) any Liability for the payment of any amounts of the types described in (a) as a result of being a transferee or successor, an indemnitor, whether by any express or implied obligation to indemnify any other person, or as a result of any obligation under any contract or arrangement with any other person with respect to such amounts, including Group Relief and any Taxes of a predecessor entity or of a person from whom an Oldford Group Company is considered to have acquired property.

“Tax Authority” means any Relevant Authority, body or official with Taxation, fiscal, revenue, customs or excise authority in any jurisdiction.

“Tax Losses” means all actual losses, liabilities, damages, judgments, penalties, bonds, dues, fines, interest, Taxes, fees, costs (including costs of investigation, defence and

enforcement of this Deed), and expenses, including attorney’s fees and disbursements, arising from any breach of, or inaccuracy in, any Tax Warranty, or any breach, default or violation of the Tax Covenant; provided, that Tax Losses shall not include (i) any Losses arising from an Excluded Tax Event, and (ii) any Excluded Damages, except to the extent incurred by an Indemnified Person in respect of a Third Party Claim.

“Tax Covenant” means the covenants set forth in Schedule 7.

“Tax Return” means any return, report, election, notice, designation, declaration, information return or other document filed with or submitted to any Tax Authority in connection with any Tax, including any related accounts, computations, attachments, schedules or amendments.

“Tax Warranties” means the Warranties set out in Schedule 6, Part 1, Section 14.

“Taxation Statute” means any directive, statute, enactment, Law or regulation, wherever enacted or issued, providing for or imposing any Tax, or providing for the reporting, collection, assessment or administration of any Tax Liability, and shall include Orders, regulations, instruments, bylaws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute, enactment, Law, Order, regulation or provision that amends, extends, consolidates or replaces the same or that has been amended, extended, consolidated or replaced by the same.

“Third Parties Act” means the Contracts (Rights of Third Parties) Act 1999.

“Third Party Beneficiaries” means (a) the Other Sellers in respect of this Deed, (b) the Oldford Group Companies and the Non-disparaged Persons in respect of clause 11 of this Deed and (c) with respect to clauses 14.3 (solely with respect to Buyer’s obligations thereunder), 19 and 22, each Financing Source and its successors and assigns.

“Transaction Documents” means this Deed, the Disclosure Letter, the Voting Agreement, the Indemnity Escrow Agreement, the Senior Officer Agreements, the Scheme of Merger, the indemnity letters attached as Exhibit L hereto, the Commitment Documents and all other Contractual Obligations to be entered into or delivered in connection therewith.

“Transaction Percentage” means, with respect to each Participating Equityholder, the quotient, expressed as a percentage, of (a) the number of Participating Shares owned by such Participating Equityholder immediately before the Effective Time, divided by (b) the aggregate number of Participating Shares.

“Vested Oldford Share Awards” means Oldford Share Awards which, pursuant to their terms or any acceleration approved by Oldford, are vested (but unissued) as of the Completion Date.

“Vested Oldford Share Options” means Oldford Share Options which pursuant to their terms or any acceleration approved by Oldford are vested as of the Completion Date.

“Warranties” means the warranties given in clause 7 and in Schedule 6 and “Warranty” shall be construed accordingly.

“2014 Business Plan” means the business plan of Oldford for the calendar year of 2014 as approved by the Board of Directors of Oldford and attached hereto as Exhibit G.

The following terms, as used in this Deed, have the meaning given to them in the clause or place indicated below:


Term:		Clause or Place Where Defined:
Acceptance Notice		clause 9.8.2

Acquisition Proposal		Schedule 4, part 4, paragraph 4.1

Actual Debt		clause 3.5.1(b)(i)

Actual Net Working Capital		clause 3.5.1(b)(ii)

Actual Other Adjustments Amount		clause 3.5.1(b)(iv)

Actual Reference Working Capital Amount		clause 3.5.1(b)(iii)

Additional Fee		clause 8.5.3(b)

Alternative Financing		Schedule 4, part 10, paragraph 10.1

Arbitration Award		clause 19.2.1

Assets		Schedule 6, part 1, paragraph 8.1.1

Bring-Down Failure		clause 8.6.6

Buyer		Preamble

Buyer Indemnified Person		clause 9.1

Buyer Parent		Preamble

Buyer Parties		clause 8.7.1(b)(ii)

Buyer Termination Fee		clause 8.5.3(b)

Buyer’s Position		clause 3.7.1

CA Firm Dispute Expenses		clause 3.7.4(c)

Cash Account		clause 3.6.2(a)

Cash Account Balance		clause 3.6.2(a)

Cash Completion Date Amount		clause 3.3.3(a)

Certificate		clause 2.6.1

Collateral Source		clause 9.13

Commitment Documents		Schedule 6, part 3, paragraph 3.7.2

Commitment Letters		Schedule 6, part 3, paragraph 3.7.1

Completion Balance Sheet		clause 3.5.1(a)

Completion Certificate		clause 3.2

Completion Date Payment to Participating Equityholders		clause 3.3.1

Completion Date Purchase Price		clause 3.3.3

Confirmed Completion Balance Sheet		clause 3.5.5

Confirmed Debt		clause 3.5.5

Confirmed Net Working Capital		clause 3.5.5

Confirmed Other Adjustments Amount		clause 3.5.5


Term:		Clause or Place Where Defined:
Confirmed Reference Working Capital Amount		clause 3.5.5

Copyrights		clause 1.1 (Definition of “Intellectual Property”)

Data Protection Legislation		Schedule 6, part 1, paragraph 7.1

Deductible		clause 9.3

Deed		Preamble

Deferred Payment Amount		clause 3.6.1(a)

Deferred Payment Date		clause 3.6.1(a)

Definitive Agreements		Schedule 4, part 10, paragraph 10.1

Deposit Account		clause 3.4.1

Dispute Notice		clause 9.8.2

Dissenting Shares		clause 2.7

Dormant Entities		Schedule 6, part 1, paragraph 2.2.1

Effective Time		clause 2.2.1

Escrow Agent		clause 3.4.2

Estimated Completion Balance Sheet		clause 3.2

Estimated Debt		clause 3.2.1

Estimated Net Working Capital		clause 3.2.2

Estimated Other Adjustments Amount		clause 3.2.4

Estimated Reference Working Capital Amount		clause 3.2.3

Exercising Party		clause 8.2.1

Expense Fund		clause 3.4.3(a)

Expense Fund Agent		clause 3.3.2(a)(ii)

Expense Fund Escrow Agreement		clause 3.4.3(a)

Extended Long Stop Date		clause 8.2.1

Extension Period		clause 8.2.2

Extension Period Stop Date		clause 8.2.2

Fee Letters		Schedule 6, part 3, paragraph 3.7.2

Final Completion Statement		clause 3.5.1(b)

Final Long Stop Date		clause 8.2.2

Financing		Schedule 6, part 3, paragraph 3.7.1

Financing Commitments		Schedule 6, part 3, paragraph 3.7,1

Forward-Looking Data		Schedule 6, part 3, paragraph 3.9

Indemnified Person		clause 9.5


Term:		Clause or Place Where Defined:
Indemnifying Person		clause 9.5

Indemnity Claim Amount		clause 9.8.1

Indemnity Escrow Account		clause 3.4.2

Indemnity Escrow Agreement		clause 3.4.2

Indirect Tax		Schedule 6, part 1, paragraph 14.11.5

Initial Long Stop Date		clause 8.2

Insurance Policies		Schedule 6, part 1, paragraph 9.2.1

Intellectual Property Registrations		Schedule 6, part 1, paragraph 5.1.1

Interim Period Employee Shares		Schedule 4, part 2, paragraph 2.2.1 (a)(ii)

Investment Entity		Schedule 6, part 1, paragraph 2.2.6(b)

LCIA		clause 19.2.1

Leased Real Property		Schedule 6, part 1, paragraph 12.2

Letter of Transmittal		clause 2.6.1

Liability Cap		clause 9.3

Liquidated Damages Exception		clause 8.7.2

Long Stop Termination Effective Date		clause 8.2

Material Contract		Schedule 6, part 1, paragraph 15.1

Material IP Claim		Schedule 6, part 1, paragraph 5.6

Materiality Qualifier		clause 8.3.1 (a)(ii)

Merger		Preamble

Merger Consideration		clause 3.1.1

Merger Consideration Adjustments		clause 3.5.6

Merger Notice Period		clause 10.6.2

Merger Sub		Preamble

Mini-Basket		clause 9.3

Net Working Capital and Other Adjustments Calculation		clause 3.2

Non-disparaged Persons		clause 11.5

Notice of Claim		clause 9.5

Notice of Merger		clause 10.6.2

Oldford		Preamble

Oldford Real Property		Schedule 6, part 1, paragraph 12.2

Oldford Stipulation Trust Account		Schedule 4, part 4, paragraph 5

Oldford Subsidiary/Oldford Subsidiaries		Schedule 6, part 1, paragraph 2.2.1


Term:		Clause or Place Where Defined:
OFAC		Schedule 6, part 1, paragraph 21.5.8

Owned Real Property		Schedule 6, part 1, paragraph 12.1

Panel		clause 19.2.1

Patent Rights		clause 1.1 (Definition of “Intellectual Property”)

Paying Agent Agreement		clause 3.4.5

Post-Signing Event		clause 8.3.2(a)

Post-Completion Tax Period		Schedule 7, part 1, paragraph 1.1(c)

Pre-Completion Tax Period		Schedule 7, part 1, paragraph 1.1(c)

Real Property Leases		Schedule 6, part 1, paragraph 12.2

Receivable		Schedule 6, part 1, paragraph 8.2

Refund Event		clause 8.6

Registrar		clause 2.1

Related Party Agreements		Schedule 6, part 1, paragraph 18.3

Release Date		clause 3.4.2(a)

Relevant Gaming Authority		clause 8.6.3

Remote Location		clause 19.2.2

Required Deposit Period		clause 3.6.2(a)

Sanctioned Person		Schedule 6, part 1, paragraph 21.5.8

Scheme of Merger		clause 2.1

Seller Indemnified Person		clause 9.4

Seller Representative Indemnitees		clause 2.10.5

Sellers’ Objection		clause 3.5.3

Sellers’ Position		clause 3.7.1

Sellers’ Representative		Preamble

Shareholders’ Meeting		clause 10.6.1

Shareholders’ Meeting Notice		clause 10.6.1

Straddle Period		Schedule 7, part 1, paragraph 1.1(b)

Substantial Supplier		Schedule 6, part 1, paragraph 16.1

Surviving Company		clause 2.1

Tax Claim		Schedule 7, part 1, paragraph 1.3(a)

Terminating Party		clause 8.2

Third Party Claim		clause 9.6.1

Trademarks		clause 1.1 (Definition of “Intellectual Property”)


Term:		Clause or Place Where Defined:
Transfer Pricing Studies		Schedule 6, part 1, paragraph 14.9.1

Transfer Taxes		Schedule 7, part 1, paragraph 1.2

TSX		clause 10.2

Voting Agreement		Preamble

Waived Event		Clause 9.3.2(c)

Warranting Seller/Warranting Sellers		Preamble

Certain other terms have the meaning given to them in Schedule 7.

1.2	Contents page and headings

In this Deed the contents page and headings are included for convenience only and do not affect the interpretation or construction of this Deed.

1.3	Clauses and Schedules

In this Deed:

1.3.1

the Introduction, Schedules and Exhibits form part of this Deed and shall have the same force and effect as if expressly set out in the body of this Deed and any reference to this Deed shall include the Introduction and the Schedules;

1.3.2

any reference to the Introduction is a reference to the statements about the background to this Deed made above; and

1.3.3

any reference to a clause, Schedule or Exhibit is a reference to a clause or Exhibit of, or Schedule to, this Deed and any reference in a Schedule to a part or paragraph is to a part or paragraph of that Schedule.

1.4	Meaning of references

In this Deed any reference to (unless the context clearly requires otherwise):

1.4.1

any accounting term shall (unless otherwise specifically provided herein) have the meaning customarily given such term in accordance with IFRS and all financial computations hereunder shall be made in accordance with IFRS consistently applied;

1.4.2

a company is to any company, corporation or other body corporate wherever and however incorporated or established;

1.4.3

a document is to that document as supplemented, otherwise amended, replaced or novated from time to time;

1.4.4

“dollars” or “$” is to United States dollars; “U.S.” or “USA” is to the United States of America;

1.4.5

the masculine, feminine or neuter gender includes the other genders and any reference to the singular includes the plural (and vice versa);

1.4.6

including means “including without limitation”, in particular means “in particular but without limitation” and other general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things;

1.4.7

or shall not be exclusive;

1.4.8

a person includes any individual, firm, company, limited liability company, joint stock or other company, Relevant Authority, joint venture, association, trust or partnership, works council, employee representative body or any other entity of any kind (whether or not having a separate legal personality);

1.4.9

a person includes a reference to that person’s legal personal representatives and successors;

1.4.10

a regulation includes any regulation, rule, directive, request or guideline (whether or not having the force of law) of any Relevant Authority;

1.4.11

a statute or statutory provision includes any consolidation or re-enactment, modification or replacement of the same and any subordinate legislation in force under any of the same from time to time, except to the extent that any consolidation, re-enactment, modification or replacement enacted after the date of this Deed would extend or increase the Liability of any party to another under this Deed;

1.4.12

a time of the day is to London time and any reference to a day is to a period of 24 hours running from midnight to midnight;

1.4.13

time periods within or following which any payment is to be made or act is to be done shall be calculated excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day; and

1.4.14

a writing shall include any modes of reproducing words in a legible and non-transitory form provided that emails shall be deemed to be in writing for these purposes.

1.5	Meaning of parties

In this Deed any reference to a party or the parties is to a party or the parties (as the case may be) to this Deed and shall include any successors and permitted assignees of such party.

1.6	United Kingdom Companies Act of 2006 definitions

In this Deed:

1.6.1

the words and expressions “accounting reference period”, and “body corporate”, have the meanings given to them in the United Kingdom Companies Act of 2006; and

1.6.2

“subsidiary” has the meaning given to it in the United Kingdom Companies Act of 2006 save that, for the purposes of s 1159 United Kingdom Companies Act of 2006, a person shall be treated as a member of another company if:

(a)

any of its subsidiaries is a member of that subsidiary; or

(b)

any shares in that other company are held by a person acting on behalf of that person or any of its subsidiaries.

2.	THE MERGER

2.1	The Merger

Upon the terms and subject to the conditions set forth in this Deed, at Completion the parties hereto shall cause the Merger to be consummated by Oldford and Merger Sub executing and delivering a scheme of merger, substantially in the form attached hereto as Exhibit A-2 (the “Scheme of Merger”), which shall be filed on the Completion Date with the Isle of Man Registrar of Companies (the “Registrar”), together with such other resolutions, statutory declarations, notices, consents and other documents required to be filed by the Companies Act. Subject to the terms and conditions of this Deed, at the Effective Time, Merger Sub shall be merged with and into Oldford in accordance with, and with the effects provided in, the applicable provisions of the Companies Act, and Oldford shall be the surviving company resulting from the Merger (the “Surviving Company”) and, as a result, shall become a wholly owned subsidiary of Buyer, shall continue to be governed by the laws of the Isle of Man in accordance with the Companies Act and shall succeed to and assume all of the rights and obligations of Merger Sub, and the separate corporate existence of Merger Sub shall cease.

2.2	Effective Time; Effect of Merger

2.2.1

The Merger shall become effective on the date on which the Registrar issues the certificate of merger pursuant to section 154(3)(b) of the Companies Act (the “Effective Time”).

2.2.2

The Merger shall have the effects set forth in this Deed, the Scheme of Merger and the Companies Act (including section 156 thereof). Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of Oldford and Merger Sub shall vest in the Surviving Company, and all debts, liabilities and duties of Oldford and Merger Sub shall become the debts, liabilities and duties of the Surviving Company.

2.3	M&A of Association of the Surviving Company

Oldford’s M&A of Association, as amended and in effect immediately prior to the Effective Time, shall be amended in the Merger to be in the form of Exhibit A-3 and, as so amended, such M&A of Association shall be the M&A of Association of the Surviving Company until thereafter amended as provided therein or by applicable Law.

2.4	Directors and Officers of and Other Details Concerning the Surviving Company

2.4.1

The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Company immediately following the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in accordance with the M&A of Association of the Surviving Company.

2.4.2

The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Company immediately following the Effective Time until their respective successors are duly appointed and qualified or their earlier death, resignation or removal in accordance with the M&A of Association of the Surviving Company.

2.4.3

The registered agent of Merger Sub immediately prior to the Effective Time shall be the registered agent of the Surviving Company following the Effective Time until such time as it may be replaced or resign in accordance with the Companies Act.

2.4.4

The registered office of Merger Sub immediately prior to the Effective Time shall be the registered office of the Surviving Company following the Effective Time until such time as it may be changed in accordance with the Companies Act.

2.5	Conversion of Shares and Oldford Share Options

At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any securities of Oldford or Merger Sub:

2.5.1

Each ordinary share of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically converted into and become one (1) validly issued, fully paid and non-assessable ordinary share, par value $0.001 per share, of the Surviving Company.

2.5.2

(a) All Shares that are owned by Oldford, whether as treasury stock or otherwise (if any), immediately prior to the Effective Time and (b) unvested Oldford Share Awards and unvested Oldford Share Options shall be automatically cancelled and shall cease to exist and no consideration shall be delivered or due in exchange therefor.

2.5.3

In addition to the foregoing conversion, at the Effective Time, the Surviving Company shall issue 10,000,000 ordinary shares, par value $0.001 per share, of the Surviving Company to Buyer in consideration for the deposit of the Merger Consideration with the Paying Agent.

2.5.4

Each Participating Share (other than (i) Shares to be cancelled in accordance with clause 2.5.2 and (ii) any Dissenting Shares) shall be automatically converted into the right to receive, without interest, an amount in cash equal to the Per Share Merger Consideration, on the terms and subject to the conditions of this Deed (including clause 9). All such Participating Shares, when so converted, shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate (or evidence of Participating Shares in book-entry form) that immediately prior to the Effective Time represented any such Participating Shares shall cease to have any rights with respect thereto, except the right to receive the applicable Merger Consideration.

2.5.5

The Per Share Merger Consideration shall be adjusted to the extent necessary to reflect the effect of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to the Shares occurring or having a record date on or after the date of this Deed and prior to the Effective Time; provided that this clause 2.5.5 shall not affect or supersede the provisions of Schedule 4, clause 2.

2.6	Exchange of Certificates.

2.6.1

Exchange Procedures. (i) On or prior to the Completion Date, the Sellers’ Representative shall mail to each Participating Equityholder as of the date of this Deed, and (ii) at, or not later than the third day immediately following, the Effective Time, the Surviving Company shall mail to each Participating Equityholder of record as of the Effective Time (other than Sellers referred to in the immediately preceding clause (i)), which immediately prior to the Effective Time represented Participating Shares and whose Participating Shares were converted pursuant to clause 2.5.4 into the right to receive the Per Share Merger Consideration in respect of each Participating Share, (A) a letter of transmittal, substantially in the form attached as Exhibit A-4 and subject to changes required by the Paying Agent

(each, a “Letter of Transmittal”), and (B) instructions for use in effecting the surrender of their Participating Shares in exchange for payment of the Merger Consideration. Upon surrender of a Participating Share (including a physical certificate or book-entry representing such Participating Share (if any) (a “Certificate”)) for cancellation to the Paying Agent, together with a Letter of Transmittal, duly completed and validly executed in accordance with the instructions therewith, the holder of such Participating Share shall be entitled to receive in exchange therefor the Per Share Merger Consideration (paid in accordance with the terms and subject to the conditions of this Deed), without interest, for each Participating Share formerly in effect, and the Participating Share so surrendered shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered certificate representing the Participating Share is registered, it shall be a condition of payment that (A) the certificate representing the Participating Share so surrendered shall be properly endorsed or shall otherwise be in proper form for transfer and (B) the person requesting such payment shall have paid any transfer and other Taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of such certificate representing the Participating Share surrendered or shall have established to the reasonable satisfaction of the Surviving Company and the Paying Agent that such Tax either has been paid or is not applicable. Until surrendered as contemplated by this clause 2.6.1, each Participating Share shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by clause 2, without interest.

2.6.2

Transfer Books; No Further Ownership Rights in Shares. The applicable Merger Consideration paid (in accordance with the terms and subject to the conditions of this Deed) in respect of Participating Shares upon the surrender for exchange of Certificates (if applicable) in accordance with the terms of this clause 2 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Participating Shares previously represented by such Certificates, and, at the Effective Time, the stock transfer books of Oldford shall be closed and thereafter there shall be no further registration of transfers on the stock transfer books of the Surviving Company of the Participating Shares that were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates that evidenced ownership of Participating Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Participating Shares, except as otherwise provided for herein or by applicable Law. If, at any time after the Effective Time, Certificates are presented to the Surviving Company or the Paying Agent for any reason, they shall be cancelled and exchanged as provided in this clause 2.

2.6.3

No Liability. Notwithstanding any provision of this Deed to the contrary, none of the parties or the Surviving Company shall be liable to any person for Merger Consideration delivered to a Relevant Authority pursuant to any applicable abandoned property, escheat or similar Law.

2.6.4

Tax Withholding. The Paying Agent and the Surviving Company shall be entitled to deduct and withhold from any amount otherwise payable to any person pursuant to this Deed such amounts as are required to be deducted and withheld with respect to the making of such payment under any Taxation Statute. To the extent amounts are so withheld and paid over to the appropriate Tax Authority, the withheld amounts shall be treated for all purposes of this Deed as having been paid to the person in respect of which such deduction and withholding were made.

2.7	Dissenting Shares.

Notwithstanding any provision of this Deed to the contrary, Shares that are issued and outstanding immediately prior to the Effective Time and that are held by any person who is entitled to exercise, and properly exercises, dissenter’s rights with respect to such Shares pursuant to the Companies Act by reason of Section 161 thereof (the “Dissenting Shares”) and who complies in all respects with, the provisions of Section 161 of the Companies Act, shall not be converted into, exchangeable for or represent the right to receive, their respective portion of the Merger Consideration. Any such person shall instead be entitled to receive payment of the fair value of such person’s Dissenting Shares in accordance with the provisions of Part X of the Companies Act; provided, however, that all Dissenting Shares held by any person who shall have failed to perfect or who otherwise shall have withdrawn, in accordance with Part X of the Companies Act, or lost such person’s rights to demand payment in respect of such Dissenting Shares under Part X of the Companies Act shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive their respective portion of the Merger Consideration, without any interest thereon, upon surrender of the Certificate or Certificates that formerly evidenced such Shares in accordance with this Deed. For the elimination of doubt, a Participating Equityholder that owns or holds unexercised or unissued Oldford Share Awards, Oldford Share Options, or Interim Period Employee Shares, or Phantom Plan Equity Award Units, shall have no right to exercise dissenter’s rights with respect to such securities pursuant to the Companies Act.

2.8	Appointment of the Sellers’ Representative

Each Participating Equityholder irrevocably and unconditionally appoints by way of security the Sellers’ Representative as its agent and attorney, and authorises the Sellers’ Representative to act on its behalf and in its name, to do, perform, sign, execute and deliver every act, deed, document and thing required or permitted to be done, performed, signed, executed or delivered (as the case may be) in connection with the Contemplated Transactions, as fully to all intents and purposes as such Participating Equityholder might or could do in person, including to:

2.8.1

execute and deliver each of the Transaction Documents (other than this Deed, the Voting Agreement, Letter of Transmittal or the Senior Officer Agreements);

2.8.2

execute and deliver, from time to time, such amendments to the Transaction Documents (other than the Senior Officer Agreements), including for greater certainty the Deed, as the Sellers’ Representative deems necessary or desirable;

2.8.3

execute and deliver any and all instruments of transfer including share transfer deeds and endorsements;

2.8.4

give, from time to time, such waivers in relation to any Transaction Document as the Sellers’ Representative deems necessary or desirable;

2.8.5

deliver and receive any opinion, certificate or other document provided pursuant to, or in connection with, any Transaction Document and agree to waive the requirement for any such opinion, certificate or other document or modify the terms thereof to such extent and in such manner as the Sellers’ Representative deems necessary or desirable;

2.8.6

deliver any notice required to be delivered by any Participating Equityholder under, or in connection with, a Transaction Document;

2.8.7

receive any notices required to be delivered to any Participating Equityholder under, or in connection with, a Transaction Document;

2.8.8

authorise any payment to be made under, or in connection with, any Transaction Document;

2.8.9

take any and all action on behalf of any Participating Equityholder from time to time as the Sellers’ Representative may deem necessary or desirable to resolve and/or settle any claims under, or in connection with, any Transaction Document, including consenting to, pursuing, defending, compromising or settling any claim, conducting negotiations with Buyer regarding any such claim and engaging counsel, accountants or other agents in connection with any of the foregoing;

2.8.10

incur any other reasonable expenses in connection with all matters and actions set out in any Transaction Document, or otherwise in respect of the Contemplated Transactions;

2.8.11

interact with Buyer with respect to all matters arising under, or in connection with, any Transaction Document and make any other decision or election or exercise such rights, power and authority as are incidental to the foregoing;

2.8.12

instruct the Escrow Agent to transfer to the Expense Fund on the Release Date (or thereafter), out of the Indemnity Escrow Account, as the case may be, such funds as are available for distribution to the Sellers at such time, in an amount determined in good faith by the Sellers’ Representative, for purposes of performing the Sellers’ Representative duties and obligations under this clause 2.8; and

2.8.13

make use of the Expense Fund as may otherwise be required for purposes of performing the Sellers’ Representative duties and obligations pursuant to this Deed.

2.9	Replacement of the Sellers’ Representative

In the event of the death, disability or incapacity of Igal Mark Scheinberg, Pinhas Schapira shall automatically succeed Igal Mark Scheinberg as the Sellers’ Representative as if Pinhas Schapira had been appointed hereunder as of the date of this Deed and the provisions of clause 2.8 shall apply as if Pinhas Schapira had been so appointed. Igal Mark Scheinberg may resign as the Sellers’ Representative by delivering written notice thereof to Buyer, Sellers and Pinhas Schapira and, concurrently with the delivery of such notice, Pinhas Schapira shall automatically succeed Igal Mark Scheinberg as the Sellers’ Representative as if Pinhas Schapira had been appointed hereunder as of the date of this Deed and the provisions of clause 2.8 shall apply as if Pinhas Schapira had been so appointed. Upon the death, disability, incapacity or resignation of Pinhas Schapira as Seller’s Representative, Sellers who held, in the aggregate, 65% of the Transaction Percentage are required, within 30 days from such terminating event, to designate Pinhas Schapira’s successor as Sellers’ Representative by delivering a written notice to Buyer and the other Sellers who such designating Sellers reasonably believe is the appropriate person to carry out the duties and perform the obligations of the Sellers’ Representative pursuant to this Deed and the provisions of this clause 2.9 shall similarly apply to such designee. In the event that the Sellers fail to designate a successor Sellers’ Representative within the 30-day period as required by this clause 2.9, then the person with the highest Transaction Percentage shall automatically, without any further action, become the Sellers’ Representative as if such person had been appointed hereunder and Buyer shall be entitled to rely upon all instructions from such person in all circumstances.

2.10	Actions by the Sellers’ Representative and receipt

2.10.1

A decision, act, consent or instruction of the Sellers’ Representative, including an amendment, extension or waiver of this Deed, shall constitute a decision of the Sellers and shall be final, binding and conclusive upon the

Sellers; and Buyer may conclusively and absolutely rely, without any inquiry, upon any such decision, act, consent or instruction of the Sellers’ Representative as being the decision, act, consent or instruction of the Sellers. Buyer is hereby relieved from any Liability to any person, including any Seller, for any acts done by it in accordance with or reliance upon such written decision, act, consent or instruction of the Sellers’ Representative.

2.10.2

Receipt by the Paying Agent, the Escrow Agent or the Sellers’ Representative, in each case, at the Sellers’ Representative’s written instruction or consent, of any funds, or the receipt by the Sellers’ Representative of any completed documentation to be provided by Buyer in satisfaction of any of its obligations under this Deed, shall be deemed accepted by each of the Sellers as a full and complete discharge of that obligation and Buyer shall not be concerned with the basis upon which those funds or documents are distributed among the Sellers.

2.10.3

All notices, counter notices or other instruments or designations delivered by any Seller in regard to this Deed shall not be effective unless, but shall be effective if, signed by the Sellers’ Representative, and, if not, such document shall have no force or effect whatsoever, and Buyer and Oldford (after Completion) and any other person may proceed without regard to any such document.

2.10.4

All notices, counter notices or other communications required to be made or delivered by Buyer to Sellers shall be made to the Sellers’ Representative for the benefit of Sellers, and any notices so made shall discharge in full all notice requirements of Buyer to Sellers with respect thereto. All notices or other communications required to be made or delivered by Sellers to Buyer shall be made by the Sellers’ Representative for the benefit of Sellers and any notices so made shall discharge in full all notice requirements of Sellers to Buyer with respect thereto.

2.10.5

Each Participating Equityholder shall severally and not jointly indemnify and hold harmless the Sellers’ Representative and its successors, permitted assigns, Affiliates, directors, officers, employees and agents (collectively, “Seller Representative Indemnitees”) against all Losses incurred or sustained by a Seller Representative Indemnitee in connection with any Action to which such Seller Representative Indemnitee is made a party by reason of any act or omission in connection with its role as the Sellers’ Representative, except for fraud or wilful misconduct by the Sellers’ Representative or such Seller Representative Indemnitee. The Sellers’ Representative may reimburse himself for any amount incurred by or otherwise owing to the Sellers’ Representative under the terms of any Transaction Document (whether for fees, expenses, indemnification claims or otherwise) from the Expense Fund against proper invoices or receipts; provided, that if the Expense Fund is depleted, the Sellers’ Representative may reimburse himself from any portion of the Indemnity Escrow Amount that has been distributed to the Paying Agent for the benefit of the Participating Equityholders following the Release Date. In the event that the Sellers’ Representative determines that any expense or payment is appropriate or desirable in connection with the exercise of its duties as Sellers’ Representative or otherwise in connection with the protection of the rights of the Participating Equityholders, and if such amount is not available from the Expense Fund, then each Participating Equityholder shall, in accordance with instructions provided by the Sellers’ Representative, provide its pro-rata portion of such payment or expense (determined by the Transaction Percentage of each Participating Equityholder).

2.10.6

Each Seller hereby irrevocably and unconditionally releases and waives any and all claims and demands of any kind whatsoever (whether existing now or in the future, including with respect to contingent liabilities), it, she or he may or will have against the Sellers’ Representative and any Seller Representative Indemnitee in relation to the performance (or non-performance) of any of the rights and duties of the Sellers’ Representative pursuant to this Deed (including in respect of any Losses or Liabilities that such Seller may incur pursuant to any action or default of the Sellers’ Representative or any Seller Representative Indemnitee), except in the case of fraud or wilful misconduct by the Sellers’ Representative or such Seller Representative Indemnitee.

3.	MERGER CONSIDERATION

3.1	Aggregate Merger Consideration

The aggregate merger consideration payable for the Participating Shares is an amount equal to (the “Merger Consideration”):

(a)

the Confirmed Completion Date Purchase Price; plus

(b)

the Deferred Payment Amount,

which Merger Consideration shall be calculated by reference to and be payable in accordance with this clause 3.

3.2	Estimate of Merger Consideration

At least seven Business Days prior to the Completion Date, Oldford shall prepare in accordance with IFRS and deliver to Buyer the consolidated balance sheet of Oldford estimated as of the Completion Date (the “Estimated Completion Balance Sheet”) and a certificate (substantially in the form of Exhibit H attached hereto) executed by the chief financial officer of Oldford (the “Completion Certificate”) which shall include the following:

3.2.1

as at the Completion Date, in accordance with the Estimated Completion Balance Sheet, all Debt of Oldford as set out on the Estimated Completion Balance Sheet (the “Estimated Debt”);

3.2.2

as at the Completion Date, in accordance with the Estimated Completion Balance Sheet, the Net Working Capital as of the Completion Date (the “Estimated Net Working Capital”), which shall be made in a manner consistent with the example set forth in Schedule 2 (the “Net Working Capital and Other Adjustments Calculation”). Such example is for illustrative purposes only and neither Oldford nor the Warranting Sellers warrant that any of the results depicted in such example shall actually be achieved;

3.2.3

as applicable, either (i) the Fixed Reference Working Capital Amount or (ii) the Reference Working Capital Amount (as applicable, the “Estimated Reference Working Capital Amount”), which, in the case of this clause (ii), shall be made in a manner consistent with the example set forth in the Net Working Capital and other Adjustments Calculation; and

3.2.4

as at the Completion Date, in accordance with the Estimated Completion Balance Sheet, the Other Adjustments Amount, which shall additionally be made in a manner consistent with the example set forth in the Net Working Capital and Other Adjustments Calculation (the “Estimated Other Adjustments Amount”).

Following receipt of the Completion Certificate, Oldford shall provide Buyer and its Representatives with access to all accounting books and records reasonably requested by Buyer to review the Estimated Completion Balance Sheet, Estimated Debt, Estimated Net Working Capital, Estimated Reference Working Capital Amount and the Estimated Other Adjustments Amount and all work papers prepared by Oldford or its Representatives in connection with such calculations, and Oldford shall make reasonably available its Representatives responsible for the preparation of the Completion Certificate, Estimated Completion Balance Sheet, Estimated Debt, Estimated Net Working Capital, Estimated Reference Working Capital Amount and the Estimated Other Adjustments Amount in order to respond to inquiries of Buyer.

Prior to Completion, Oldford, the Sellers’ Representative and Buyer shall act reasonably in resolving in good faith any disagreements concerning the computation of any of the items included in the Completion Certificate or contained in the Estimated Completion Balance Sheet; provided, that it is acknowledged and agreed that if any disagreements cannot be resolved, then the Completion shall occur on the basis of the Estimated Completion Balance Sheet, Estimated Debt, Estimated Net Working Capital, Estimated Reference Working Capital Amount and the Estimated Other Adjustments Amount included with the Completion Certificate provided by Oldford and that any unresolved disagreements shall be deferred for resolution pursuant to the post-Completion Merger Consideration adjustment process described in clause 3.5.

3.3	Completion Date Payments

3.3.1

At the Effective Time, Buyer shall pay to the Paying Agent for the benefit of all the Participating Equityholders an amount equal to the sum of the following:

(a)

the Completion Date Purchase Price (as determined pursuant to clause 3.3.3 below); minus

(b)

the Deposit Amount; minus

(c)

the Indemnity Escrow Amount; minus

(d)

the Expense Fund Amount.

The sum of the foregoing clauses (a) through (e) above plus the Deposit Amount shall be referred to as the “Completion Date Payment to Participating Equityholders”.

The parties acknowledge that the Paying Agent will distribute the Completion Date Payment to Participating Equityholders’ to the Participating Equityholders in accordance with clause 2, the Participating Equityholders’ respective Letters of Transmittal and the terms of the Paying Agent Agreement (and, for the elimination of doubt, the Participating Equityholders will be entitled to receive, in accordance with and subject to clause 2, the Participating Equityholders’ respective Letters of Transmittal and the terms of the Paying Agent Agreement, an amount equal to the Per Share Completion Date Payment to Participating Equityholders for each of their respective Participating Shares).

3.3.2

At the Effective Time:

(a)

Buyer shall:

(i)

from the Completion Date Purchase Price, pay the Indemnity Escrow Amount to the Escrow Agent; and

(ii)

from the Completion Date Purchase Price, pay the Expense Fund Amount to the account of a person designated in writing by the

Sellers’ Representative (the “Expense Fund Agent”) (which, for the elimination of doubt, is a portion of the Completion Date Purchase Price that is payable at Completion to the Participating Equityholders).

(b)

Oldford shall deliver the Deposit Amount to the Paying Agent (which, for the elimination of doubt, is counted toward the Completion Date Purchase Price).

3.3.3

The portion of the Merger Consideration payable by Buyer pursuant to this Deed at the Effective Time for the benefit of the Participating Equityholders (the “Completion Date Purchase Price”) shall be equal to the sum of the following:

(a)

$4,500,000,000 (the “Cash Completion Date Amount”); minus

(b)

the Estimated Debt; minus

(c)

if the Estimated Net Working Capital is less than the Estimated Reference Working Capital Amount, the difference between the Estimated Reference Working Capital Amount and the Estimated Net Working Capital; plus

(d)

if the Estimated Net Working Capital is greater than the Estimated Reference Working Capital Amount, the difference between the Estimated Net Working Capital and the Estimated Reference Working Capital Amount; plus

(e)

the Estimated Other Adjustments Amount.

3.4	Deposit; Escrow; Expense Fund; Paying Agent;

3.4.1

Deposit Amount. Concurrently with the execution of this Deed, Buyer shall pay the Deposit Amount into an account designated in writing by Oldford (the “Deposit Account”). The Deposit Amount shall be held by Oldford in a segregated account until the earlier to occur of the following: (i) the Effective Time, in which case the Deposit Amount will be transferred by Oldford to the Paying Agent in partial satisfaction of the Completion Date Payment to Participating Equityholders; (ii) termination of this Deed that does not result in a Refund Event, in which case the Deposit Amount will be distributed by Oldford to the Paying Agent for the benefit of the Participating Equityholders pursuant to clause 8.6; and (iii) termination of this Deed that results in a Refund Event, in which case the Deposit Amount will be paid by Oldford to Buyer in accordance with clause 8.6.

3.4.2

Indemnity Escrow Agreement. To provide for an escrow to secure and to serve as a fund in respect of the obligations of Participating Equityholders under clause 9.1 and clause 9.2, Buyer, the Sellers’ Representative and Deutsche Bank (London Branch), as escrow agent (the “Escrow Agent”) shall, at Completion, enter into an escrow agreement substantially in the form of Exhibit I (the “Indemnity Escrow Agreement”). At the Effective Time, Buyer shall pay the Indemnity Escrow Amount to the Escrow Agent who shall deposit the Indemnity Escrow Amount into an account (the “Indemnity Escrow Account”) established by the Escrow Agent pursuant to the terms of the Indemnity Escrow Agreement. The Indemnity Escrow Amount shall be invested in accordance with investment guidelines specified in the Indemnity Escrow Agreement. Subject to clause 9.8.2 and clause 9.8.4, the Indemnity Escrow Amount shall always be the initial source for indemnification claims, and any claims shall always first be made against the

Indemnity Escrow Amount until it has been depleted. Subject to, and in accordance with, clause 9.8, the Indemnity Escrow Amount shall be distributed to the Paying Agent for the benefit of the Participating Equityholders (by wire transfer of immediately available funds), as follows:

(a)

all funds in respect of the Indemnity Escrow Amount then deposited in the Indemnity Escrow Account, including all interest and profits accrued thereon, minus the sum of any amounts in respect of claims by any Buyer Indemnified Person then pending (which claims made pursuant to, and in accordance with, clause 9), shall be distributed on the 18-month anniversary of the Completion Date (the “Release Date”); and

(b)

such amounts in respect of such claims pending as of the Release Date by any Buyer Indemnified Person for indemnification (made pursuant to, and in accordance with, clause 9) will be distributed to the Paying Agent for the benefit of the Sellers, subsequent to the Release Date, upon final and binding resolution of any such claim in favour of the Sellers; provided, that if such final and binding resolution is in favour of a Buyer Indemnified Person, any such amounts shall be distributed to such Buyer Indemnified Person, as applicable;

provided, further, that, notwithstanding anything to the contrary contained in this Deed, to the extent the Warranting Sellers indemnify (other than from the Indemnity Escrow Account or the Expense Fund), in accordance with Clause 9, any Buyer Indemnified Person in respect of any Losses suffered by such Buyer Indemnified Person (other than where such payment is in respect of breach of: (i) any of the of the Warranting Sellers’ individual Warranties set out in Schedule 6 Part 2, or (ii) any of the Warranting Sellers’ personal covenants or undertakings), then the Warranting Sellers will have the right to be reimbursed from any available funds deposited in the Indemnity Escrow Account upon their release to the Participating Equityholders pursuant to Clauses 3.4.2(a) or 3.4.2(b), so that each Participating Equityholder (including any Warranting Seller) will ultimately contribute such Participating Equityholder’s pro-rata portion of any such indemnified Losses, based on such Participating Equityholder’s Transaction Percentage.

3.4.3

Expense Fund.

(a)

The Sellers’ Representative and the Expense Fund Agent shall, at Completion, enter into an escrow agreement (the “Expense Fund Escrow Agreement”). Immediately following the Effective Time, the Paying Agent shall deposit the Expense Fund Amount into an account (the “Expense Fund”) established by the Expense Fund Agent. The Expense Fund shall be invested as determined by the Sellers’ Representative from time to time. The Expense Fund Amount and any interest and profit accrued thereon are for (i) the use by the Sellers’ Representative to pay any costs, fees, indemnities and other expenses related to the performance by the Sellers’ Representative of his duties and obligations hereunder, on behalf of the Participating Equityholders, and (ii) the payment of any amount in respect of indemnification of any Buyer Indemnified Person pursuant to clause 9 that is due and payable. Funds shall be disbursed from the Expense Fund in accordance with written instructions from the Sellers’ Representative to the Expense Fund Agent from time to time. The outstanding balance of the Expense Fund shall be distributed by the Expense Fund Agent to the Participating

Equityholders at such time as determined by the Sellers’ Representative in its discretion. The portion of the Expense Fund Amount allocable to each Participating Equityholder shall be determined by multiplying the aggregate amount in the Expense Fund by such Participating Equityholder’s Transaction Percentage. Neither Buyer nor any Affiliate thereof nor any of their respective Representatives shall have any interest, right, Encumbrance or claim in respect of the Expense Fund and any amounts held therein. Neither Buyer nor any Affiliate thereof shall be allowed to take any action with respect to, or grant to any person any right with respect to, the Expense Fund and any amounts held therein, or instruct the Sellers’ Representative, the Expense Fund Agent or any other person regarding any actions to take with respect to the Expense Fund and any amounts held therein. Buyer shall have no Liability for any actions or inactions taken by the Sellers’ Representative regarding the Expense Fund and any amounts held therein.

(b)

Notwithstanding anything to the contrary contained in this Deed, to the extent the Warranting Sellers indemnify (other than from the Indemnity Escrow Account or the Expense Fund), in accordance with Clause 9, any Buyer Indemnified Person in respect of any Losses suffered by such Buyer Indemnified Person (other than where such payment is in respect of breach of: (i) any of the of the Warranting Sellers’ individual Warranties set out in Schedule 6 Part 2, or (ii) any of the Warranting Sellers’ personal covenants or undertakings), then, following the Release Date, the Warranting Sellers will have the right to be reimbursed from any available funds deposited in the Expense Fund, so that each Participating Equityholder (including any Warranting Seller) will ultimately contribute such Participating Equityholder’s pro-rata portion of any such indemnified Losses, based on such Participating Equityholder’s Transaction Percentage.

3.4.4

Payment and Shortfall. Any amount in respect of indemnification of any Buyer Indemnified Person for indemnification pursuant to, and in accordance with, clause 9 that is due and payable shall be released from the Indemnity Escrow Account and distributed to such Buyer Indemnified Person promptly after it becomes due and payable (and in any event within five Business Days), subject always to the provisions and limitations set forth in clause 9 and the Indemnity Escrow Agreement; provided, that to the extent such amount exceeds the portion of the Indemnity Escrow Amount then deposited in the Indemnity Escrow Account, then, subject to clause 3.4.3, (i) in case of a breach by a Participating Equityholder of (A) any of such Participating Equityholder’s Warranties set out in such Participating Equityholder’s Letter of Transmittal, or (B) any of such Participating Equityholder’s personal covenants or undertakings as set forth in such Participating Equityholder’s Letter of Transmittal, such Participating Equityholder will be liable to pay such excess promptly after becoming due and payable (and in any event within seven Business Days), and (ii) in all other cases, such excess will be paid promptly after becoming due and payable (and in any event within seven Business Days) by the Warranting Sellers to the Buyer on a pro-rata basis among the Warranting Sellers in accordance with each Warranting Seller’s Indemnification Percentage. For purposes of this Deed and the Indemnity Escrow Agreement, any amounts in respect of indemnification of any Buyer Indemnified Persons under this Deed shall become “due and payable” only upon either (a) a joint release or (b) pursuant to, and as specified in, an Arbitration Award rendered in accordance with clause 19.

3.4.5

Paying Agent Agreement. The Sellers’ Representative, Buyer and the Paying Agent shall, at Completion, enter into a paying agent agreement in form reasonably agreed to by Sellers’ Representative and Buyer (the “Paying Agent Agreement”) under which the Paying Agent shall, (a) act as paying agent with respect to the payment to each Participating Equityholder of such Participating Equityholder’s portion of the Merger Consideration to Participating Equityholders upon receipt by the Paying Agent of such Participating Equityholder’s duly executed Letter of Transmittal; (b) act as paying agent with respect to the payment to each Participating Equityholder of such Participating Equityholder’s portion of the Merger Consideration Adjustments, if any; (c) act as paying agent with respect to the payment to each Participating Equityholder of such Participating Equityholder’s portion of the Deferred Payment Amount; (d) act as paying agent with respect to the payment to each Participating Equityholder of any funds released from the Indemnity Escrow Account in accordance with this Deed and the Indemnity Escrow Agreement; and (e) act as paying agent with respect to the payment to each Participating Equityholder of any funds authorised by the Sellers’ Representative for release from the Expense Fund, in each of (a) through (e), in accordance with each Participating Equityholder’s Transaction Percentage, and (f) act as paying agent with respect to the payment of certain transaction expenses incurred by the Participating Equityholders in connection with the Contemplated Transactions.

3.5	Post-Completion Merger Consideration Adjustment

3.5.1

As soon as practicable, but in no event more than 90 days following the Completion Date, Buyer shall prepare, or cause to be prepared, and deliver to the Sellers’ Representative the following:

(a)

a consolidated balance sheet of Oldford as of the Completion Date prepared in accordance with IFRS (the “Completion Balance Sheet”); and

(b)

a certificate substantially in the form of Exhibit K executed by Buyer’s chief financial officer (the “Final Completion Statement”), setting forth each of the following:

(i)

as at the Completion Date, as set forth on the Completion Balance Sheet, the actual aggregate amount of Debt of Oldford (the “Actual Debt”);

(ii)

as at the Completion Date, as set forth on the Completion Balance Sheet, the actual Net Working Capital as of the Completion Date (“Actual Net Working Capital”), which shall be prepared in a manner consistent with the Net Working Capital and Other Adjustments Calculation;

(iii)

as applicable, either (A) the Fixed Reference Working Capital Amount or (B) the Reference Working Capital Amount (as applicable, the “Actual Reference Working Capital Amount”), which, in the case of this clause (B), shall be prepared in a manner consistent with the Net Working Capital and Other Adjustments Calculation; and

(iv)

as at the Completion Date, in accordance with the Completion Balance Sheet, the Other Adjustments Amount, which shall additionally be made in a manner consistent with the example set forth in the Net Working Capital and Other Adjustments Calculation (the “Actual Other Adjustments Amount”).

3.5.2

Sellers and their accountants shall complete their review of the Completion Balance Sheet and Final Completion Statement within 45 days after Buyer’s delivery thereof to the Sellers’ Representative. During such review period, Buyer shall provide the Sellers’ Representative with access to all accounting books and records reasonably requested by the Sellers’ Representative to review the Completion Balance Sheet and the Final Completion Statement and all work papers prepared by Buyer or its accountants in connection with such calculations, and Buyer shall make reasonably available its Representatives responsible for the preparation of the Completion Balance Sheet and Final Completion Statement in order to respond to the inquiries of the Sellers’ Representative. Failure by Buyer to provide such access and other cooperation in a timely manner shall have the effect of extending the 45-day period set out in this clause and in clause 3.5.3, which extended period shall be agreed in good faith by Buyer and the Sellers’ Representative (and if they fail to so agree, then as determined by the CA Firm in accordance with the procedures set out in clause 3.7).

3.5.3

If the Sellers’ Representative objects to the Completion Balance Sheet or Final Completion Statement for any reason, the Sellers’ Representative shall, on or before the last day of such 45-day period, so inform Buyer in writing (for purposes of this clause 3.5, a “Sellers’ Objection”), setting forth a specific description of the basis of the Sellers’ Representative’s determination and the adjustments to the Completion Balance Sheet or Final Completion Statement that the Sellers’ Representative believes should be made. If the Sellers’ Representative does not transmit a Sellers’ Objection on or before the last day of such 45-day period, then all items described on the Completion Balance Sheet and Final Completion Statement delivered by Buyer to the Sellers’ Representative shall be deemed agreed, final and binding on the parties.

3.5.4

If the Sellers’ Representative timely delivers a Sellers’ Objection to Buyer and the Sellers’ Representative and Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in the Sellers’ Objection within 30 days following Buyer’s receipt of Sellers’ Objection, then, in accordance with the procedures set forth in clause 3.7, they shall jointly retain the CA Firm, which, acting as an expert and not as an arbitrator, shall determine, on the basis set forth in and in accordance with this clause 3.5, and only with respect to those items specifically described in Sellers’ Objection on which Buyer and the Sellers’ Representative have not agreed, whether and to what extent, if any, the Completion Balance Sheet or Final Completion Statement (including Actual Debt, Actual Net Working Capital, the Actual Reference Working Capital Amount and the Actual Other Adjustments Amount) require adjustment.

3.5.5

The Completion Balance Sheet and Final Completion Statement (including Actual Debt, Actual Net Working Capital, Actual Reference Working Capital Amount and the Actual Other Adjustments Amount), as agreed to (or deemed to have been agreed to) between Buyer and the Sellers’ Representative or as determined by the CA Firm, as applicable, shall be conclusive and binding and shall be deemed the “Confirmed Completion Balance Sheet”, “Confirmed Debt”, “Confirmed Net Working Capital”, the “Confirmed Reference Working Capital Amount” and the “Confirmed Other Adjustments Amount”, respectively, for all purposes herein.

3.5.6

Upon final determination of the calculation of the Confirmed Completion Balance Sheet, Confirmed Debt, Confirmed Net Working Capital, Confirmed Reference Working Capital Amount and Confirmed Other Adjustments Amount in accordance with this clause 3.5, the Completion Date Purchase

Price shall be recalculated with reference to the Confirmed Debt, Confirmed Net Working Capital, the Confirmed Reference Working Capital Amount and the Confirmed Other Adjustments Amount, and the following adjustments (“Merger Consideration Adjustments”) made:

(a)

If the Confirmed Completion Date Purchase Price is greater than the Completion Date Purchase Price then Buyer shall pay such difference to the Paying Agent for the benefit of the Participating Equityholders by wire transfer of immediately available funds to a single account designated by the Paying Agent within two Business Days.

(b)

If the Confirmed Completion Date Purchase Price is less than the Completion Date Purchase Price, then within two Business Days thereafter any amount owed to Buyer as a Merger Consideration Adjustment shall be paid by the Sellers’ Representative on behalf of the Participating Equityholders to Buyer by wire transfer of immediately available funds to an account designated by Buyer.

3.6	Deferred Payment

3.6.1

Deferred Payment; Standstill

(a)

As additional consideration for the Participating Shares, and subject only to the occurrence of Completion pursuant to this Deed, Buyer shall pay to the Paying Agent for the benefit of the Participating Equityholders on the earlier to occur of: (i) July 31, 2017, and (ii) the date that is 30 months following the Completion Date (the “Deferred Payment Date”) an amount equal to $400,000,000, as may be adjusted pursuant to Exhibit C and clause 1.1.3(a), (the “Deferred Payment Amount”). Buyer shall pay the Deferred Payment Amount to the Paying Agent, for the benefit of the Participating Equityholders, in cash by wire transfer of immediately available funds to a single account designated at least two Business Days prior to the Deferred Payment Date in writing by the Sellers’ Representative. Such payment is a part of the Merger Consideration and shall not bear interest

(b)

If either (i) the Financing Sources (or their respective agents) under the Buyer Credit Agreements accelerate the maturity of the Debt outstanding thereunder such that all or any portion of such Debt becomes immediately due and payable, or (ii) there is a change of control (as such term or similar term is defined in the Buyer Credit Agreements) of Buyer Parent, Buyer or Oldford, then the unpaid portion of the Deferred Payment Amount shall become immediately due and payable by Buyer; provided, that Participating Equityholders’ right to receive any portion of the unpaid Deferred Payment Amount shall be subordinated in right of payment to the lenders’ respective rights to receive payment of any and all amounts due and payable in full under the Buyer Credit Agreements, including in the case of any Insolvency Event of Buyer or Buyer Parent.

(c)

Subject to clause 3.6.1(b), the Participating Equityholders and the Sellers’ Representative agree that during the Standstill Period none of them will enforce or seek to enforce (whether by threatening or instituting any Action or otherwise) against Buyer or its Affiliates with respect to Buyer’s obligation to pay the Deferred Payment Amount to the Participating Equityholders pursuant to clause 3.6.1, including any rights of indemnity, contribution, subrogation or set-off. If Buyer fails to pay

any portion of the Deferred Payment Amount on the Deferred Payment Date, such unpaid portion of the Deferred Payment Amount shall accrue a monthly late payment fee for each month of delay equal to the product of such unpaid portion times either (i) the sum of 30 day LIBOR, plus 85 basis points for all months prior to the sixth-month anniversary of such failure to pay or (ii) the sum of 30 day LIBOR plus 135 basis points for all months after the sixth-month anniversary of such failure to pay. For example, if the unpaid portion of the Deferred Payment Amount is $400 million and 30 day LIBOR is 15 basis points, then in the first month after such failure to pay the late payment fee would be $400 million x (15 bps + 85bps) = $4 million, and in the seventh month of such failure to pay the late payment fee would be $400 million x (15 bps + 135bps) = $6 million. For purposes of this clause 3.6.1, “LIBOR” means the British Bankers Association LIBOR Rate, as published by Reuters (or any other commercially available source providing quotations of BBA LIBOR).

(d)

Each Participating Equityholder shall be entitled to receive in respect of each Participating Share held by such Participating Equityholder immediately prior to the Effective Time (in accordance with and subject to clause 2, such Participating Equityholder’s Letter of Transmittal and the procedures set forth in the Paying Agent Agreement), an amount equal to the Per Share Deferred Payment Consideration.

3.6.2

Establishment and Investment of the Cash Account

(a)

To the extent permitted under the Buyer Credit Agreements, at the end of each calendar month during the period commencing on the Completion Date and ending on the date on which the Deferred Payment Amount is paid in full to the Participating Equityholders (the “Required Deposit Period”), Buyer will deposit into a separate bank account established by Buyer (the “Cash Account”) an amount equal to 35% of monthly “excess cash flow”, as expected to be defined under the Buyer Credit Agreements, but for the avoidance of doubt generally equal to EBITDA less change in net working capital, less maintenance capex, less growth capex, less cash Taxes paid, less cash interest, less scheduled debt principal repayments. Buyer agrees that, to the extent permitted under the Buyer Credit Agreements, the balance in the Cash Account, including all interest or other investment gains thereon (collectively, the “Cash Account Balance”), shall be “restricted cash” that may be used by Buyer solely for payment of the Deferred Payment and may not be withdrawn from the Cash Account for any other reason, except in all cases to the extent required under the Buyer Credit Agreements.

(b)

Buyer shall cause the Cash Account Balance to be invested in U.S. Dollar-denominated government bonds or bank deposits at money center banks or similar securities, in accordance with the investment guidelines set forth in the Indemnity Escrow Agreement. At the end of each calendar month during the Required Deposit Period, Buyer shall provide the Sellers’ Representative with a copy of the bank statement showing the Cash Account Balance promptly following Buyer’s receipt of such statement from the institution at which Buyer established the Cash Account, or else provide the Sellers’ Representative with read-only internet access to view the Cash Account Balance.

(c)

If, on the Deferred Payment Date Buyer, fails to pay the Deferred Payment amount in full, and the Cash Account Balance is insufficient to pay the Deferred Payment Amount, then Buyer shall use its commercially reasonable efforts to issue equity securities for cash consideration sufficient to pay, subject to the terms of the Buyer Credit Agreements, the balance of the Deferred Payment Amount, together with any late payment fees accrued thereon until the date of actual payment.

3.6.3

prepayment of the Deferred Payment Amount

(a)

At Buyer’s election Buyer may pay all or any portion of the Deferred Payment Amount prior to the Deferred Payment Date at a discount of 6% per annum; provided that any such prepayment shall be in an amount of not less than $50 million.

(By way of example, if Buyer elects to prepay $100 million of the Deferred Payment Amount on the date that is one year prior to the Deferred Payment Date, then Buyer would pay to the Paying Agent for the benefit of the Participating Equityholders an amount equal to $94.34 million, which payment will reduce the remaining balance of the Deferred Payment Amount due on the Deferred Payment Date by $100 million).

3.7	CA Firm procedures

In the event that a Sellers’ Objection is submitted to the CA Firm for resolution pursuant to clause 3.5.3, the parties agree as follows:

3.7.1

At the time of retention of the CA Firm, Buyer shall specify in writing to the CA Firm and the Sellers’ Representative the amount of Buyer’s computation of the Completion Date Purchase Price (the “Buyer’s Position”), and the Sellers’ Representative shall specify in writing to the CA Firm and to Buyer the amount of Sellers’ computation of the Completion Date Purchase Price (the “Sellers’ Position”). If permitted pursuant to clause 3.5.2, the Sellers’ Representative shall be entitled to approach the CA Firm (with a copy sent to the Buyer), requesting the CA Firm to determine whether the 45-day period afforded to the Sellers’ Representative to dispute the Buyer’s Position should be extended, while specifying in reasonably sufficient detail the reasons for such extension. In such event, the Buyer shall have a right to object to such extension while providing to the CA Firm and the Sellers’ Representative the Buyer’s reasons for such objection (such reasons to be set out in reasonably sufficient detail).

3.7.2

Buyer and the Sellers’ Representative shall instruct the CA Firm to deliver its written determination to Buyer and the Sellers’ Representative no later than 30 days after submitting the matter to it for resolution (including the submission of Buyer’s Position and the Sellers’ Position).

3.7.3

Buyer and the Sellers’ Representative shall cooperate with the CA Firm during its resolution of the disagreement and make readily available to the CA Firm all relevant books and records and all work papers (including those of the parties’ respective accountants) relating to the matter in controversy and all other items reasonably requested by the CA Firm in connection therewith.

3.7.4

In resolving any disputed item:

(a)

the CA Firm may not assign a value to any disputed item that is greater than the greatest value claimed by Buyer or the Sellers’ Representative at the time the CA Firm is retained or less than the smallest value claimed for the item by Buyer or the Sellers’ Representative at such time;

(b)

the CA Firm (i) shall be bound by the provisions of this clause 3 and the applicable definitions set forth in this Deed, (ii) shall limit its decision to such items as are in dispute, (iii) shall make its determination utilising IFRS as in effect on the Completion Date and (iv) shall make its determination based solely on presentations by Buyer and the Sellers’ Representative that are in accordance with the guidelines and procedures set forth in this Deed (i.e., not on the basis of independent review); and

(c)

the fees and disbursements of the CA Firm (collectively, the “CA Firm Dispute Expenses”) shall be borne (i) by Sellers in that proportion equal to a fraction (expressed as a percentage) the numerator of which is equal to Sellers’ Position minus the Completion Date Purchase Price determined by the CA Firm, and the denominator of which is equal to Sellers’ Position minus Buyer’s Position, and (ii) by Buyer in that proportion equal to a fraction (expressed as a percentage) equal to one minus the fraction described in clause (i). For example, if Sellers’ Position is that the Completion Date Purchase Price should be $4,500,000,000 and Buyer’s Position is that the Completion Date Purchase Price should be $4,400,000,000, the CA Firm determines that the Completion Date Purchase Price should be $4,460,000,000 and the CA Firm Dispute Expenses are $100,000, then (A) Sellers shall pay $40,000 (40%) of the CA Firm Dispute Expenses and (B) Buyer shall pay $60,000 (60%) of the CA Firm Dispute Expenses. In addition, Buyer and Sellers acknowledge and agree that all fees and expenses incurred by them for legal advisors, accountants and other experts in connection with any matter related to a Sellers’ Objection shall be borne solely and exclusively by Buyer or Sellers, respectively (as the case may be), irrespective of the CA Firm’s findings.

3.7.5

The CA Firm’s determination shall be conclusive and binding upon Buyer and Sellers, save in the event of a manifest mathematical error (when the relevant part of the determination shall be void and the matter shall be remitted to the CA Firm for correction).

4.	CONDITIONS TO COMPLETION

4.1	Conditions for the benefit of the parties

The respective obligations of Buyer, Oldford and the Warranting Sellers to consummate the Contemplated Transactions are subject to the satisfaction, at or prior to Completion, of each of the Conditions set forth on Schedule 3, part 1 (any one or more of which may be waived in writing by Buyer, Oldford or the Sellers’ Representative, as applicable, in whole or in part).

4.2	Conditions for the benefit of Buyer

Buyer’s obligations to consummate the Contemplated Transactions and to take the other actions required to be taken by Buyer at Completion are subject to the satisfaction, at or prior to Completion, of each of the Conditions set forth on Schedule 3, part 2 (any one or more of which may be waived in writing by Buyer, in whole or in part).

4.3	Conditions for the benefit of the Warranting Sellers and Oldford

Oldford’s obligation to consummate the Contemplated Transactions, and Warranting Sellers’ and Oldford’s respective obligations to take the other actions required to be taken at Completion are subject to the satisfaction, at or prior to Completion, of each of the Conditions set forth on Schedule 3, part 3 (any one or more of which may be waived in writing by the Sellers’ Representative or Oldford, in whole or in part).

5.	INTERIM PERIOD COVENANTS OF THE PARTIES

During the Interim Period, the parties shall comply with the covenants and obligations set forth in Schedule 4.

6.	COMPLETION

6.1	Completion

Completion shall take place at 9:00 a.m. at the offices of Cains, Fort Anne, Douglas, Isle of Man, IM1 5PD, on the Completion Date.

6.2	Completion arrangements

At Completion, the Warranting Sellers, Oldford and Buyer shall deliver all documents and instruments and do all those things respectively required of them in Schedule 5.

7.	WARRANTIES

7.1	Warranties by each party

7.1.1

Oldford and each Warranting Seller warrant to Buyer (on a several and not joint basis) in the terms of the Warranties set forth in Schedule 6, part 1, to the extent these Warranties relate to the Oldford Group Companies and the Business and acknowledge that these Warranties were delivered to Buyer with the intention of inducing Buyer to enter into this Deed and that Buyer has entered into this Deed in reliance upon such Warranties.

7.1.2

Each Warranting Seller warrants to Buyer (on a several and not joint basis) in the terms of the Warranties set forth in Schedule 6, part 2, solely to the extent these Warranties relate to each Warranting Seller, and each Warranting Seller acknowledges that such Warranties were delivered to Buyer with the intention of inducing Buyer to enter into this Deed and that Buyer has entered into this Deed in reliance upon such Warranties.

7.1.3

Each of Buyer and Buyer Parent warrants to Oldford and the Warranting Sellers in the terms of the Warranties set forth in Schedule 6, part 3, to the extent these Warranties relate to each of Buyer and Buyer Parent, and acknowledges that such Warranties were delivered to Oldford and the Warranting Sellers with the intention of inducing them to enter into this Deed and that they have entered into this Deed in reliance upon such Warranties.

7.1.4

Merger Sub warrants to Oldford and the Warranting Sellers in the terms of the Warranties set forth in Schedule 6, part 4 and acknowledges that such Warranties were delivered to Oldford and the Warranting Sellers with the intention of inducing them to enter into this Deed and that they have entered into this Deed in reliance upon such Warranties.

7.1.5

Each of the Warranties shall be construed as a separate and independent Warranty.

7.1.6

For the elimination of doubt, (a) neither Oldford nor the Warranting Sellers make warranties to Buyer regarding the Oldford Group Companies or the Business other than such Warranties set forth in Schedule 6, part 1; (b) no Warranting Seller makes or warranties to Buyer with respect to such Warranting Seller, other than such Warranties set forth in Schedule 6, part 2, as applicable; (c) neither Buyer nor Buyer Parent makes any warranties to

Oldford and the Warranting Sellers with respect to itself other than such Warranties set forth in Schedule 6, part 3, as applicable; and (d) Merger Sub makes no warranties to Oldford and the Warranting Sellers with respect to itself other than such Warranties set forth in Schedule 6, part 4.

7.2	Disclosure

Subject to and without prejudice to clause 7.3,

7.2.1

the Warranties shall be qualified by, and the Buyer shall be deemed to have knowledge of the matters, events and circumstances fairly disclosed to the Buyer in the Disclosure Letter and the Disclosure Documents (including the Disclosure Documents themselves); and

7.2.2

matters, events and circumstances fairly disclosed in a particular section contained in the Disclosure Letter, or fairly disclosed in the Disclosure Documents, shall be deemed to qualify each Warranty to which such disclosure is applicable provided that the relevance and applicability of such disclosure to each such Warranty is reasonably apparent on its face.

7.3	Fair disclosure

7.3.1

A matter, event or circumstance disclosed in the Disclosure Letter or in the Disclosure Documents shall not be deemed fairly disclosed unless:

(a)

in the context of the disclosures contained in the Disclosure Letter, the information disclosed is presented in a manner that is not misleading in any material respect; and

(b)

in the context of any Disclosure Document (or set of related Disclosure Documents), the matter disclosed is reasonably apparent from the terms of such Disclosure Document(s).

7.3.2

Notwithstanding anything to the contrary in any Transaction Document, but without prejudice to any disclosure made in the Disclosure Letter, Oldford and the Warranting Sellers specifically agree that:

(a)

no Disclosure Document shall be deemed to qualify any Fundamental Warranty;

(b)

no Disclosure Document shall be deemed to qualify any Warranty in respect of the Oldford Stipulation;

(c)

no Disclosure Document shall be deemed to qualify the Tax Covenant;

(d)

no Disclosure Document shall be deemed to qualify any Warranty set forth in Schedule 6, part 1, clauses 21.3 and 21.5; and Schedule 6, part 2, clause 2.10;

(e)

the only Disclosure Documents which shall be deemed to qualify any Warranty in respect of Gaming Approvals shall be those Disclosure Documents contained in folders 10 (Regulatory), 14 (Litigation), and Email Disclosures Section 6 (Confidential) of the Data Room;

(f)

the only Disclosure Documents which shall be deemed to qualify any Warranty in respect of Actions shall be those Disclosure Documents contained in folders 10 (Regulatory), 12 (Data Protection), 14 (Litigation), Email Disclosures Section 6 (Confidential), 17 (HR) and 19 of the Data Room;

(g)

nothing disclosed by Oldford or a Warranting Seller to Buyer other than in the Disclosure Letter or the Disclosure Documents and in accordance with the provisions of clause 7.2 and this clause 7.3 shall constitute disclosure for the purposes of this Deed.

8.	TERMINATION

8.1	Termination by mutual consent

This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by mutual written consent of Buyer and the Sellers’ Representative.

8.2	Termination by either Buyer or Sellers

This Deed may be terminated and the Contemplated Transactions may be abandoned by either the Sellers’ Representative or Buyer (the party exercising such right under this clause 8.2, the “Terminating Party”) by providing the other party a written notice if Completion has not occurred on or before the date set forth on Exhibit B-3 (the “Initial Long Stop Date”) or such other date as may be extended pursuant to this clause 8.2; provided, however; that the Terminating Party may not terminate this Deed pursuant to this clause 8.2 if, at the time the Terminating Party provides notice of such termination, the Terminating Party (which, in case the Terminating Party is the Sellers’ Representative, shall include Sellers’ Representative, any Seller or any Oldford Group Company, and which, in the case the Terminating Party is Buyer, shall include Buyer or Buyer Parent) is in breach of its Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 3 (in case the Terminating Party is Buyer) or Schedule 3, part 2 (in case the Terminating Party is the Sellers’ Representative) not to be satisfied; provided, further, that:

8.2.1

if the Conditions set forth in Schedule 3 have not been satisfied (or waived by the party or parties entitled thereto) by the Initial Long Stop Date, then either the Sellers’ Representative or Buyer (such party, the “Exercising Party”) may extend the Initial Long Stop Date for an additional period of 60 days and, if so extended, again for an additional period of 60 days (the last date of such 60-day period, the “Extended Long Stop Date”) in each case by providing written notice thereof to the other party at least three Business Days prior to the expiration of the Initial Long Stop Date and, thereafter, the then applicable Extended Long Stop Date, but only if:

(a)

the Exercising Party is actively and diligently pursuing in good faith the satisfaction of the Condition(s) that have not yet been satisfied or waived; and

(b)

if the Buyer is the Exercising Party, the Financing Commitments are valid through the expiration of the applicable Extended Long Stop Date; and

8.2.2

if the Conditions set forth in Schedule 3 have not been satisfied (or waived by the party or parties entitled thereto) by the Extended Long Stop Date (and such Extended Long Stop Date may no longer be extended pursuant to clause 8.2.1), then Buyer may elect to extend the Extended Long Stop Date for one or more additional periods of 60 days each (each, an “Extension Period” and, the last day of the applicable Extension Period, the “Extension Period Stop Date”) by providing written notice thereof to the Sellers’ Representative at least three Business Days prior to the expiration of the Extended Long Stop Date and, thereafter, the then applicable Extension Period Stop Date, but only if:

(a)

concurrently with Buyer’s notice to the Sellers’ Representative of Buyer’s election to effect an Extension Period, Buyer shall deliver $10,000,000 in immediately available funds to Oldford (which amount shall be added to, and be regarded as, part of the Deposit Amount for all purposes of this Deed);

(b)

Buyer is actively and diligently pursuing in good faith the satisfaction of the Condition(s) that have not yet been satisfied or waived; and

(c)

the Financing Commitments are valid through the expiration of the applicable Extension Period Stop Date.

Notwithstanding the foregoing, (a) in no event shall any Extension Period extend past the date set forth on Exhibit B-4 (the “Final Long Stop Date”), and, if Buyer delivers notice to the Sellers’ Representative of Buyer’s election to effect an Extension Period that would otherwise extend past the Final Long Stop Date, then (i) such Extension Period shall terminate on the Final Long Stop Date, and (ii) the $10,000,000 paid in respect of such Extension Period shall be reduced pro rata based upon the actual number of days in such Extension Period, and (b) the Exercising Party may not extend the Long Stop Termination Effective Date pursuant to this clause 8.2 if, at the time the Exercising Party provides notice of such extension, the Exercising Party (which, in case the Exercising Party is the Sellers’ Representative, shall include Sellers’ Representative, any Seller or any Oldford Group Company, and which, in the case the Exercising Party is Buyer, shall include Buyer or Buyer Parent) is in breach of its Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 3 (in case the Exercising Party is Buyer) or Schedule 3, part 2 (in case the Exercising Party is the Sellers’ Representative) not to be satisfied.

The date on which this Deed terminates pursuant to this clause 8.2 is the “Long Stop Termination Effective Date”.

8.3	Termination by Buyer

8.3.1

Material Breach of Warranties as of Signing. This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by Buyer if:

(a)

any of the following occurs prior to Completion:

(i)

any of the Fundamental Warranties of Oldford or the Warranting Sellers fails to have been true and correct in all respects as of the date of this Deed (or, with respect to those Fundamental Warranties that relate to a particular date, any such Fundamental Warranty fails to have been true and correct in all respects as of such date);

(ii)

any of the Warranties (other than Fundamental Warranties) of Oldford or the Warranting Sellers contained in Schedule 6, part 1 or part 2, as applicable, that is qualified by a reference to materiality, a Material Adverse Effect or any similar qualifier (any such qualification referred to herein as a “Materiality Qualifier”) fails to have been true and correct in all respects as written as of the date of this Deed (or, with respect to such Warranties that are qualified by a reference to a Materiality Qualifier that relate to a particular date, any such Warranty fails to have been true and correct in all respects (including the Materiality Qualifier) as of such date); or

(iii)

any of the Warranties (other than Fundamental Warranties) of Oldford or the Warranting Sellers contained in Schedule 6, part 1 or part 2, as applicable that is not qualified by a Materiality Qualifier fails to have been true and correct in all material respects as of the date of this Deed (or, with respect to such Warranties that are not so qualified and relate to a particular date, any such Warranty fails to have been true and correct in all material respects as of such date); and

(b)

such failure to be true and correct is not cured (if curable) within 30 days after Buyer provides written notice of such failure to the Sellers’ Representative;

provided, however, that Buyer may not terminate this Deed pursuant to this clause 8.3.1 if (i) Sellers or Oldford cure such failure within such 30-day cure period, or (ii) at the time Buyer provides notice of such termination, Buyer or Buyer Parent is in breach of its Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 3 to not be satisfied.

8.3.2

Material Breach of Warranties Post-Signing. This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by Buyer if:

(a)

any Warranty made by Oldford or any Warranting Seller in this Deed shall fail to be true and correct following the date of this Deed as a result of any event, fact or circumstance that occurs or arises following the date of this Deed (a “Post-Signing Event”) such that Schedule 3, part 2, paragraph 2.1 or paragraph 2.5, as the case may be, would not then be satisfied; and

(b)

such breach or failure to be true and correct is not cured (if curable) within 30 days after Buyer provides written notice of such breach or failure to the Sellers’ Representative;

provided, however, that Buyer may not terminate this Deed pursuant to this clause 8.3.2 if (i) Sellers or Oldford cure such breach or failure within such 30-day cure period, or (ii) at the time Buyer provides notice of such termination, Buyer or Buyer Parent is in breach of its Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 3 to not be satisfied.

8.3.3

Breach of Covenant or Agreement. This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by Buyer if:

(a)

there has been any breach, default or violation of any covenant or agreement made by Oldford or any Warranting Seller in this Deed such that Schedule 3, part 2, paragraph 2.2 or paragraph 2.5, as the case may be, would not then be satisfied; and

(b)

such breach, default or violation is not cured (if curable) within 30 days after Buyer provides written notice of such breach, default or violation to the Sellers’ Representative;

provided, however, that Buyer may not terminate this Deed pursuant to this clause 8.3.3 if (i) Sellers or Oldford cure such breach, default or violation within such 30-day cure period, or (ii) at the time Buyer provides notice of such termination, Buyer or Buyer Parent is in breach of its Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 3 to not be satisfied.

8.3.4

Occurrence of a Material Adverse Effect. This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by Buyer if a Material Adverse Effect shall have occurred.

8.4	Termination by Sellers

This Deed may be terminated and the Contemplated Transactions may be abandoned at any time prior to Completion by the Sellers’ Representative if there has been a breach of any Warranty, covenant or agreement made by Buyer or Buyer Parent in this Deed, or any such Warranty shall have become untrue or incorrect after the execution of this Deed, such that any of the Conditions set out in Schedule 3, part 3 would not then be satisfied and such breach or failure to be true and correct is not cured (if curable) within 30 days after the Sellers’ Representative provides written notice of such breach or failure to Buyer; provided, however, that the Sellers’ Representative may not terminate this Deed pursuant to this clause 8.4 if (a) Buyer or Buyer Parent cures such breach or failure within such 30-day cure period, or (b) at the time the Sellers’ Representative provides notice of such termination, the Sellers’ Representative is in breach of its covenants or agreements under this Deed or Oldford or any Warranting Seller is in breach of their respective Warranties, covenants or agreements under this Deed so as to cause any of the Conditions set out in Schedule 3, part 2 to not be satisfied.

8.5	Effect of termination

In the event of the termination of this Deed and the abandonment of the Contemplated Transactions pursuant to this clause 8, this Deed shall become void and of no force or effect with no Liability on the part of any party (or of any of their respective Affiliates or Representatives) under this Deed or in connection with the Contemplated Transactions, except as follows:

8.5.1

in the event this Deed is terminated other than as a result of a Refund Event, Oldford shall retain the Deposit Amount pursuant to clause 8.6;

8.5.2

nothing herein shall relieve any party from liability for any damages for, or prohibit any such party from seeking injunctive relief (including specific performance pursuant to clause 19.3) as a result of:

(a)

a knowing and intentional breach of any provision of this Deed; or

(b)

fraud, dishonesty, or wilful misconduct.

8.5.3

in the event of a termination of this Deed pursuant to clause 8.3.2 which does not constitute a Refund Event, then:

(a)

if Buyer’s Financing Commitment shall have terminated, notwithstanding Buyer’s best endeavours to maintain the Financing Commitment following the date of this Deed or to obtain Alternative Financing, then Buyer’s Liability shall be limited to the Deposit Amount, which shall be deemed paid through retention of the Deposit Amount by Oldford; or

(b)

if Buyer’s Financing Commitment remains in effect at the time of such termination or Buyer shall have failed to use its best endeavours to maintain such Financing Commitment following the date of this Deed or to obtain Alternative Financing, then Buyer’s Liability shall be an amount equal to sum of the Deposit Amount and $50,000,000 (the “Additional Fee” and together with the Deposit Amount, the “Buyer Termination Fee”)), of which (A) the Deposit Amount shall be deemed paid through retention of the Deposit Amount by Oldford, and (B) the Additional Fee shall be paid by Buyer to Oldford no later than 30 days following such termination;

8.5.4

in the event of a termination of this Deed pursuant to clause 8.3.3, which does not constitute a Refund Event, then:

(a)

(b)

if Buyer’s Financing Commitment remains in effect at the time of such termination or Buyer shall have failed to use its best endeavours to maintain such Financing Commitment following the date of this Deed or to obtain Alternative Financing, then Buyer’s Liability shall be the Buyer Termination Fee of which (A) the Deposit Amount shall be deemed paid through retention of the Deposit Amount by Oldford, and (B) the Additional Fee shall be paid by Buyer to Oldford no later than 30 days following such termination;

8.5.5

in the event of a termination of this Deed pursuant to clause 8.4; provided, that Buyer’s Liability therefor shall be as follows:

(a)

(b)

if Buyer’s Financing Commitment remains in effect at the time of such termination or Buyer shall have failed to use its best endeavours to maintain such Financing Commitment following the date of this Deed or to obtain Alternative Financing, then Buyer’s Liability shall be the Buyer Termination Fee, of which (A) the Deposit Amount shall be deemed paid through retention of the Deposit Amount by Oldford, and (B) the Additional Fee shall be paid by Buyer to Oldford no later than 30 days following such termination; and

8.5.6

the provisions contained in this clause 8.5 and in clauses 1, 8.6, 10.1.3, 10.1.4, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21.5 and 22 shall survive indefinitely.

8.6	Buyer Deposit

In the event that this Deed is terminated and the Contemplated Transactions are abandoned pursuant to clauses 8.2, 8.3 or 8.4, the Deposit Amount shall be retained by Oldford, except that the Deposit Amount shall be refunded to Buyer, and the Sellers’ Representative shall

cause such amount to be paid to the Buyer by wire transfer of immediately available funds no later than three Business Days following the termination of this Deed, in the event that this Deed is terminated following the occurrence of any of the following events (each, a “Refund Event”):

8.6.1

if any party terminates this Deed pursuant to clause 8.2 and Completion shall not have occurred by the Long Stop Termination Effective Date as a result of the Condition set out in Schedule 3, part 1, clause 1.1 not being satisfied in full (or waived by Buyer and Sellers’ Representative), except where the Relevant Authority contemplated therein seeks only money damages and does not seek an injunction or other equitable relief (or any other Action that would reasonably be expected to have the effect of materially prejudicing the goodwill or reputation of Buyer, the Business or the Oldford Group Companies) and (a) the money damages being sought are equal to or less than the Refund Threshold, or (b) such money damages are in excess of the Refund Threshold but the Action relating to such money damages shall have been Definitively Resolved prior to the Long Stop Termination Effective Date without additional cost or Liability to Buyer;

8.6.2

[Reserved]

8.6.3

if any party terminates this Deed pursuant to clause 8.2 and Completion shall not have occurred by the Long Stop Termination Effective Date as a result of the Condition set out in Schedule 3, part 1, clause 1.3 not being satisfied in full (or waived by Buyer and Sellers’ Representative), except where (a) such Condition was not satisfied due to a failure to obtain the approval of Buyer Parent’s shareholders or the TSX, or (b) the Consent contemplated therein is a Gaming Approval for a change of control in respect of an Oldford Group Company from any of the Gaming Authorities listed on Exhibit 3.1.3(1) (a “Relevant Gaming Authority”), and the failure to have satisfied such Condition arose directly from the following:

(i)

any wrongful or negligent act or omission of Buyer or any of its Representatives (including a failure to provide sufficient information to any such Relevant Gaming Authority or otherwise failing to cooperate with any reasonable action required for the purpose of obtaining such Gaming Approval); or

(ii)

a Relevant Gaming Authority finding that Buyer or any of its Representatives (or any other key individuals of the Buyer or its Representatives) who are required to obtain licensure or whose suitability will be reviewed in connection with the issuance of such Permit are unsuitable to possess a Permit to operate the Business in such jurisdiction;

8.6.4

if any party terminates this Deed pursuant to clause 8.2 and Completion shall not have occurred by the Long Stop Termination Effective Date as a direct result of the Condition set out in Schedule 3, part 1, clause 1.4 not being satisfied in full (or waived by Buyer and Sellers’ Representative);

8.6.5

if Buyer terminates this Deed pursuant to clause 8.3.1;

8.6.6

if Buyer terminates this Deed pursuant to clause 8.3.2 (a “Bring-Down Failure”) and the following shall have occurred:

(a)

the Bring-Down Failure was caused by the occurrence of a Post-Signing Event arising from (i) an act, omission or transaction of the Sellers’ Representative, Oldford or any Seller, or (ii) the fraud, dishonesty, wilful concealment, intentional misrepresentation or wilful misconduct of the Sellers’ Representative, Oldford or any Seller; and

(b)

the Post-Signing Event that gave rise to the Bring-Down Failure has a material adverse impact on the Oldford Group Companies or the Contemplated Transactions; for purposes of determining whether a “material adverse impact” shall have occurred, the parties agree that the following non-exclusive factors shall be taken into consideration: (i) the impact on the reputation of Buyer or any Oldford Group Company, (ii) the financial impact of such Post-Signing Event on Buyer, the Buyer Parent, the Oldford Group Companies or the Contemplated Transactions, (iii) the impact on the ability of Buyer or any Oldford Group Company to conduct its business, (iv) the impact on the Financing Commitment (including whether the Financing Sources terminate the Financing Commitment); provided, that the parties acknowledge that such termination of the Financing Commitment shall not, in and of itself, result in a material adverse impact but, rather, the cause of such termination shall be a factor in determining whether a material adverse impact has occurred, and (v) in considering whether a material adverse impact has occurred, the parties agree that the adverse impact must not be immaterial, but also need not rise to the level of a Material Adverse Effect (the foregoing standard is hereinafter referred to as a “material adverse impact” and shall apply mutatis mutandis in the event of a breach of a Warranty or a covenant under this Deed);

8.6.7

if Buyer terminates this Deed pursuant to clause 8.3.3:

(a)

at any time during the 150-day period following the date of this Deed; or

(b)

at any time following such 150-day period, if the breached covenant that gave rise to a failure to satisfy the Condition set forth in Schedule 3, part 2, clause 2.2 is (i) a Fundamental Covenant or (ii) if not a Fundamental Covenant, such breached covenant has a material adverse impact (as defined in clause 8.6.6(b)) on the Oldford Group Companies or the Contemplated Transactions;

8.6.8

if Buyer terminates this Deed pursuant to clause 8.3.4; or

8.6.9

if, notwithstanding any other provision of this Deed to the contrary, the Sellers’ Representative or Buyer terminates this Deed pursuant to clause 8.2 and the failure to satisfy any Condition referenced in such clause 8.2 resulted from the fraud or intentional misrepresentation of the Sellers’ Representative, Oldford or any Seller or as a result of any such person’s wilful failure to cooperate with Buyer in connection with arrangements by Buyer to obtain the Financing.

8.7	Certain acknowledgments

8.7.1

Buyer and the Sellers acknowledge and agree that the agreements contained in this clause 8 are an integral part of the Contemplated Transactions, and that, without these agreements, none of Buyer, Oldford or the Sellers would have entered into this Deed. The parties further acknowledge that:

(a)

the damages resulting from termination of this Deed under circumstances in which either (i) Oldford is entitled to retain the Deposit Amount or (ii) Oldford is entitled to retain the Deposit Amount and Buyer is required to pay the Additional Fee are uncertain and incapable of accurate calculation but both parties confirm and agree that the Buyer Termination Fee payable pursuant to this clause 8 represents a reasonable forecast of the actual damages that may be incurred; and

(b)

in the event that the Sellers shall receive full payment of the Buyer Termination Fee pursuant to this clause 8:

(i)

the receipt of the Buyer Termination Fee shall be deemed to be liquidated damages, and not a penalty, for any and all Losses suffered or incurred by the Sellers, Oldford, any of their respective Affiliates or any other person in connection with this Deed (and the termination hereof), the Contemplated Transactions (and the abandonment thereof) or any matter forming the basis for such termination; and

(ii)

the payment of the Buyer Termination Fee shall be the sole remedy for the Sellers, Oldford, any of their respective Affiliates or any other person, and none of such parties shall be entitled to bring or maintain any Action against Buyer or any of its Affiliates (together, “Buyer Parties”) or any Financing Sources for damages or any equitable relief arising out of or in connection with this Deed, any of the Contemplated Transactions or any matters forming the basis for such termination;

provided, however, that the foregoing clauses 8.7.1(a), (b) and (c) (in the case of a Buyer Party only) shall not apply in the event of (A) a Liquidated Damages Exception under clause 8.7.2, (B) any breach of the Non-Disclosure Agreement, (C) any breach of clause 10.1.4, or (D) fraud or wilful misconduct of Buyer or any of its Affiliates.

8.7.2

Notwithstanding any other provision of this clause 8 to the contrary, if Buyer shall fail to pay any portion of the Additional Fee when due (a “Liquidated Damages Exception”), then Sellers shall have the right to retain the Deposit Amount and pursue all other claims against Buyer (subject to clause 19.3.3), including damages in excess of the Additional Fee.

8.7.3

The parties agree that if Completion does not take place on the Completion Date because Oldford or any Seller or Buyer or Buyer Parent fails to comply with any of its obligations under clause 6 or Schedule 5 (whether such failure by such party amounts to a repudiatory breach or not), Buyer (in case of a failure by Oldford or any Seller) or the Sellers’ Representative (in case of a failure by Buyer or Buyer Parent) may, by written notice to the Sellers’ Representative or Buyer, as applicable, in addition to and without limiting any other right or remedy of Buyer, Oldford or Sellers, as the case may be, under this Deed, elect to terminate this Deed pursuant to clause 8.3.3, in the case of Buyer, or clause 8.4, in the case of Sellers’ Representative, with immediate effect (without the application of any cure period).

9.	INDEMNIFICATION

9.1	Indemnification by Participating Equityholders for Participating Equityholder-specific breaches

Subject to the limitations set forth in this clause 9, from and after Completion, each of the Participating Equityholders, with respect to such Participating Equityholder, on a several and not joint basis, will indemnify and hold harmless Buyer and each of their respective Affiliates (including, following the Effective Time, each Oldford Group Company), and the Representatives and Affiliates of each of the foregoing persons (each, a “Buyer Indemnified Person”), from, against and in respect of any and all Losses, whether or not involving a Third Party Claim, incurred or suffered by any Buyer Indemnified Person, arising out of or as a result of:

9.1.1

any breach of, or inaccuracy in, any Warranty made by such Participating Equityholder: (i) in Schedule 6, part 2, if such Participating Equityholder is a Warranting Seller, and (ii) in such Participating Equityholder’s Letter of Transmittal; or

9.1.2

any breach, default or violation of any covenant or agreement of such Participating Equityholder (including under this clause 9 and clause 10, but excluding any breach, default or violation of any covenant or agreement indemnifiable pursuant to clause 9.2.2(b)) to the extent required to be performed or complied with by such Participating Equityholder pursuant to this Deed, such Participating Equityholder’s Letter of Transmittal or any other Transaction Document, as applicable.

9.2	Indemnification by Participating Equityholders for other breaches and Dissenting Shares

Subject to the limitations set forth in this clause 9, from and after Completion, the Participating Equityholders, on a several and not joint basis (pro-rata to each Participating Equityholder’s Transaction Percentage), will indemnify and hold harmless each Buyer Indemnified Person from, against and in respect of any and all Losses, whether or not involving a Third Party Claim, incurred or suffered by such Buyer Indemnified Person arising out of or as a result of:

9.2.1

any breach of, or inaccuracy in, any Warranty made by Oldford or the Warranting Sellers in Schedule 6, part 1;

9.2.2

(a) any breach, default or violation of any covenant or agreement of the Sellers’ Representative, Oldford or the other Oldford Group Companies (including under this clause 9) to the extent required to be performed or complied with by the Sellers’ Representative or such Oldford Group Company pursuant to this Deed or any other Transaction Document, but only to the extent required to be performed or complied with by the Sellers’ Representative or such Oldford Group Company at or prior to Completion, and (b) any breach, default or violation of any covenant or agreement of the Warranting Sellers set out in this Deed (including in Schedule 4) to the extent required to be performed or complied with by the Warranting Sellers pursuant to this Deed; or

9.2.3

any Dissenting Shares, but only in respect of Losses incurred by the Buyer Indemnified Persons arising out of or relating to the Dissenting Shares or any appraisal process or appraisal proceedings related thereto which exceed the portion of the Merger Consideration that would have otherwise been payable in respect of the Dissenting Shares in accordance with this Deed had such Shares not been Dissenting Shares.

9.3	Limitations

The Participating Equityholders will not be obligated to pay for any Losses pursuant to clause 9.1.1, clause 9.2.1 or clause 9.2.2 (but only with respect to Excluded Covenants) until the aggregate amount of all such Losses exceeds $31,500,000 (the “Deductible”), following which the Buyer Indemnified Persons will be entitled to be indemnified by the Participating Equityholders (subject to Clause 9.3.2) in respect of all such Losses in excess of the Deductible up to a maximum aggregate amount of such excess Losses equal to $315,000,000 (the “Liability Cap”). Notwithstanding the foregoing, no Loss may be claimed by any Buyer Indemnified Person, nor shall it be reimbursable by or be included in calculating the aggregate Losses for purposes of calculating whether the Deductible has been reached or whether the Liability Cap has been met, other than such Losses in excess of $250,000 resulting from any single claim or aggregated claims arising out of the same facts, events or circumstances (the “Mini-Basket”).

9.3.1

Notwithstanding anything to the contrary contained herein, none of the Mini-Basket, Deductible or the Liability Cap shall apply with respect to:

(a)

any Losses incurred or suffered by Buyer Indemnified Persons as a result of fraud, intentional misrepresentation or wilful misconduct by any Oldford Group Company (at or prior to Completion), Seller or the Sellers’ Representative;

(b)

any Losses incurred or suffered by Buyer Indemnified Persons as a result of any breach of the Fundamental Warranties;

(c)

Participating Equityholders’ indemnification obligations pursuant to clauses 9.1.2, 9.2.2 (other than the Excluded Covenants, which shall be subject to the Mini-Basket, Deductible and the Liability Cap), or clause 9.2.3; or

(d)

any Tax Losses, for which the Buyer Indemnified Persons will be entitled to be indemnified by the Participating Equityholders (subject to Clause 9.3.2) up to a maximum aggregate amount of Losses equal to $100,000,000 in excess of the Liability Cap.

Notwithstanding anything to the contrary contained herein, subject to clauses 3.4.2 and 3.4.3, the liability of any Participating Equityholder, other than the Warranting Sellers, shall be limited to such Participating Equityholder’s pro-rata portion of the Indemnity Escrow Amount (in accordance with such Participating Equityholder’s Transaction Percentage), except in the event of (i) a breach by such Participating Equityholder of any of his/her/its warranties included in the Letter of Transmittal, (ii) a breach by such Participating Equityholder of such Participating Equityholder’s personal covenants, or (iii) fraud, dishonesty, wilful concealment, intentional misrepresentation or wilful misconduct by such Participating Equityholder.

9.3.2

Certain Other Limitations:

(a)

except for those obligations set forth in clause 9.3.1 which are not subject to the Mini-Basket, Deductible or the Liability Cap, the aggregate liability of each Participating Equityholder to indemnify the Buyer Indemnified Persons for Losses under clause 9.1 and clause 9.2 shall in no event exceed the Transaction Percentage of such Seller multiplied by the Liability Cap, except that in respect of Tax Losses, such aggregate liability shall in no event exceed the Transaction Percentage of such Seller multiplied by the sum of the Liability Cap plus $100,000,000;

(b)

for the elimination of doubt, with respect to any indemnification claim made against any Participating Equityholder pursuant to this clause 9, that portion of the Indemnity Escrow Amount available to the Buyer Indemnified Persons shall be limited to such Participating Equityholder’s pro-rata portion of the Indemnity Escrow Amount (in accordance with such Participating Equityholder’s Transaction Percentage); and

(c)

if Buyer waives any of: (i) the Condition set out in Schedule 3, part 2, clause 2.1 following Sellers’ Representative’s delivery to Buyer of a written notice that sets forth in reasonable detail each Warranty that is not true and correct in all respects, or true and correct in all material respects, as applicable, and the reasons therefor; (ii) the Condition set out in Schedule 3, part 2, clause 2.2 following Sellers’ Representative’s delivery to Buyer of a written notice that sets forth in reasonable detail each covenant that has not been performed or complied with in all material respects; or (iii) the Condition set out in Schedule 3, part 2, clause 2.3, then the Buyer Indemnified Persons shall not be entitled to seek any indemnification for the Loss which would have otherwise been indemnifiable under this clause 9, absent such written waiver (each, a “Waived Event”); provided, however, with respect to (i) or (ii) above, that if:

(i)

Completion occurs during the 150-day period following the date of this Deed (but not after the expiration of such period), and

(ii)

the Waived Event was caused by (i) an act or omission by the Sellers’ Representative, Oldford or any Seller, or (ii) the fraud, dishonesty, wilful concealment, intentional misrepresentation or wilful misconduct by the Sellers’ Representative, Oldford or any Seller,

then, any Losses incurred or suffered by any Buyer Indemnified Person as result of any Waived Event will reduce the Deductible but not below zero, and any Losses incurred or suffered by any such Buyer Indemnified Person as a result of such Waived Event in excess of the Deductible shall not be indemnifiable under this clause 9.

9.4	Indemnity by Buyer

Subject to the limitations set forth in this clause 9, from and after Completion, Buyer will indemnify and hold harmless Sellers and their Affiliates, other Participating Equityholders and the Representatives and Affiliates of each of the foregoing persons (each, a “Seller Indemnified Person”), from, against and in respect of any and all Losses, whether or not involving a Third Party Claim, incurred or suffered by any Seller Indemnified Person, arising out of or as a result of:

9.4.1

any breach of, or inaccuracy in, any Warranty made by Buyer in Schedule 6, part 3 or Merger Sub in Schedule 6, part 4; or

9.4.2

any breach, default or violation of any covenant or agreement of Buyer or Merger Sub (including under this clause 9) to the extent required to be performed or complied with by Buyer or Merger Sub in or pursuant to this Deed or any other Transaction Document.

9.5	Time for claims

No claim may be made or suit instituted seeking indemnification pursuant to clause 9.1, clause 9.2 or clause 9.4 for any Loss unless a written notice (a “Notice of Claim”) describing such breach or inaccuracy with respect to any Warranty or covenant, in reasonable detail in light of the circumstances then known to the Seller Indemnified Person or Buyer Indemnified Person making such claim (as the case may be, the “Indemnified Person”), is provided to the person against whom indemnification is being sought pursuant to clause 9.1 clause 9.2 or clause 9.4 (as the case may be, the “Indemnifying Person”):

9.5.1

at any time, in the case of any breach of, or inaccuracy in, any Fundamental Warranty or in any warranty contained in the Letters of Transmittal;

9.5.2

at any time prior to the Release Date in the case of any breach of, or inaccuracy in any Warranty (other than a Fundamental Warranty);

9.5.3

at any time prior to the Release Date in the case of any breach, default or violation of the Tax Covenant;

9.5.4

at any time prior to the Release Date in the case of any breach, default or violation of any covenant set forth in Schedule 4, other than any Fundamental Covenant set forth therein; and

9.5.5

at any time, in the case of any claim or suit based upon fraud, intentional misrepresentation or wilful misconduct;

provided that:

(a)

if, at any time prior to the expiration of the applicable survival period set forth in this clause 9.5, any Indemnified Person delivers to any Indemnifying Person a Notice of Claim asserting a claim for Losses pursuant to clause 9.1, clause 9.2 or clause 9.4, then the claim set out in such Notice of Claim shall survive until such time as such claim is finally resolved in accordance with this Deed; and

(b)

claims for indemnification pursuant to any other provision of clause 9.1, clause 9.2 or clause 9.4 which are not expressed to be subject to the limitations set out in this clause 9.5, including each of the covenants and agreements of the parties set forth in this Deed which are required to be performed and satisfied after the Completion Date, shall survive in accordance with their terms.

9.6	Third Party Claims

9.6.1

Notice of Claim. If any third party notifies an Indemnified Person with respect to any matter (a “Third Party Claim”) which may give rise to an indemnified claim against an Indemnifying Person under this clause 9, then the Indemnified Person will promptly give written notice to the Indemnifying Person; provided, however, that no delay on the part of the Indemnified Person in notifying the Indemnifying Person will relieve the Indemnifying Person from any obligation under this clause 9, except to the extent that the Indemnifying Person is actually prejudiced by the Indemnified Person’s failure to give such notice in a timely manner.

9.6.2

Assumption of Defence, etc. The Indemnifying Person will be entitled at such Indemnifying Person’s sole cost and expense to participate in the defence of any Third Party Claim. In addition, the Indemnifying Person will have the right to assume the defence of the Indemnified Person against the

Third Party Claim with counsel reasonably satisfactory to the Indemnified Person so long as: (a) the Indemnifying Person has given written notice to the Indemnified Person within 20 days after the Indemnified Person has given notice of the Third Party Claim that the Indemnifying Person will indemnify the Indemnified Person from and against all Losses the Indemnified Person may suffer resulting from, arising out of, relating to, or caused by the Third Party Claim; (b) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Person and would not reasonably be expected to have the effect of materially prejudicing the goodwill or reputation of the Business or the Oldford Group Companies; (c) the Indemnified Person has not been advised in writing by counsel (reasonably satisfactory to the Indemnifying Person) that an actual or potential conflict exists between the Indemnified Person and the Indemnifying Person in connection with the defence of the Third Party Claim; (d) the Third Party Claim does not relate to or otherwise arise in connection with any criminal or regulatory enforcement Action; and (e) the Indemnifying Person conducts the defence of the Third Party Claim in a reasonable and diligent manner. The Indemnified Person may retain separate co-counsel at its sole cost and expense and participate in the defence of the Third Party Claim; provided, however, that the Indemnifying Person will pay all the fees and expenses of separate co-counsel retained by the Indemnified Person that are incurred prior to the Indemnifying Person’s assumption of control of the defence of the Third Party Claim.

9.6.3

Limitations on Indemnifying Person. Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, conditioned or delayed, the Indemnifying Person will not consent to the entry of any judgment or enter into any compromise or settlement with respect to any Third Party Claim unless such judgment, compromise or settlement: (a) provides for the payment by the Indemnifying Person of money as sole relief for the claimant; (b) results in the full and general release of all Buyer Indemnified Persons or Seller Indemnified Persons, as applicable, from all Liabilities arising or relating to, or in connection with, the Third Party Claim; (c) involves no finding or admission of any violation of any Legal Requirements; and (d) does not harm, in any material respect, the goodwill or reputation of, such Indemnified Person or the Business of the Oldford Group Companies.

9.6.4

Indemnified Person’s Control. If the Indemnifying Person does not deliver the notice contemplated by clause (a) of clause 9.6.2 within 20 days after the Indemnified Person has given notice of a Third Party Claim, or otherwise at any time fails to conduct the defence of the Third Party Claim in a reasonable and diligent manner, the Indemnified Person may assume the defence, and, if it receives the prior written consent of the Indemnifying Person, which consent shall not be unreasonably withheld, conditioned or delayed, the Indemnified Person may consent to the entry of any judgment or enter into any compromise or settlement with respect to such Third Party Claim. If such notice is given on a timely basis and the Indemnifying Person conducts the defence of the Third Party Claim in a reasonable and diligent manner but any other condition in clause 9.6.2 is not satisfied or becomes unsatisfied, then the Indemnified Person may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim with the consent of the Indemnifying Person, which consent shall not be unreasonably delayed, conditioned or withheld. In the event that the Indemnified Person conducts the defence of the Third Party Claim pursuant to this clause 9.6.4, the Indemnifying Person will remain responsible for any and all other Losses that the Indemnified Person may incur or suffer resulting from, arising out of, relating to, in the nature of or caused by the Third Party Claim to the fullest extent provided in this clause 9 (but subject always to the limitations set out in this clause 9).

9.6.5

Reasonable Cooperation. The party or parties not in control of the prosecution or defence of a Third Party Claim will reasonably cooperate with the other party or parties in the conduct of the prosecution or defence of such Third Party Claim, including providing the party or parties in control of the prosecution or defence of such Third Party Claim with all documents and information reasonably requested by such party.

9.7	No right of setoff

For the elimination of doubt, without the prior written consent of the Sellers’ Representative, Buyer shall not have a right to set off any amount to which it may be entitled from any of the Participating Equityholders against amounts otherwise payable by the Buyer to (or for the benefit of) any of the Participating Equityholders (including the Deferred Payment Amount or any amount payable pursuant to the Merger Consideration Adjustments).

9.8	Indemnification procedure

Claims for indemnification by any Buyer Indemnified Person pursuant to this clause 9 shall be made in accordance with the following procedures:

9.8.1

If any Buyer Indemnified Person determines in good faith that it is entitled to indemnification for Losses pursuant to this clause 9, Buyer shall give to the Sellers’ Representative (with a copy to the Escrow Agent (if prior to the Release Date)) a Notice of Claim setting forth in reasonable detail the basis for such claim, and specifying the amount of Losses claimed (which, if not finally determined, may be a good faith estimate thereof) (the amount of Losses so claimed being hereinafter referred to as the “Indemnity Claim Amount”).

9.8.2

The Sellers’ Representative shall have 30 days to respond to such Notice of Claim, and, as applicable, accept or object to such Notice of Claim or the Indemnity Claim Amount set out therein by delivering to the Buyer (and the Escrow Agent if prior to the Release Date) a written notice either accepting the Notice of Claim (an “Acceptance Notice”) or disputing the Notice of Claim (a “Dispute Notice”), which Dispute Notice shall contain, in reasonable detail, an explanation of the basis on which the Sellers’ Representative disputes the applicable Notice of Claim, including, the portion of the Indemnity Claim Amount to which the Sellers’ Representative objects. If the Sellers’ Representative does not deliver an Acceptance Notice or a Dispute Notice to Buyer (and the Escrow Agent if prior to the Release Date) with respect to a Notice of Claim within such 30-day period, then such Notice of Claim shall be deemed to have been accepted in full by the Sellers’ Representative, with the same effect as if the Sellers’ Representative had timely delivered an Acceptance Notice, and, if prior to the Release Date, Buyer shall be entitled to the release of the funds in respect of the amount of Losses claimed in such Notice of Claim from the Indemnity Escrow Account in accordance with the procedures set forth in the Indemnity Escrow Agreement; provided that, if any such Losses are Tax Losses, then, to the extent that the Initial Tax Indemnity Threshold shall not then have been exceeded, funds in respect of the amount of such Tax Losses claimed in such Notice of Claim shall be paid to Buyer by the Sellers’ Representative on behalf of the Sellers and, to the extent that such Tax Losses shall have caused the Initial Tax Indemnity Threshold to be exceeded, then funds in respect of such excess Tax Losses shall be

released to Buyer from the Indemnity Escrow Account in accordance with the procedures set forth in the Indemnity Escrow Agreement. If the Sellers’ Representative delivers a Dispute Notice to Buyer (and the Escrow Agent if prior to the Release Date) within such 30-day period, then the Escrow Agent will not be authorised to disburse any funds in respect of the applicable Indemnity Claim Amount unless it has received either (a) a joint release directing the Escrow Agent to deliver such funds (including by setting forth instructions as to payment), which joint release Buyer and the Sellers’ Representative agree to deliver to the Escrow Agent promptly following resolution of such Notice of Claim, or (b) an Arbitration Award, directing the Escrow Agent to disburse to such Buyer Indemnified Person such amount as set forth in such Arbitration Award.

9.8.3

If Sellers’ Representative timely delivers a Dispute Notice as set out in clause 9.8.2, then Buyer and Sellers’ Representative shall reasonably cooperate to resolve the matters set forth in such Dispute Notice as promptly as reasonably possible.

9.8.4

If any Buyer Indemnified Person is entitled to payment for any Losses pursuant to this clause 9, then such amount will first be satisfied from the Indemnity Escrow Account (except as set out in clause 9.8.2 with respect to Tax Losses in respect of the Initial Tax Indemnity Threshold) in accordance with the terms of this Deed and the Indemnity Escrow Agreement. If any Buyer Indemnified Person is entitled to payment for any Losses pursuant to this clause 9 in excess of the funds available in the Indemnity Escrow Account, then, subject to 3.4.3, such excess will be paid promptly after becoming due and payable in accordance with clause 3.4.4 by the relevant Participating Equityholders. Notwithstanding the first sentence of this clause 9.8.4, any Buyer Indemnified Person entitled to payment for any Losses in the case of fraud, wilful misconduct, intentional misrepresentation, or any breach of, or inaccuracy in, any Fundamental Warranty, or any breach, default or violation of any covenant or agreement of a Warranting Seller, an Oldford Group Company or the Sellers’ Representative (other than an Excluded Covenant) may elect to recover from the Warranting Sellers directly, without first pursuing any amounts contained in the Indemnity Escrow Account, and each Warranting Seller agrees that, in the case of any such election, such Warranting Seller shall, subject to the provisions of this clause 9, clause 3.4.2 and 3.4.3, pay Buyer the full amount of such Losses for which such Warranting Seller is liable, irrespective of whether any amounts remain available in the Indemnity Escrow Account. The foregoing shall not apply in the event of fraud, wilful misconduct or intentional misrepresentation by a specific Seller or a breach by such Seller of any of his/her/its specific warranties, as set out in such Seller’s Letter of Transmittal, or of a specific covenant by which such Seller is bound, in which case, such breaching Seller shall be liable to pay such Losses directly to the Buyer.

9.9	Exclusive remedy

From and after Completion, and except with respect to claims arising from breaches of the Fundamental Warranties, warranties contained in the Letters of Transmittal, fraud, intentional misrepresentation or wilful misconduct (or claims for equitable relief specifically provided for in this Deed), the provisions of this clause 9, clause 19 and Schedule 7 shall constitute the sole and exclusive remedy of the Indemnified Persons with respect to any Losses incurred by such Indemnified Persons in connection with this Deed.

9.10	Knowledge and investigation

The right of any Indemnified Person to indemnification pursuant to this clause 9 will not be affected by any investigation conducted or knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Deed or Completion, with respect to the accuracy or inaccuracy of any Warranty or performance of or compliance with any covenant or agreement referred to in clause 9.1, clause 9.2 or clause 9.4; provided, that Buyer represents and warrants that, to the Knowledge of Buyer, as of the date of this Deed, no breach of or inaccuracy exists with respect to any Warranty, covenant or agreement of Oldford or the Warranting Sellers; provided, however, that Buyer makes no such warranty with respect to the Fundamental Warranties or any warranty contained in the Letters of Transmittal.

9.11	Remedies cumulative

Subject to clause 9.9 and clause 9.14, the rights of each Buyer Indemnified Person and Seller Indemnified Person under this clause 9 are cumulative, and each Buyer Indemnified Person and Seller Indemnified Person, as the case may be, will have the right in any particular circumstance, in its sole discretion, to enforce any provision of this clause 9 without regard to the availability of a remedy under any other provision of this clause 9.

9.12	Time of payment of claims

Except as otherwise set forth in this clause 9, any amount owing by any person pursuant to this clause 9 shall be paid within five Business Days after final determination of such amount, in accordance with this Deed or as provided for in the Indemnity Escrow Agreement. For the elimination of doubt, if a claim for any Loss under this clause 9 is based upon a Liability which is contingent, no Indemnifying Person shall be liable to make any payment to any Indemnified Person in respect of such Loss unless and until such contingent Liability gives rise to an obligation to make a payment (but an Indemnified Person shall have the right to give notice of that claim pursuant to this clause 9 before such time).

9.13	Mitigation; insurance reimbursement

Each Indemnified Person shall use its commercially reasonable endeavours to mitigate any Losses after becoming aware of any event which would reasonably be expected to give rise to any Losses that are indemnifiable hereunder. The amount of any Losses for which indemnification is provided under this clause 9 shall be reduced by: (a) the insurance proceeds actually received with respect to any such Losses and (b) any other amount, if any, actually recovered from third parties (as a result of indemnification, contribution, Guarantee or otherwise) by the Indemnified Person (or its Affiliates) with respect to any Losses less, in the case of each of the immediately preceding clauses (a) and (b), all reasonable costs (including attorneys’ fees) of the Indemnified Person to collect such proceeds and any likely or foreseeable increase in insurance premiums resulting from such recovery (each source named in clauses (a) and (b) of this clause 9.13, a “Collateral Source”); provided that such Indemnified Person shall nevertheless be entitled to bring a claim for indemnification under this clause 9 in respect of such Losses. If an Indemnified Person has received the payment required under this clause 9 from the applicable Indemnifying Person in respect of any Losses and later receives proceeds from a Collateral Source in respect of the same Losses, then such Indemnified Person shall hold such proceeds in trust for the benefit of the Indemnifying Person and shall pay to the Indemnifying Person, within 30 days after receipt, an amount equal to the excess of (i) the amount previously received by the Indemnified Person under this clause 9, plus the amount of proceeds actually received by such Indemnified Person from such Collateral Source (less all collection costs and any increase in insurance or other premiums arising therefrom or related thereto), over (ii) the amount of Losses with respect to

such claim which the Indemnified Person has become entitled to receive under this clause 9 (for the avoidance of doubt, if such payment is made to the Participating Equityholders, it will be made in accordance with each Participating Equityholder’s Transaction Percentage).

9.14	No multiple recovery

No Indemnified Person shall be entitled to recover from an Indemnifying Person more than once for any particular Loss, nor shall any Indemnifying Person be liable or otherwise obligated to indemnify any or all Indemnified Persons for the same Loss more than once (i.e., no double counting). For the elimination of doubt, no indemnification claims may be made under this clause 9 to the extent the Loss incurred is (a) paid for in the Merger Consideration Adjustments or (b) is explicitly and specifically reserved in the Accounts.

9.15	Subrogation

After any Indemnifying Person makes payment in full to an Indemnified Person in respect of a claim pursuant to this clause 9, such Indemnifying Person shall, only to the extent of such payment, be subrogated to all rights (if any) of the Indemnified Person against any third party (other than the Indemnified Person’s financing sources (including the Financing Sources)) in connection with the Losses to which such claim relates. Without limiting the generality of the preceding sentence, the Indemnified Person, upon receiving an indemnification payment pursuant to the preceding sentence shall, upon the written request of the Indemnifying Person, execute any instrument reasonably necessary to evidence such subrogation rights. The Indemnifying Person shall notify the Indemnified Person in writing in advance prior to making any claim against each such third party based on this subrogation provision.

9.16	Oldford’s indemnification obligations

9.16.1

Except as set forth in clause 10.4 or the indemnity letters attached as Exhibit L hereto, Participating Equityholders’ rights to seek indemnification, contribution or payment of any amount from any Oldford Group Company, whether or not arising in respect of (a) the Contemplated Transactions (including in respect of any indemnification obligations that Participating Equityholders are required to make to Buyer or any other Buyer Indemnified Person pursuant to a Transaction Document), (b) any Contractual Obligation that exists or may have existed between an Oldford Group Company and any such Participating Equityholder or (c) any other claim that a Participating Equityholder has or may have against an Oldford Group Company arising under any theory of Law or equity, shall terminate in all respects upon Completion. At Completion, each Seller does hereby release the Oldford Group Companies from any such claim that such Seller has or may have had against any such Oldford Group Company. Without limiting the generality of the foregoing, no Seller shall make any claim against any Oldford Group Company or any officer, employee, adviser, agent or other Representative thereof or thereto on whom it may have relied before agreeing to any terms of any Transaction Document or authorising any statement in the Disclosure Letter; provided, that no Seller shall be precluded from claiming against any other Seller under any right of contribution or indemnity to which such claiming Seller may be entitled.

9.16.2

If any Oldford Group Company suffers, incurs or otherwise becomes subject to any Losses as a result of or in connection with any inaccuracy in or breach of any Warranty, covenant or obligation of such Oldford Group Company or any Seller hereunder, then (without limiting any of the rights of any Oldford Group Company, Buyer or any other Buyer Indemnified Persons as Indemnified Persons) Buyer shall also be deemed, by virtue of its ownership, directly or indirectly, of the Equity Securities of such Oldford

Group Company, to have incurred Losses as a result of and in connection with such inaccuracy or breach but in any case the total amount both Buyer and such Oldford Group Company may recover shall not exceed the amount of Losses (and subject further to all other limitations set out in this clause 9).

9.16.3

At Completion, Oldford (on its behalf and on behalf of the Oldford Group Companies) does hereby irrevocably and unconditionally forever release the Sellers and the persons listed in Exhibit L from any claim that any Oldford Group Company has or may have had against any such Seller or person (in such Seller’s or person’s capacity as a shareholder or as a director, officer or employee of any Oldford Group Company), other than as expressly contemplated by this Deed and except with respect to derivative claims against any person who served as a director or officer of any Oldford Group Company in respect of any breach of a fiduciary duty owed by such person to such Oldford Group Company.

9.17	Merger Consideration Adjustment

Payments received by any person pursuant to this clause 9 shall be treated by the parties as an adjustment to the Merger Consideration for Tax purposes.

9.18	No Liability for post-Completion Taxes

For the elimination of doubt, the Participating Equityholders shall have no Liability for Taxes for any taxable period beginning after the Completion Date and the portion of any Straddle Period beginning after the Completion Date (as determined in accordance with clause 1.1(c) of the Tax Covenant).

9.19	Excluded Tax Events

Notwithstanding any provision of this Deed to the contrary, the Participating Equityholders shall not have any Liability hereunder whatsoever as a result of the occurrence of any Excluded Tax Event, regardless of whether such Excluded Tax Event: (a) caused a breach of a Warranty (including a Tax Warranty), a breach of covenant (including the Tax Covenant) or a breach of any other provision in this Deed, or (b) raises any obligation for indemnification or reimbursement pursuant to the terms of this Deed.

9.20	No Liability for Certain Cessations of Operations

For the elimination of doubt, the parties acknowledge that the cessation or prohibition of the operation of the Business or the elimination of any of the Oldford Group Companies’ ability to offer gaming products or services in any jurisdiction from which the Oldford Group Companies derived less than 5% of the gross gaming revenues of the Oldford Group Companies for the year ended December 31, 2013, shall not, in and of itself, constitute a breach of a Warranty, covenant or other obligation of Sellers or any Oldford Group Company under this Deed; and no Buyer Indemnified Person shall be entitled to seek indemnity under this clause 9 for a breach of any Warranty, covenant or other obligation of Sellers or any Oldford Group Company under this Deed related to such cessation, prohibition or elimination unless such breach resulted from the act, omission or transaction of any Seller or any Oldford Group Company.

10.	CERTAIN COVENANTS

10.1	Confidentiality

10.1.1

Each Warranting Seller acknowledges that the success of the Business and the Oldford Group Companies after Completion depends upon the continued preservation of the confidentiality of certain information possessed by such

Warranting Seller, that the preservation of the confidentiality of such information by such Warranting Seller is an essential premise of the bargain between such Warranting Seller and Buyer, and that Buyer would be unwilling to enter into this Deed in the absence of this clause 10.1. Accordingly, each Warranting Seller (severally and not jointly with the other Warranting Seller) hereby agrees with Buyer that such Warranting Seller and its Affiliates will not, and that such Warranting Seller will cause its Affiliates to not, at any time on or after the Completion Date, directly or indirectly, without the prior written consent of Buyer, disclose or use, any Confidential Information involving or relating to the Business or the Oldford Group Companies, including (a) customer, partners, contract parties and supplier information, including lists of names and addresses of customers, partners, contract parties and suppliers of the Oldford Group Companies; (b) business plans and strategies, compensation plans, compensation information, sales plans and strategies, pricing and other terms applicable to transactions between existing and prospective customers, suppliers or business associates; (c) market research and databases, sources of leads and methods of obtaining new business, and methods of purchasing, marketing, selling, performing and pricing products and services employed by any Oldford Group Company; (d) information concerning the Intellectual Property and Software including configuration and architecture, technical data, networks, methods, practices, standards and capacities of any Oldford Group Company’s information systems; (e) information identified as confidential and/or proprietary in internal documents of an Oldford Group Company; and (f) all information that would be a trade secret under any applicable Law; provided, however, that the information and/or disclosure subject to the foregoing provisions of this sentence will not include (i) disclosure that has been consented to in writing by the Buyer, (ii) any information generally available to, or known by, the public (other than as a result of disclosure in violation hereof), (iii) such disclosure that is required by an applicable Legal Requirement or Relevant Authority or the regulations of any stock exchange, if the receiving party gives the Buyer prompt notice thereof (to the extent legally permitted), discloses only that portion of the information that is legally required to be disclosed and takes no action to oppose efforts to seek confidential treatment of such information, (iv) such disclosure is required for such party to enforce this Deed or defend or preserve its rights hereunder or is reasonably required in connection with any litigation against or involving such party to enforce this Deed or defend or preserve its right hereunder, or (v) such disclosure that is required to obtain Tax or other clearances or consents from applicable Relevant Authorities, or such disclosure is necessary or required in connection with Tax filings; and provided, further, that the provisions of this clause 10.1.1 will not prohibit any retention of copies of records or disclosure (A) required by any applicable Legal Requirement so long as reasonable prior notice is given to Buyer of such retention and disclosure and a reasonable opportunity is afforded to Buyer to contest the same, (B) made in connection with the enforcement of any right or remedy relating to, or the performance of any obligation arising under, this Deed or the Contemplated Transactions, or (C) required in connection with any of the other exceptions for disclosure set out in sub-clauses (i)-(v) above.

10.1.2

The foregoing shall not restrict the ability of Oldford or any Warranting Seller to disclose information to their Representatives who need to know the information for purposes of the Contemplated Transactions or for any of the other purposes set out in clause 10.1.1, and who are advised of the

confidential and/or proprietary nature of such information and are bound by confidentiality obligations (which may be contained in such Representative’s engagement agreements or rules of professional conduct) that prohibit the further use and disclosure of the Confidential Information; provided, that each Warranting Seller shall remain responsible for any breach or violation of the provisions of clause 10.1 by such Representatives.

10.1.3

The provisions of the Non-Disclosure Agreement shall continue to be in full force and effect and shall apply to all information furnished by the Oldford Group Companies and the Sellers to Buyer and its Representatives until Completion (whereupon such provisions shall lapse); provided, however, that if this Deed is terminated by either party in accordance with clause 8, then the Non-Disclosure Agreement shall continue to be in full force and effect and shall apply to all information furnished by the Oldford Group Companies and the Sellers to Buyer and its Representatives prior to termination; provided, further, that disclosures during the Interim Period pursuant to, and in accordance with, the provisions of Schedule 4 shall be expressly permitted.

10.1.4

If this Deed is terminated by either party in accordance with clause 8, Buyer shall not, for the benefit of the Sellers and the Oldford Group Companies, either alone or in conjunction with or on behalf of any other person, and shall procure that no Affiliate of Buyer, at any time during the period of two years following the date of such termination, solicit or contact with a view to his or her engagement or employment by another person, an officer, employee or manager of any Oldford Group Company or a person who was an officer, employee or manager of any such Oldford Group Company at any time during the six months prior to the date of this Deed, whether or not such person would commit a breach of his or her employment contract by reason of leaving service. Notwithstanding the foregoing, in the event of such termination, Buyer shall be able to advertise job openings by use of newspapers, magazines, the Internet and other media, as well as engage recruitment agencies or companies not directed at the Oldford Group Companies or their individual employees, consultants or independent contractors.

10.2	Cooperation regarding financial statements

Until April 30, 2015, the Warranting Sellers shall, if they are reasonably asked to so do by Buyer, at the sole expense of Buyer (and only to the extent that the Oldford Group Companies and their personnel are not able to adequately do so without the assistance of the Warranting Sellers), use their reasonable endeavours to assist and cooperate with the endeavours of Buyer and its accountants and auditors to prepare and audit any financial statements (including pro forma financial statements) which relate to the Business and the period prior to Completion that Buyer will be required to prepare, file or furnish pursuant to any applicable securities laws or exchange requirements, including any rules or regulations of the Toronto Stock Exchange (“TSX”) or other stock exchange, or under any other applicable Laws.

10.3	Litigation support

If Buyer or any Oldford Group Company is (a) actively contesting or defending against any Action in connection with any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction, or (b) taking any action that Buyer or any Oldford Group Company reasonably deems necessary or appropriate under any Order entered against any Oldford Group Company (including the Oldford Stipulation), which, in each case of (a) or (b) above, exists or relates to an event that occurred on or prior

to the Completion Date involving an Oldford Group Company or the Business, then, at any time prior to the second anniversary of the Completion Date, the Warranting Sellers and their Affiliates will, at the cost and expense of Buyer (unless and to the extent Buyer is entitled to indemnification therefor hereunder, in which event such costs and expenses shall be borne by the Warranting Sellers), use reasonable endeavours to cooperate in such contest or defence (including by providing such testimony as may be reasonably necessary in connection with such contest or defence) and render such assistance as may be reasonably requested by Buyer to comply with any such Order, except that the Warranting Sellers shall not be required to do any of the foregoing in the event that such cooperation, testimony or other action shall conflict with their own Actions, investigations, proceedings or interests.

10.4	Directors’ and officers’ Liability

Buyer agrees that the indemnification obligations (including exculpation rights) set forth in the Organisational Documents of the Oldford Group Companies shall survive Completion and shall not be amended, repealed or otherwise modified for a period of at least seven years after Completion in any manner that would adversely affect the rights thereunder of any person who on or prior to Completion was a director or officer, and all such rights shall be observed by the Oldford Group Companies and Buyer. Without derogating from the foregoing, following Completion, Oldford shall (and the Buyer shall procure that Oldford shall) irrevocably and unconditionally indemnify and hold harmless each of the Warranting Sellers and the persons listed on Exhibit L for their actions or defaults prior to Completion (other than in connection with this Deed), in their capacity as employees, officers, directors or shareholders of the Oldford Group Companies, in accordance with the terms of the indemnity letters attached as Exhibit L hereto.

10.5	Use of Proceeds

[INTENTIONALLY DELETED].

10.6	Shareholders’ Meeting; Related Notices

10.6.1

As soon as reasonably practicable but in no event later than the 45^th day following the date of this Deed, Oldford shall hold a meeting of its shareholders for the purpose of seeking Oldford Shareholder Approval of this Deed, including the Scheme of Merger (the “Shareholders’ Meeting”). Oldford shall prepare and, not less than 14 days prior to the date of the Shareholders’ Meeting (unless a longer notice period is required by Oldford’s Organisational Documents), deliver to each Oldford shareholder of record on such mailing date a notice of the Shareholders’ Meeting, together with a copy of the Scheme of Merger, which notice shall comply in all respects with the requirements of the Companies Act, including Section 153(6)(c) thereof, and Oldford’s Organisational Documents (the “Shareholders’ Meeting Notice”). Oldford shall provide Buyer, Buyer Parent and their counsel a reasonable opportunity to review the Shareholders’ Meeting Notice before Oldford mails it to Oldford’s shareholders, and Oldford shall give reasonable and good faith consideration to all additions, deletions or changes suggested thereto by Buyer, Buyer Parent and their counsel.

10.6.2

Not less than 21 days prior to the filing of the Scheme of Merger with the Registrar (the “Merger Notice Period”), Oldford shall, in accordance with Section 154(2)(c) of the Companies Act, deliver a notice to each of its shareholders, which notice shall state that Oldford intends to participate in the Merger and stating that the Scheme of Merger may be inspected at such office of the registered agent of Oldford and Merger Sub at such reasonable times specified in such notice (the “Notice of Merger”) and publish such notice in two newspapers published in the Isle of Man. Oldford shall provide Buyer, Buyer Parent and their counsel a reasonable opportunity to review the Notice of Merger before Oldford mails it to

Oldford’s shareholders, and Oldford shall give reasonable and good faith consideration to all additions, deletions or changes suggested thereto by Buyer, Buyer Parent and their counsel.

10.7	Buyer Parent Shareholders’ Meeting

As soon as reasonably practicable but in no event later than the 45th day following the date of this Deed, Buyer Parent shall hold a meeting of its shareholders for the purpose of seeking the requisite approval of its shareholders required for Buyer Parent to consummate the Contemplated Transactions.

11.	RESTRICTIONS ON WARRANTING SELLERS’ BUSINESS ACTIVITIES

11.1	Warranting Sellers’ undertakings

Each Warranting Seller covenants with Buyer, for the benefit of Buyer and each Oldford Group Company, that it shall not, either alone or in conjunction with or on behalf of any other person, and shall procure that no Affiliate of such Warranting Seller shall, do any of the following things:

11.1.1

neither pending Completion nor at any time during the period of three years following the Completion Date, directly or indirectly, carry on, be engaged, concerned or interested in or assist a Competing Business anywhere in the world;

11.1.2

neither pending Completion nor at any time during the period of three years following the Completion Date, do or say anything which purpose, intent or likely effect is to harm any Oldford Group Company’s goodwill or reputation (as subsisting at the date of this Deed), and otherwise not make any public disparaging or derogatory statements concerning Buyer, or which purpose or intent is to lead a person who has dealt with any Oldford Group Company at any time during the nine months prior to the date of this Deed to cease to deal with any such Oldford Group Company on substantially equivalent terms to those previously offered or at all;

11.1.3

neither pending Completion nor at any time during the period of two years following the Completion Date, solicit or contact with a view to his or her engagement or employment by another person, an officer, employee or manager of any Oldford Group Company or a person who was an officer, employee or manager of any such Oldford Group Company at any time during the six months prior to the date of this Deed, whether or not such person would commit a breach of his or her employment contract by reason of leaving service; or

11.1.4

assist any other person to do any of the foregoing things.

11.2	No holding out

No Warranting Seller shall, and each Warranting Seller shall procure that no Affiliate or beneficial owner of such Warranting Seller shall, at any time after Completion:

11.2.1

intentionally give the impression (or permit or authorise another person to give the impression) that it is connected with any Oldford Group Company following Completion or that it has any authority to act on behalf of any such Oldford Group Company;

11.2.2

in any way, whether directly or indirectly, be concerned or knowingly take part in the carrying on of any business which uses any of the names or words (alone, together or in conjunction with any other words or symbols)

used by any Oldford Group Company at any time during the five years before the Completion Date or any colourable or phonetic imitation thereof in any combination, manner or form or any other name which is so similar to a name by which any Oldford Group Company or a product or service supplied by any such Oldford Group Company is known, or has been known at any time during the five years before the Completion Date, in each case as to reasonably be capable of suggesting an association of any kind with any such Oldford Group Company or any such product or service; or

11.2.3

in any way, whether directly or indirectly, be concerned or take part in the carrying on of any business which uses any Company Intellectual Property or any trade or service mark, business or domain name, distinctive mark, style, design or logo which, as at the date of this Deed, is or had been owned by any Oldford Group Company or anything which is reasonably capable of confusion with such mark, name, design or logo.

11.3	Independent undertakings, etc.

11.3.1

The restrictions in clauses 11.1 and 11.2 operate as separate restrictions in relation to each Oldford Group Company.

11.3.2

The restrictions in clauses 11.1 and 11.2, taken separately and together, are not more onerous or extensive than is necessary to protect the value of the Shares and the ability of Buyer to sell, or procure the sale of, the Shares or Business (or any part thereof) of any Oldford Group Company, and are also fair and reasonable, having regard to all the circumstances, including the amount payable for the Shares.

11.3.3

In the event that a court or other competent authority holds that any of the restrictions in clauses 11.1 or 11.2 would be unenforceable unless some part of such clause was deleted or its scope were reduced (by being limited to a specific type of business, by its duration or geographic extent being reduced or in any other way), the restriction shall have effect, and shall be deemed always to have had effect, subject to such alterations as are necessary to prevent it from being unenforceable.

11.3.4

Each of the restrictions in clauses 11.1 or 11.2 is separate and entirely independent from the others so that it shall not be rendered unenforceable if (despite the foregoing) all or any of the other restrictions are unenforceable.

11.3.5

The Warranting Sellers have entered into the restrictions in this clause 11 having been separately legally advised.

11.4	Certain exclusions

Notwithstanding clause 11.1 and clause 11.2, none of the following activities shall constitute a violation of clause 11.1 or clause 11.2: (a) the advertisement of job openings by use of newspapers, magazines, the Internet and other media, as well as the engagement of recruitment agencies or companies not directed at Buyer, the Oldford Group Companies or any of their respective Affiliates or individual prospective employees, consultants or independent contractors; or (b) acquiring through open market purchases and owning, solely as a passive investment, 5% or less in the aggregate of the Equity Securities of any class of publicly traded securities of a person that is engaged in a Competing Business.

11.5	Buyer’s non-disparagement obligation

Buyer shall (and shall procure that the Oldford Group Companies shall) neither pending Completion nor at any time following the Completion Date, do or say anything which purpose, intent or likely effect is to harm the goodwill or reputation (as subsisting at the date of this

Deed) of any of the Sellers or the Oldford Group Company’s officers, directors and employees who are listed on Exhibit N (collectively, the “Non-disparaged Persons”), and otherwise not make any public disparaging or derogatory statements concerning any of the Non-disparaged Persons.

11.6	Application of the Third Parties Act

Each Oldford Group Company may enforce the provisions of clauses 11.1 to 11.4 subject to and in accordance with the provisions of the Third Parties Act. Each Non-disparaged Person may enforce the provisions of clause 11.5 subject to and in accordance with the provisions of the Third Parties Act.

11.7	Consideration

Buyer and Sellers confirm that no portion of the Merger Consideration is attributable to the non-competition and non-solicitation covenants set forth in clauses 11.1 and 11.2. Buyer and Sellers confirm that these restrictive covenants and agreements have been granted to maintain and preserve the fair market value of the Shares.

12.	ENTIRE AGREEMENT

12.1

The Transaction Documents together constitute the whole and only agreement between the parties in relation to the Contemplated Transactions and supersede any previous agreement whether written or oral between all or any of the parties in relation to that subject matter (including, the Oldford Letter of Intent signed among the Warranting Sellers and Buyer Parent on 13 January 2014, and which is hereby terminated and of no further force and effect).

12.2	Each party acknowledges that in agreeing to enter into this Deed, it has not relied on any representation or warranty made by or on behalf of any other party, except as set forth in this Deed.

12.3	Nothing in this clause limits or excludes any liability for fraud.

13.	INVALIDITY

If at any time all or any part of any provision of this Deed is or becomes illegal, invalid or unenforceable in any respect under any Law, such action shall not affect or impair:

13.1.1

the legality, validity or enforceability in that jurisdiction of the remainder of that provision or all other provisions of this Deed; or

13.1.2

the legality, validity or enforceability under the Law of any other jurisdiction of that provision or ail other provisions of this Deed.

14.	AMENDMENTS, WAIVERS AND RIGHTS

14.1	Amendments

No amendment or variation of the terms of this Deed shall be effective unless it is made or confirmed in a written document signed by, or on behalf of, each party.

14.2	Delay in exercise/non-exercise of rights

Except as expressly set out in this Deed, no delay in exercising, or non-exercise, by a party of any right, power or remedy provided by Law or under this Deed impairs, or constitutes a waiver or release of, that right, power or remedy.

14.3	Waivers

Any waiver or release must be specifically granted in writing signed by the party granting it and shall:

14.3.1

be confined to the specific circumstances in which it is given;

14.3.2

not affect any other enforcement of the same or any other right; and

14.3.3

unless it is expressed to be irrevocable, be revocable at any time in writing.

To the extent any waiver by Buyer related to clauses 8, 15, 19, and 22 is adverse to the rights of the Financing Sources, the prior written consent of the Financing Sources shall be required before such waiver is rendered effective.

14.4	Exercise of rights

No single or partial exercise of any right, power or remedy provided by Law or under this Deed prevents any other or further exercise of it or the exercise of any other right, power or remedy.

14.5	Rights and remedies cumulative

Except as expressly set out in this Deed, the rights, powers and remedies of each party under this Deed are cumulative.

14.6	Survival

Any provision of this Deed which is capable of being performed after, but which has not been performed at or before, Completion and all Warranties, covenants and other undertakings contained in, or entered into pursuant to, this Deed shall remain in full force and effect notwithstanding Completion.

15.	ASSIGNMENT

This Deed is personal to the Sellers, Buyer, Buyer Parent and Merger Sub. Accordingly, none of Buyer, Buyer Parent, Merger Sub or any Seller shall assign, transfer, declare a trust for the benefit of, or in any other way alienate, or create rights over, any of its rights or benefits under this Deed, whether in whole or in part; provided that, Buyer may (a) assign its rights (but not its obligations) under this Deed and the other Transaction Documents to any subsidiary that is wholly-owned by it as of the Completion Date so long as such wholly-owned assignee agrees to be bound by all the terms and conditions of this Deed, and (b) collaterally assign any or all of its rights and obligations under this Deed to any of its Financing Sources providing Financing and any agent for such Financing Sources as security for the Financing.

16.	THIRD PARTY RIGHTS

16.1

Save for the Third Party Beneficiaries and in accordance with clause 16.2, the parties do not intend that any term of this Deed should be enforceable by virtue of the Third Parties Act by any person who is not a party to this Deed. Nothing in this clause 16 affects any right or remedy of a third party which exists or is available apart from the Third Parties Act.

16.2	The Third Party Beneficiaries may enforce the relevant provisions of this Deed, subject to and in accordance with the Contracts (Rights of Third Parties) Act 1999 provided that:

16.2.1

this Deed may be varied from time to time or rescinded without the consent of all or any of the Third Party Beneficiaries and s2(1)(a) to (c) Contracts (Rights of Third Parties) Act 1999 shall not apply to this Deed;

16.2.2

none of the Third Party Beneficiaries may assign any of their respective rights under any of those clauses either in whole or in part; and

16.2.3

neither Oldford nor any Oldford Group Company nor any officer, employee, agent or adviser thereof or thereto may take any steps to enforce all or any of its rights under clauses 11.1 to 11.4 against any of the Sellers without Buyer’s prior written consent and without first having appointed Buyer as its agent to have sole conduct of all proceedings involving that Oldford Group Company.

17.	NOTICES

17.1	Form of notices

Any notice shall be:

17.1.1

in writing;

17.1.2

in the English language; and

delivered personally or sent by commercial courier or by email (provided that, if sent by email, a hard copy is also delivered personally or by commercial courier as soon as reasonably practicable thereafter and in any event within five Business Days of such email being sent) to the party due to receive the notice marked for the attention of the person set out in clause 17.3 and to the address set out therein or to such other address, person or email address as may be notified from time to time in accordance with this clause 17 by the relevant party to the other parties, by not less than 10 Business Days’ written notice.

17.2	Notice deemed given

Unless there is evidence that it was received earlier, a notice is deemed given:

17.2.1

if delivered personally, at the time of delivery;

17.2.2

if sent by commercial courier, on the date and at the time of signature of the courier’s delivery receipt; and

17.2.3

if sent by email, at the time of sending, provided that:

(a)

no notification informing the sender that the message has not been delivered is received by the sender; and

(b)

a hard copy of the email is delivered personally or by commercial courier within five Business Days of such email being sent;

provided that if any notice would otherwise become effective on a non-Business Day or after 17:00 hours on a Business Day, it shall instead become effective at 09:00 hours on the next Business Day.

17.3	Details of the parties

The details for the purposes of clause 17 are:


If to the Warranting Sellers, to the Sellers’		Igal Mark Scheinberg
Representative:		[INTENTIONALLY DELETED]


with a copy (which shall not constitute notice) to:	Herzog Fox & Neeman
	Asia House, 4 Weizmann St.
	Tel Aviv 6423904, Israel
	Telephone:	(972) 3 692-2020
	Facsimile:	(972) 3 696-6464
	Attention:	Alan Sacks
		Ran Hai
	Email:	sacksa@hfn.co.il
		hair@hfn.co.il

If to Merger Sub or Buyer, to:	Amaya Holdings B.V.
	Martinus Nijhofflaan 2
	2624ES Delft
	The Netherlands

with a copy (which shall not constitute notice) to:	Amaya Gaming Group Inc.
	7600 Trans-Canada Highway
	Pointe-Claire, Quebec H9R 1C8, Canada
	Telephone:	(514) 744-3122
	Facsimile:	(514) 744-5114
	Attention:	David Baazov
		Chief Executive Officer
	Email:	david.baazov@amayagaming.com

	and

	Telephone:	(514) 744-3122
	Facsimile:	(514) 744-5114
	Attention:	Marlon D. Goldstein, Esq.
		Executive Vice President, Corporate
		Development and General Counsel
	Email:	marlon.goldstein@amayagaming.com

	and

	Greenberg Traurig, P.A.
	333 S.E. 2^nd Avenue
	Miami, Florida 33131 U.S.A.
	Telephone:	+1 (305) 579-0748
	Facsimile:	+1 (305) 961-5748
	Attention:	Gary Epstein, Esq.
		Lorne Cantor, Esq.
	Email:	epsteing@gtlaw.com
		cantorl@gtlaw.com

If to Buyer Parent, to:	Amaya Gaming Group Inc.
	7600 Trans-Canada Highway
	Pointe-Claire, Quebec H9R 1C8, Canada
	Telephone:	(514) 744-3122
	Facsimile:	(514) 744-5114
	Attention:	David Baazov
		Chief Executive Officer
	Email:	david.baazov@amayagaming.com

	and

	Telephone:	(514) 744-3122


	Facsimile:	(514) 744-5114
	Attention:	Marlon D. Goldstein, Esq.
		Executive Vice President, Corporate
	Email:	Development and General Counsel marlon.goldstein@amayagaming.com

with a copy (which shall not constitute notice) to:	Greenberg Traurig, P.A.
	333 S.E. 2^nd Avenue
	Miami, Florida 33131 U.S.A.
	Telephone:	+1 (305) 579-0748
	Facsimile:	+1 (305) 961-5748
	Attention:	Gary Epstein, Esq.
		Lorne Cantor, Esq.
	Email:	epsteing@gtlaw.com
		cantorl@gtlaw.com

17.4	Notice to personal representatives

If a party (being an individual) dies, any notice addressed to the deceased or to his personal representatives and sent or delivered in accordance with clause 17.3 shall, pending receipt by the other parties of a certified copy of the grant of representation to the estate of the deceased, be deemed sufficient service of that notice on the deceased and his personal representatives for all purposes and shall be as effectual as if the deceased were still living.

18.	COUNTERPARTS

18.1	Any number of counterparts

This Deed may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each of the parties has executed at least one counterpart.

18.2	Each counterpart an original; electronic signatures

Each counterpart constitutes an original of this Deed, but all the counterparts together constitute but one and the same instrument. Facsimile or other electronically scanned and transmitted signatures, including by email attachment, shall be deemed originals for all purposes of this Deed.

19.	GOVERNING LAW AND JURISDICTION

19.1	Governing law

This Deed, and any dispute or claim arising out of, or in connection with, it or its subject matter or formation (including non-contractual disputes or claims), shall be governed by, and construed in accordance with, the law of England and Wales.

19.2	Dispute resolution

19.2.1

Unless where otherwise expressly specified herein, any dispute arising out of, or in connection with, this Deed, including in respect of the Indemnity Escrow Agreement or any other Transaction Document, including any question regarding any of their existence, validity or termination, shall be submitted to arbitration at the request of, and upon written notice by, any disputing party and shall be finally determined by arbitration pursuant to the rules of the London Court of International Arbitration (“LCIA”) which rules are deemed to be incorporated by reference into this clause. The seat or legal place of arbitration shall be London, England, and the arbitration

proceedings shall take place in London, England, before a panel of three arbitrators (the “Panel”), and shall be conducted in English. The Panel members shall be appointed as follows: (a) each of the Sellers’ Representative and Buyer may appoint one (1) member at its own discretion; and (b) an additional member shall be jointly selected by the Sellers’ Representative and Buyer. If the Sellers’ Representative and Buyer are unable to agree on the identity of a third Panel member, such third Panel member shall be selected by the LCIA. The decision of the arbitrators (an “Arbitration Award”) shall be binding and final on all the parties and not be subject to any appeal under any Law governing such procedures in respect of such arbitration proceedings.

19.2.2

If any witness required for such proceedings who is a Seller, or an employee, consultant or agent of any of the Oldford Group Companies or Buyer is located in a jurisdiction outside of London (a “Remote Location”), the Sellers’ Representative and Buyer will meet with the Panel at the time of the proceeding to agree on an acceptable process of obtaining such witness’s testimony, which may include taking testimony in such Remote Location via a live hearing, video or other recording, video conference or affidavit.

19.2.3

Notwithstanding anything in this Deed to the contrary, each of the parties hereto agrees that it will not bring or support any action, cause of action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract in tort or otherwise, against the Financing Sources in any way relating to this Deed or any of the transactions contemplated by this Deed, including any dispute arising out of or relating in any way to the Financing Sources, the Commitment Documents or the performance thereof in any forum other than a state or federal court sitting in the Borough of Manhattan in the City of New York, in the State of New York, United States. For the elimination of doubt, any dispute arising out of, or in connection with, this Deed or the Contemplated Transaction between the parties hereto shall be brought and conducted in accordance with clause 19.2.1.

19.3	Specific performance; injunctive relief

19.3.1

The parties hereto agree that irreparable damage would occur if any provision of this Deed were not performed by each party in accordance with the specific terms hereof or were otherwise breached by such party. It is accordingly agreed that each party shall be entitled, without posting a bond or similar indemnity, to an injunction or injunctions to prevent breaches of this Deed or to specifically enforce the performance of the terms and provisions hereof in any court or arbitral tribunal located in London, England, in addition to any other remedy to which such party may be entitled at law or in equity. The parties agree not to oppose the granting of an injunction, specific performance or other equitable relief when expressly available pursuant to the terms of this Deed on the basis that such party has an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or in equity.

19.3.2

Buyer, Oldford and the Warranting Sellers acknowledge and agree that the agreements contained in this clause 19.3 are an integral part of the Contemplated Transactions, and that, without these agreements, none of Buyer, Oldford and the Warranting Sellers would enter into this Deed. The

parties hereto acknowledge that the damages resulting from a party’s failure to complete the Contemplated Transactions in accordance with the terms of this Deed are uncertain and incapable of accurate calculation and that specific performance is a reasonable and appropriate remedy in the event such party breaches its obligations under this Deed.

19.3.3

Notwithstanding the foregoing clauses 19.3.1 and 19.3.2, in no event shall Oldford or any Seller have the right to cause the Buyer to effect Completion, and Oldford and Sellers shall not be entitled to an injunction or injunctions or specific performance or other equitable relief in respect of causing Completion,

19.4	No public announcements

No public announcement or disclosure will be made by any party with respect to the subject matter of this Deed or the Contemplated Transactions without the prior written consent of Buyer and the Sellers’ Representative. Additionally, Buyer and the Sellers’ Representative shall agree on the form and content of any public announcement or disclosure with respect to this Deed or the Contemplated Transactions prior to the issuance thereof, including providing each other the opportunity to review and comment upon, and agree upon, any such public announcement or disclosure, and no such public announcement or disclosure shall be issued prior to such consultation and agreement; provided, however, that the provisions of this clause 19.4 will not prohibit (a) any disclosure required by any applicable Legal Requirements, including any disclosure necessary or desirable to provide proper disclosure under the securities laws or under any rules or regulations of any securities exchange on which the securities of such party may be listed or traded (provided that in such event, and to the extent permissible under applicable Legal Requirements, the announcing party shall use all reasonable endeavours to consult with the other party(ies) as to the content and form of any such public announcement or disclosure and consider in good faith any comments the other party(ies) may have), or (b) any disclosure made in connection with the enforcement of any right or remedy relating to, or the performance of any obligation arising under, this Deed or the Contemplated Transactions.

20.	FEES AND COSTS

Except as otherwise explicitly provided for in this Deed, all fees and expenses incurred in connection with the Contemplated Transactions shall be paid by the party incurring such fees or expenses, whether or not the Contemplated Transactions are consummated.

21.	AGENT FOR SERVICE OF PROCESS

21.1	Maintenance of agent

The Sellers’ Representative, Oldford, Buyer, Merger Sub and Buyer Parent shall at all times maintain an agent for receipt of service of process in England.

21.2	Appointment of agent

Pursuant to clause 21.1:

21.2.1

the Sellers’ Representative appoints Wiggin LLP, located at 10^th Floor, Met Building, 22 Percy Street, London W1T 2BU;

21.2.2

Oldford appoints Wiggin LLP, located at 10th Floor, Met Building, 22 Percy Street, London W1T 2BU; and

21.2.3

Buyer, Buyer Parent and Merger Sub appoint Trident Company Services (UK) Limited, located at 7 Welbeck Street, London, WIG 9YE.

as their respective agents for the purpose of service of process in England.

21.3	Service of documents

Any Service Document shall be deemed to have been duly served if marked for the attention of Trident Company Services (UK) Limited at 7 Welbeck Street, London, WIG 9YE or Wiggin LLP, located at 10th Floor, Met Building, 22 Percy Street, London W1T 2BU, as the case may be, and:

21.3.1

left at the specified address, in which case the Service Document shall, unless there is evidence that it was received earlier, be deemed to have been duly served at the time it is left; or

21.3.2

sent by commercial courier to the specified address, in which case the Service Document shall, unless there is evidence that it was received earlier, be deemed to have been duly served on the date and at the time of signature of the courier’s delivery receipt,

provided, that if any Service Document would otherwise be duly served on a non-Business Day or after 17:00 hours on a Business Day, it shall instead be duly served at 09:00 hours on the next Business Day.

21.4	Replacement agent(s)

If for any reason an agent appointed under this clause 21 ceases to act as such or ceases to have an address in England:

21.4.1

the relevant party shall promptly appoint a replacement agent having an address for service in England and notify the remaining parties of the appointment and the name and address of the replacement agent; and

21.4.2

failing such appointment and notification within five Business Days of such cessation, the remaining parties shall be entitled by notice to the relevant party to appoint a replacement agent to act on the relevant party’s behalf,

and the provisions of this clause 21 applying to service on an agent apply equally to service on a replacement agent.

21.5	Buyer Parent Guarantee

21.5.1

Buyer Parent hereby absolutely, unconditionally and irrevocably:

(a)

guarantees, as a primary obligor and not merely as a surety, to Oldford and the Sellers (i) the full and punctual payment when due of all applicable payment obligations of Buyer and Merger Sub under this Deed, including the Merger Consideration and the Deferred Payment Amount, and (ii) the full and punctual observance and performance of all of Buyer’s and Merger Sub’s liabilities and obligations under, or arising out of, this Deed; and

(b)

agrees that the Sellers and the Sellers’ Representative may enforce their, and other Participating Equityholders’, rights against Buyer Parent without first exercising any rights or remedies against Buyer or Merger Sub.

21.5.2

Buyer Parent agrees that its obligations pursuant to this clause 21.5 shall not be released or discharged, in whole or in part, or otherwise affected by: (a) the failure of the Sellers to assert any claim or demand or to enforce any right or remedy against Buyer or Merger Sub; (b) any change in the time, place or manner of payment of any amounts Buyer or Merger Sub is required to pay or performance of Buyer’s or Merger Sub’s obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of this Deed or any other Transaction Document, other than to the extent agreed to by the Sellers’ Representative in advance; (c) the addition, substitution or release of any person (other than Buyer or Merger Sub) interested in the Contemplated Transactions; (d) any change in the Organisational Documents or name of Buyer, Merger Sub the Oldford Group Companies or any other person or any change of control in any of them; (e) any insolvency, bankruptcy, reorganisation, liquidation, winding-up, incapacity, disability or other similar proceeding affecting Buyer or Merger Sub; (f) the existence of any claim, set-off or other rights which Buyer Parent may have at any time against Buyer or Merger Sub or any of their respective Affiliates; or (g) the adequacy of any other means the Sellers may have of obtaining payment of the Buyer’s or Merger Sub’s applicable payment obligations under this Deed or the other Transaction Documents, including the Confirmed Completion Date Purchase Price and the Deferred Payment Amount.

21.5.3

Buyer Parent agrees that Oldford, the Warranting Sellers and Buyer may at any time, and from time to time, without notice to or further consent of Buyer Parent, change the time of payment or performance of any obligations of Buyer or Merger Sub under this Deed in accordance with the terms hereof and thereof, and may also make any agreement with Buyer or Merger Sub for the extension, renewal, payment, compromise, discharge, amendment, change or release thereof, in whole or in part, or for any modification of the terms thereof, without in any way impairing or affecting the guarantee set forth in this clause 21.5. Buyer Parent waives notice of the acceptance of this guarantee, presentment, demand for payment, notice of dishonour and protest.

21.5.4

No failure on the part of a Seller to exercise, and no delay in exercising, any right, remedy or power pursuant to this clause 21.5 shall operate as a waiver thereof, nor shall any single or partial exercise by such Seller of any right, remedy or power pursuant to this clause 21.5 preclude any other or future exercise of any right, remedy or power pursuant to this clause 21.5. Each and every right, remedy and power hereby granted to the Sellers pursuant to this clause 21.5 or allowed to them by Law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Sellers at any time or from time to time.

21.5.5

Buyer Parent acknowledges that its guarantee set out in this clause 21.5 is delivered to the Warranting Sellers and Oldford with the intention of inducing the Warranting Sellers and Oldford to enter into this Deed and that the Warranting Sellers and Oldford have entered into this Deed in reliance upon such guarantee.

21.5.6

Each Warranting Seller may enforce the provisions of this clause 21.5 subject to and in accordance with the provisions of the Third Parties Act.

22.	NON-RECOURSE

Subject to the rights of Buyer under the Commitment Documents or the Definitive Agreements, in each case under the terms thereof, none of the Financing Sources shall have any liability for any obligations or liabilities of any party hereto under this Deed or for any claim (whether in contract, tort or otherwise) based on, in respect of, or by reason of (or in any way relating to), the transactions contemplated hereby, including any dispute arising out of or relating in any way to the Commitment Documents, the transactions contemplated thereby or the performance thereof and the parties hereto agree not to assert any such claim or bring any action, suit or proceeding in connection with any such claim against any Financing Source.

23.	EXECUTION

The parties have shown their acceptance of the terms of this Deed by executing it after the Schedules.

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SCHEDULE 1

KEY INFORMATION


Part 1 – Details of Oldford

Company number	:	[*****]
Date of incorporation	:	10 October 2001, continued in the Isle of Man on 20 November 2013
Place of incorporation	:	British Virgin Islands, continued in the Isle of Man
Registered office	:	Douglas Bay Complex, King Edward Road, Isle of Man IM3 1DZ
Directors	:	[*****]
		[*****]

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Part 2 – Details of the subsidiaries of Oldford

[INTENTIONALLY DELETED]

Part 2(b) – Dormant Entities

[INTENTIONALLY DELETED]

Part 3 – Details of Joint Ventures

[INTENTIONALLY DELETED]

Part 4 – The Sellers

1.	OLDFORD – WARRANTING SELLERS

[INTENTIONALLY DELETED]

1.1

HOLDERS OF VESTED PHANTOM PLAN EQUITY AWARD UNITS

[INTENTIONALLY DELETED]

SCHEDULE 2

EXAMPLES OF POST-COMPLETION MERGER CONSIDERATION ADJUSTMENT CALCULATIONS

[INTENTIONALLY DELETED]

SCHEDULE 3

CONDITIONS

PART 1

1.1	No Legal Prohibition.

No Relevant Authority shall have enacted, issued, promulgated, enforced or entered into any Law or Order and no other legal or regulatory restraint or prohibition shall be in effect, in either case, which has the effect of making the Contemplated Transactions illegal or that otherwise prohibits the Contemplated Transactions, or requires the payment of any damages in connection with the Contemplated Transactions, and no Action in which any of the foregoing is sought shall be pending or, with respect to the jurisdictions listed on Exhibit 3.1.1(a), threatened in writing; provided, that the foregoing Condition shall not apply to Actions brought by the Relevant Authorities listed on Exhibit 3.1.1(b).

1.2	[Reserved]

1.3	Relevant Authority Consents.

Buyer and Oldford shall have received and delivered to the other (as applicable) the Consents listed on Exhibit 3.1.3 from the applicable Relevant Authorities in each case in form and substance reasonably satisfactory to Buyer and the Sellers’ Representative; provided, that such Consent shall not be deemed to have been received if it is conditioned upon any of the matters for which Buyer is not required to undertake pursuant to Schedule 4, clause 3.5.

1.4	No Actions.

Since the date of this Deed, there must not have been commenced against Buyer, any Oldford Group Company or the Sellers or against any person Affiliated with Buyer, the Oldford Group Companies or the Sellers, any Action brought by a person other than a Relevant Authority: (a) that satisfies the Condition Requirement or (b) that is reasonably likely to have the effect of preventing, making illegal or otherwise materially interfering with the Contemplated Transactions; provided that in any such case of clause (a) or (b), such Action has not been fully resolved without additional cost or Liability to Buyer (including, in the case of clause (a), that such Action shall have been Definitively Resolved).

1.5	Oldford Shareholder Approval

The Oldford Shareholder Approval shall have been obtained.

1.6	Expiration of Merger Notice Period

The Merger Notice Period shall have expired.

PART 2

2.1	Accuracy of Warranties on Schedule 6.

(a)

The Fundamental Warranties of Oldford and the Warranting Sellers shall be true and correct in all respects when made and on and as of Completion as if made at and as of Completion (except for such Fundamental Warranties that relate to a particular date, which Fundamental Warranties shall be true and correct in all respects as of such date).

(b)

The Warranties (other than Fundamental Warranties) of Oldford and the Warranting Sellers contained in Schedule 6, part 1 or part 2, as applicable, that are qualified by a Materiality Qualifier shall be true and correct in all respects as written when made and on and as of Completion as if made at and as of Completion (except for such Warranties that are so qualified by a reference to a Materiality Qualifier that relate to a particular date, which Warranties shall be true and correct in all respects (including the Materiality Qualifier) as of such date).

(c)

The Warranties (other than Fundamental Warranties) of Oldford and the Warranting Sellers contained in Schedule 6, part 1 and part 2, as applicable, that are not qualified by a Materiality Qualifier shall be true and correct in all material respects when made and on and as of Completion as if made at and as of Completion (except for such Warranties that are not so qualified and relate to a particular date, which Warranties shall be true and correct in all material respects as of such date).

2.2	Covenants.

All the covenants and obligations that the Warranting Sellers and/or Oldford are required to perform or to comply with pursuant to this Deed at or prior to the Completion Date must have been performed and complied with in all material respects.

2.3	No Material Adverse Effect.

Since the date of this Deed, no Material Adverse Effect shall have occurred.

2.4	[INTENTIONALLY DELETED]

2.5	Senior Officer Agreements

The Senior Officer Agreements shall have been executed and delivered by each of the persons listed on Exhibit E.

PART 3

3.1	Accuracy of Buyer’s, Merger Sub’s and Buyer Parent’s Warranties.

(a)

The Fundamental Warranties of Buyer, Buyer Parent and Merger Sub shall be true and correct in all respects when made and on and as of Completion as if made at and as of Completion (except for those Fundamental Warranties that relate to a particular date, which Fundamental Warranties shall be true and correct in all respects as of such date).

(b)

The Warranties (other than Fundamental Warranties) of (i) Buyer and Buyer Parent contained in Schedule 6, part 3 and (ii) Merger Sub contained in Schedule 6, part 4 that are qualified by a Materiality Qualifier shall be true and correct in all respects as written when made and on and as of Completion as if made at and as of Completion (except for such Warranties that are qualified by a reference to a Materiality Qualifier that relate to a particular date, which Warranties shall be true and correct in all respects (including the Materiality Qualifier) as of such date).

(c)

The Warranties (other than Fundamental Warranties) of (i) the Buyer and Buyer Parent contained in Schedule 6, part 3 and (ii) Merger Sub contained in Schedule 6, part 4 that are not qualified by a Materiality Qualifier shall be true and correct in all material respects when made and on and as of Completion as if made at and as of Completion (except for such Warranties that are not so qualified and relate to a particular date, which Warranties shall be true and correct in all material respects as of such date).

3.2	Covenants.

All the covenants and obligations that Buyer is required to perform or to comply with pursuant to this Deed at or prior to the Completion Date must have been performed and complied with in all material respects.

SCHEDULE 4

CONDUCT DURING INTERIM PERIOD

1.	ACCESS AND INVESTIGATION.

During the Interim Period, Oldford and the Warranting Sellers will, and will cause each of their respective Affiliates and Representatives (as applicable) to (in each case, unless prohibited by applicable Legal Requirement), (a) afford Buyer and its Representatives, upon reasonable advance notice and during regular business hours, reasonable and unrestricted access to the Oldford Group Companies’ personnel (including for purposes of negotiating post-Completion employment and non-competition undertakings), properties, Contractual Obligations, books and records (including all Tax records), and other documents and data; (b) furnish Buyer and its Representatives with and upload to the Data Room copies of all such Contractual Obligations, books and records, and other existing documents and data as Buyer and its Representatives may reasonably request; and (c) furnish Buyer and its Representatives with and upload to the Data Room such additional financial, operating, and other data and information as Buyer or its Representatives may reasonably request; provided, that no investigation pursuant to this paragraph 1 shall affect or be deemed to modify any of the Warranties made by Oldford or any Warranting Seller. Buyer and its Representatives shall conduct their investigations pursuant to this provision in such a manner so as to not interfere with the normal operations of any Oldford Group Company, and in a manner so as to minimise any disruptions with the Business. The Buyer shall procure that any of its Representatives who gain access to the information of the Oldford Group Companies shall be bound by confidentiality obligations no less onerous than those set forth in the Non-Disclosure Agreement.

2.	OPERATION OF THE OLDFORD GROUP COMPANIES AND THE BUSINESS.

2.1

Except (a) as expressly consented to in writing by Buyer or as contemplated hereby or (b) as required to comply with any Legal Requirement during the Interim Period, Oldford shall (and the Warranting Sellers shall cause Oldford to) use its reasonable endeavours to, and Oldford shall procure that each Oldford Group Company shall use its reasonable endeavours to, act and carry on the Business solely in the Ordinary Course of Business and shall use reasonable endeavours to maintain and preserve such Oldford Group Company’s business organisation, Assets, material Permits (it being understood that all Gaming Approvals held by any of the Oldford Group Companies as of the date of this Deed and listed on Exhibit 3.1.3 are material) and properties, preserve its business relationships with customers, strategic partners, material suppliers, material distributors and others having material business dealings with it, continue to perform under all Material Contracts, and keep available the services of its present officers, Material Employees and Original Consultants that are material to the Business. Without limiting the generality of the foregoing, and notwithstanding Schedule 4, part 2.2.1(h), no Oldford Group Company shall fail to make any expenditure or payment, on a timely basis, required to be made in relation to or in connection with (i) the Oldford Stipulation, (ii) the maintenance of any Gaming Approval in any of the jurisdictions where any Oldford Group Company holds a Gaming Approval as of the date of this Deed and listed, or required to be listed, in Annex C to the Disclosure Schedule or (iii) any application to receive a Gaming Approval which is pending as of the date of this Deed.

2.2

Without limiting the generality of the foregoing, except (a) as required to comply with any Legal Requirement or any existing Material Contract, following notification to the Buyer (to the extent permitted by applicable Law or the terms of such existing Material Contract), (b) as expressly consented to in writing by Buyer (which consent shall not be unreasonably conditioned, withheld or delayed) or (c) as contemplated by this Deed, during the Interim Period:

2.2.1

no Oldford Group Company shall directly or indirectly do any of the following:

(a)

declare, set aside or pay any distributions or dividends, split, combine or reclassify any Equity Securities or issue or authorise the issuance of any other Equity Securities in respect of, in lieu of or in substitution for its Equity Securities or Debt; or purchase, redeem or otherwise acquire any Equity Securities; provided that:

(i)

the Oldford Group Companies may declare and pay during the Interim Period one or more distributions or dividends to their respective holders of Equity Securities so long as such distributions or dividends are paid solely in Cash and, in the aggregate, would not, based on the good faith estimations of Oldford’s board of directors, cause the Net Working Capital to be less than the level of Net Working Capital reasonably required by Oldford in the Ordinary Course of Business on the date of any such distribution or dividend or at any time prior to Completion,

(ii)

during the Interim Period, Oldford shall be entitled to grant: (A) Oldford Share Options and Oldford Share Awards to directors, officers, Employees and Consultants of the Oldford Group Companies which represent, in the aggregate, up to the remaining authorized but unissued share capital of Oldford on a fully diluted basis following their issuance (provided that all such Equity Securities underlying these awards or grants shall be sold, or exercised and sold, to Buyer as part of the Contemplated Transactions in accordance with the terms of this Deed, or cashed out and cancelled prior to Completion, as the case may be (collectively, the “Interim Period Employee Shares”)), and (B) up to 150,000 “phantom” equity share awards; and

(iii)

any issuance of Equity Securities or Debt by any of the Oldford Group Companies to any other Oldford Group Company shall be permitted (provided that any such issuance shall be made after consultation with Buyer);

(b)

issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any Equity Securities or Debt other than (i) in accordance with any Oldford Share Award, Oldford Share Option or Oldford “phantom” equity awards that is outstanding as of the date of this Deed, or as otherwise permitted by part 2.2.1(a) above, or (ii) to another Oldford Group Company;

(c)

amend or adopt any amendments to its Organisational Documents;

(d)

acquire by merging, or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any person or division thereof, or any assets that are material, in the aggregate, to such Oldford Group Company; or otherwise re-register, continue or de-merge any such business, person or assets;

(e)

sell, lease, licence, pledge or otherwise dispose of or otherwise encumber or subject (or allow to become subject) to any Encumbrance, other than Permitted Encumbrances, any of its material properties or Assets, including any capital asset or related capital assets with a fair market value in excess of $750,000 individually or $2,000,000 in the aggregate during the Relevant 9-Month Period, other than any intra-Oldford Group Company transaction effected to the benefit of an Oldford Group Company;

(f)

enter into, amend or modify any Material Contract in any material way or waive, release or assign any material rights or claims under any Material Contract, other than any modification, amendment, replacement or renewal of such Material Contract on substantially the same or better terms;

(g)

(i) incur any Debt in excess of $1,000,000 individually or $2,000,000 in the aggregate, (ii) issue, sell or amend any Debt in excess of $1,000,000 individually or $2,000,000 in the aggregate, (iii) Guarantee or otherwise become Liable for any Debt of another person (other than another Oldford Group Company) in an amount exceeding $1,000,000 individually or $2,000,000 in the aggregate, (iv) make any material loans, advances or capital contributions to, or new investment in, any other person (other than advances to players or other customers in the Ordinary Course of Business) in an amount exceeding $1,000,000 individually or $2,000,000 in the aggregate, (v) modify or cancel any third-party Debt owed to any such Oldford Group Company which is in excess of $1,000,000 individually or $2,000,000 in the aggregate, or (vi) enter into any new arrangement having the economic effect of the foregoing, in each case of (i) through (vi) above, during the Relevant 9-Month Period; the foregoing prohibitions shall not apply to any intercompany arrangements among the Oldford Group Companies or, for the elimination of doubt, the incurrence of any players’ liability in accordance with current policies and procedures;

(h)

make any new capital expenditures of more than $3,000,000 individually or that, when added to all other capital expenditures made by or on behalf of any such Oldford Group Company during the Relevant 9-Month Period, exceeds $18,000,000 in the aggregate;

(i)

(A) adopt, enter into, terminate or amend any Pensions Scheme, (B) increase the compensation or fringe benefits of (other than increases in the Ordinary Course of Business), or pay any bonus not required by an existing plan, arrangement or agreement to, any officer of any Oldford Group Company in an amount exceeding $5,000,000 in the aggregate for all such officers during the Relevant 9-Month Period, (C) grant or issue any Equity Securities to any Employee or Consultant other than (i) in connection with the terms of any Contractual Obligation that was entered into by an Oldford Group Company prior to the date of this Deed or (ii) in accordance with part 2.2.1(a) above, or (D) take any action other than in the Ordinary Course of Business to fund or in any other way secure the payment of compensation or benefits under any Pensions Scheme;

(j)

except as required to comply with applicable Taxation Statutes, (i) make, revoke, amend or change any election in respect of Taxes, (ii) file any amendment to a Tax Return, (iii) settle any Action or assessment in respect of Taxes, or (iv) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or enter into any other Contractual Obligation in respect of Taxes with any Tax Authority;

(k)

pay, discharge, settle or satisfy any Action that would require an Oldford Group or the Oldford Group Companies to:

(iv)

during the Relevant 9-Month Period, forfeit Assets having a value, in the aggregate, of more than $5,000,000;

(v)

forfeit the right to operate in any jurisdiction; or

(vi)

during the Relevant 9-Month Period, pay more than $5,000,000 in any single payment or series of related payments, except, in the

case of this clause (iii), where (A) such Action seeks only money damages and does not seek an injunction or other equitable relief (or any other Action that would reasonably be expected to have the effect of materially prejudicing the goodwill or reputation of Buyer, the Business or the Oldford Group Companies), and (B) such payment is made prior to Completion or, if after Completion, is included in Current Liabilities or Debt;

(l)

commence any adversarial proceeding against a Relevant Authority;

(m)

file or make an application to obtain a Gaming Approval (i) in the US or in Canada, or (ii) in any other jurisdiction (which is not in the US or Canada), except, in respect of sub-clause (ii), for: (A) filings or applications to maintain Gaming Approvals that are held by an Oldford Group Company on the date of this Deed, or (B) applications which an Oldford Group Company would have made in the Ordinary Course of Business (provided that any such filing or application shall be made after consultation with Buyer);

(n)

terminate or fail to apply for the renewal of any Permit held by any Oldford Group Company as of the date of this Deed, which termination or failure to apply for renewal is likely to materially impact the Business; provided that, for the elimination of doubt, an Oldford Group Company may not terminate or fail to apply for renewal of any Gaming Approval under which any Oldford Group Company is operating on the date of this Deed;

(o)

enter into, amend or modify any collective bargaining agreement or union contract with any labour organisation, work council or union or waive, release or assign any rights or claims under any such collective bargaining agreement or union contract;

(p)

accelerate or defer any material obligation or payment by or to any such Oldford Group Company, or not pay any material accounts payable or other material obligation of such Oldford Group Company when due, unless contested in good faith with full and complete appropriate reserves provided in the Accounts; the foregoing shall not apply to any intra-Oldford Group Company obligation or payment existing between any Oldford Group Company unless such failure to pay would cause an Oldford Group Company to breach one of its payment obligations to any person who is not an Oldford Group Company;

(q)

fail to maintain insurance at levels substantially comparable to current levels or otherwise in a manner inconsistent with past practice;

(r)

other than with respect to the Dormant Entities, discontinue any line of business or adopt or undertake an Insolvency Event, restructuring, recapitalisation or other similar reorganisation;

(s)

take any action that would or would reasonably be expected to (i) result in a Warranty of Oldford becoming untrue in any material respect, (ii) result in any of the Conditions set forth in Schedule 3, part 1 or part 2 not being satisfied, or (iii) otherwise prevent or materially delay or materially impair its ability to consummate the Contemplated Transactions on the terms contemplated by this Deed;

(t)

make any change to its accounting methods, principles or practices (including with respect to Taxes) or to the Accounts or to the working capital policies applicable to each Oldford Group Company, except as required by IFRS;

(u)

sell or otherwise dispose of any Equity Securities or other Investment in any (i) Joint Venture or (ii) Investment Entity that enables an Oldford Group Company to operate in a particular jurisdiction (except, in each such case, for any sale or transfer to another Oldford Group Company);

(v)

except for entering into any non-exclusive licence agreements in the Ordinary Course of Business, transfer or grant to any third party (other than an Oldford Group Company) any rights with respect to any Company Owned Intellectual Property;

(w)

enter into any real property lease, other than real property leases having rent payments of less than $250,000 per annum or aggregate rental payments of less than $750,000 during the Relevant 9-Month Period;

(x)

form any subsidiary or acquire any Equity Security of any person (other than (i) Equity Securities of another Oldford Group Company, or (ii) Equity Securities of another person as a passive or financial investment in the Ordinary Course of Business);

(y)

other than as required pursuant to IFRS, write off as uncollectible, or establish any extraordinary reserve with respect to, any billed or unbilled Receivable or other Debt outside existing reserves, in each case, for an amount exceeding $1,500,000 individually or $6,000,000 in the aggregate during the Relevant 9-Month Period; or

(z)

authorise or enter into an agreement to do anything prohibited by the foregoing; and

2.2.2

no Warranting Seller shall directly or indirectly do any of the following:

(a)

sell, lease, pledge or otherwise transfer, dispose of or otherwise encumber or subject any Shares to any Encumbrance (or take any action which is likely to result in any Shares becoming subject to any Encumbrance);

(b)

take any action that would or would reasonably be expected to (i) result in a Warranty of such Warranting Seller becoming untrue, (ii) result in any of the Conditions set forth in Schedule 3, part 1 or part 2 not being satisfied, or (iii) otherwise prevent or materially delay or materially impair its, the Buyer’s or the Oldford Group Companies’ ability to consummate the Contemplated Transactions on the terms contemplated by this Deed; or

(c)

authorise or enter into a Contractual Obligation to do anything prohibited by the foregoing; and

2.2.3

Buyer shall not, directly or indirectly, do any of the following:

(a)

take any action that would or would reasonably be expected to (i) result in a Warranty of Buyer becoming untrue, (ii) result in any of the Conditions set forth in Schedule 3, part 1 or part 3 not being satisfied, or (iii) otherwise prevent or materially delay or materially impair its, the Sellers’ or the Oldford Group Companies’ ability to consummate the Contemplated Transactions on the terms contemplated by this Deed; or

(b)

authorise or enter into a Contractual Obligation to do anything prohibited by the foregoing.

3.	REASONABLE ENDEAVOURS; NOTIFICATION.

3.1

Upon the terms and subject to the conditions set forth in this Deed, Buyer, the Sellers’ Representative, the Warranting Sellers and Oldford agree to use their respective reasonable endeavours to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary to fulfil all Conditions applicable to such party pursuant to this Deed and to consummate and make effective, in the most expeditious manner practicable, the Contemplated Transactions, including: (a) obtaining all necessary or required Permits, actions or non-actions, waivers and qualifications from the Relevant Authorities set forth in Schedule 3, part 1 and making all necessary or required registrations, filings and notices and taking all reasonable steps as may be necessary to obtain a Permit or waiver from any such Relevant Authority (including from any relevant Gaming Authority set forth in Schedule 3, part 1); (b) obtaining all necessary Permits, qualifications or waivers from non-governmental persons; and (c) executing and delivering any additional documents or instruments necessary or required to consummate the Contemplated Transactions by, and to fully carry out the purposes of, this Deed. In addition, prior to the Completion Date, Buyer, Oldford and the Warranting Sellers shall use their reasonable endeavours to, as applicable,(i) obtain the Consents from third parties set forth in Section 17.2 of the Disclosure Schedule, or (ii) pursuant to Buyer’s request, following consultation between Buyer and Sellers’ Representative, provide notices to third parties set forth in Section 17.2 of the Disclosure Schedules, in connection with the Contractual Obligations set forth on Section 17.2 of the Disclosure Schedules.

3.2

In addition to and without limitation of the foregoing, Buyer, Oldford and the Sellers’ Representative shall, as promptly as practicable, file with the relevant Gaming Authorities (for purposes of obtaining the Gaming Approvals set forth on Schedule 3, part 1, paragraph 1.3) the appropriate and necessary documentation for the approval or exemption, as the case may be, of the Contemplated Transactions. Each party shall bear its own costs for the preparation of such filings and responding to any inquiries or information requests, if applicable, and Buyer shall be responsible for the payment of any applicable filing and licence and any similar fees. Buyer, Oldford and the Warranting Sellers shall cooperate with one another (including by exchanging with and providing to each other such information as may be reasonably requested) (a) in promptly making any such filings, furnishing information required in connection therewith and seeking to obtain timely any such approval or exemption, and (b) in keeping the other party reasonably informed of the status of any communications with, and any inquiries or requests for additional information from, the Relevant Authority, including any Gaming Authority regarding any of the Contemplated Transactions. Each party shall provide the other with adequate time to review and provide comments to, prior to filing, all documents proposed by such party to be filed with any Relevant Authority, including any Gaming Authority to secure approval of, or exemption from, the Contemplated Transactions; provided that, the delivering party shall be permitted to exclude personal, confidential and proprietary information.

3.3

No party hereto shall independently participate in any substantive meeting or discussion, either in person or by telephone, with any Relevant Authority with respect to the Contemplated Transactions without giving the other party prior notice of such meeting or discussion. To the extent legally permissible, the parties shall grant each other party the opportunity to attend all meetings and discussions with the Relevant Authorities subject to the following conditions with respect to discussions and meetings with any Gaming Authority:

(a)

for jurisdictions where both Buyer and an Oldford Group Company hold or have applied for a Gaming Approval, both parties shall be required to participate in such meeting or discussion; provided, that each of Buyer and the Oldford Group Companies may have direct discussions with Relevant Authorities in the [*****] or [*****] without any Oldford Group Company’s participation (in case of Buyer’s discussions) or Buyer’s participation (in case of Oldford Group Companies’ discussions);

(b)

for jurisdictions where an Oldford Group Company holds or has applied for a Gaming Approval but Buyer does not hold such Gaming Approval nor has it applied for such Gaming Approval, both parties shall be required to participate in such meeting or discussion;

(c)

for jurisdictions listed on Exhibit 4.3.3(c) where only Buyer and its Affiliates hold a Gaming Approval, Buyer shall not be required to invite the Sellers’ Representative or an Oldford Group Company to participate in such meeting or discussion, but Buyer shall provide an update to the Sellers’ Representative following such meeting or discussion; provided that the Oldford Group Companies will be entitled to have direct discussions with the Relevant Authorities in [*****], including with respect to the reactivation of its application for [*****]; and

(d)

for jurisdictions where neither Buyer nor any Oldford Group Company holds a Gaming Approval, Buyer and Sellers’ Representative shall coordinate an approach to discuss the Contemplated Transactions with such applicable Relevant Authority and neither Buyer, Sellers’ Representative nor any Oldford Group Company will approach a Gaming Authority in such jurisdiction without the consent of the other.

Subject to applicable Law, the parties will consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto relating to an Action under any Law relating to approval or exemption by any relevant Gaming Authority or other Relevant Authority, in each case, to the extent applicable for the Completion of the Contemplated Transactions.

3.4

In the event that any Action is instituted (or threatened to be instituted) by a Relevant Authority or other third party challenging the Contemplated Transactions, or any other agreement contemplated hereby, Buyer, Sellers’ Representative and each Warranting Seller shall cooperate fully with each other and use their respective reasonable endeavours to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Contemplated Transactions, except, that if any of the Warranting Sellers or Oldford determines in good faith, in such Warranting Seller’s or Oldford’s sole discretion, that there exists a significant conflict of interest between such Warranting Seller or an Oldford Group Company and Buyer with respect to such Action, then such Warranting Seller or Oldford (as applicable) will be entitled to defend itself against such Action separately as it may deem fit; provided, however, that such Warranting Seller or Oldford Group Company may not take any position in the Action that could reasonably be expected to have the effect of delaying, preventing or conditioning the Contemplated Transactions, unless such Warranting Seller or Oldford Group Company reasonably believes that in the absence of taking such a position he will incur material damages, be indicted or found guilty in any criminal charges or face a similar material adverse effect.

3.5

Notwithstanding anything to the contrary, nothing herein shall obligate Buyer to (a) consent to any change in the terms of any Transaction Document which is materially adverse to the interests of Buyer or any of its Affiliates; (b) incur any material expenses (except as expressly contemplated hereby), or agree to limit the conduct of its or the Oldford Group Companies’ (or any of their respective subsidiaries’ or Affiliates’) respective businesses; (c) propose, negotiate, commit to or effect by consent decree, hold separate order, or otherwise, the sale, divestiture or disposition of any assets or businesses of Buyer or any Oldford Group Company (or any of their respective subsidiaries or Affiliates) that in the aggregate have a fair market value greater than $[*****]; or (d) other than as shall be required for the purpose of the Financing, implement or effectuate any changes to Buyer’s or any Oldford Group Company’s organisational or capital structure, including requiring voting and non-voting Equity Securities.

4.	ACQUISITION PROPOSALS.

4.1

During the Interim Period, Oldford, the Sellers’ Representative and the Warranting Sellers shall not, nor shall they permit or authorise any of their respective Representatives, or authorise any other person to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate (including by way of furnishing Confidential Information for that purpose) any inquiries, or the making of any proposal or offer, with respect to (in each of the following cases, other than as explicitly permitted pursuant to Schedule 4, part 2): (a) any merger, reorganisation, share exchange, continuance, re-registration, business combination, recapitalisation, consolidation, liquidation, dissolution or similar transaction involving any Oldford Group Company or the Oldford Group Companies, collectively; (b) any sale, lease, exchange, mortgage, pledge, transfer or purchase of a significant portion of the Assets or any Asset material to the Business; (c) offering, sale, issuance, exchange or other disposition of any Equity Securities of any Oldford Group Company; or (d) any purchase or sale of, or tender offer or exchange offer for Shares or any other Equity Securities of any Oldford Group Company (any such proposal or offer being hereinafter referred to as an “Acquisition Proposal”). Oldford and the Warranting Sellers shall not, nor shall they (i) permit or authorise any of their respective Representatives or (ii) authorise any person to, directly or indirectly, (A) engage in any negotiations concerning, or provide any Confidential Information or data to, or have any discussions or conversations with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement or accept an Acquisition Proposal, or (B) enter into any letter of intent or similar document contemplating, or enter into any agreement with respect to, an Acquisition Proposal.

4.2

Oldford and the Warranting Sellers will promptly notify Buyer in writing of the existence of any proposal, discussion, negotiation or inquiry received by any Oldford Group Company, any Warranting Seller, or to the Knowledge of Oldford, any Other Seller or any of their respective Representatives to the extent any such Representative communicates such information to Oldford or any Warranting Seller with respect to any Acquisition Proposal, and Oldford and the Warranting Sellers will promptly communicate to Buyer the terms of any proposal, discussion, negotiation or inquiry which it or they may receive, including a copy of any such proposal (other than the identity of the person making such proposal or inquiry or engaging in such discussion or negotiation).

4.3

Oldford and the Warranting Sellers will, and will cause their respective subsidiaries and Representatives to, immediately cease and cause to be terminated any existing activities, discussions or negotiations with any person(s) conducted heretofore with respect to any Acquisition Proposal. In addition, Oldford, the Sellers’ Representative and the Warranting Sellers shall promptly request (to the extent that they are entitled to do so) that each person who has heretofore received information in connection with such person’s consideration of an Acquisition Proposal return or destroy all Confidential Information heretofore furnished to such person by or on behalf of any Oldford Group Company or any Seller. No Oldford Group Company or the Warranting Sellers shall release any third party from, or waive any provision of, any confidentiality or standstill agreement which relates to any Acquisition Proposal, to which any Oldford Group Company or Seller is a party. Oldford and the Warranting Sellers agree that they will take the necessary steps to promptly inform their respective Representatives of the obligations undertaken by Oldford and the Warranting Sellers in this paragraph 4.3.

5.	OLDFORD STIPULATION.

Buyer, Oldford the Sellers’ Representative and the Oldford Stipulation Trustee shall, prior to Completion, enter into an irrevocable trust arrangement pursuant to which the Oldford Stipulation Trustee will be irrevocably instructed to (a) hold the Oldford Stipulation Amount, as of the Completion Date, in a trust account (the “Oldford Stipulation Trust Account”) until it becomes due and payable, and (b) pay the Oldford Stipulation Amount to such persons named in, on the date stated in, and in accordance with the terms of, the Oldford Stipulation. Oldford shall deposit the Oldford Stipulation Amount as of the Completion Date, into the Oldford Stipulation Account, no later than one Business Day prior to the Completion Date; provided that, Buyer shall have the unilateral right, in its sole and absolute discretion, to direct the Oldford Stipulation Trustee to pay the Oldford Stipulation Amount to the U.S. government at any time prior to such amount becoming due and payable. Any amount in respect of accrued interest left in the Oldford Stipulation Trust Account following the payment in full of the Oldford Stipulation Amount will be transferred by the Oldford Stipulation Trustee to Buyer.

6.	NOTICE AND CURE.

6.1.1

During the Interim Period, Oldford and the Warranting Sellers will notify Buyer in writing (where appropriate and only with respect to matters occurring after the date of this Deed, through updates to the Disclosure Letter) of, and contemporaneously or promptly thereafter will provide Buyer with and upload to the Data Room, true, correct and complete copies of any and all material information or documents relating to, and will use commercially reasonable endeavours to cure (to the extent curable) before Completion, any event, transaction or circumstance that existed or occurred on or after the date of this Deed, as soon as reasonably practicable after it becomes known to Oldford or any Warranting Seller, that causes or will cause: (i) any covenant or agreement of Oldford and/or the Warranting Sellers under this Deed to be breached in any material respect, (ii) the Condition set out in Schedule 3, part 2, paragraph 2.1 not to be satisfied, or (iii) the timely satisfaction of any other Condition to Completion impossible or unlikely. No notice (or updates to Disclosure Letter) given pursuant to this paragraph 6 shall have any effect on the Warranties or agreements contained in this Deed for purposes of determining satisfaction of any Condition, whether a breach or default has occurred, or the termination or indemnification rights of the parties provided by this Deed or otherwise.

6.1.2

During the Interim Period, Buyer will notify Oldford and the Warranting Sellers in writing of, and contemporaneously or promptly will provide Oldford and the Warranting Sellers with, true, correct and complete copies of any and all material information or documents relating to, and will use commercially reasonable endeavours to cure (to the extent curable) before Completion, any event, transaction or circumstance that existed or occurred on or after the date of this Deed, as soon as reasonably practicable after it becomes known to Buyer, that causes or will cause: (i) any covenant or agreement of Buyer under this Deed to be breached in any material respect, (ii) the Condition set out in Schedule 3, part 3, paragraph 3.1 not to be satisfied, or (iii) the timely satisfaction of any Condition to Completion impossible or unlikely. No notice given pursuant to this paragraph 6 shall have any effect on the Warranties or agreements contained in this Deed for purposes of determining satisfaction of any Condition, whether a breach or default has occurred, or the termination or indemnification rights of the parties provided by this Deed or otherwise.

7.	CONSULTATION.

During the Interim Period, subject to compliance with applicable Legal Requirements, and without interfering with the normal operations of any Oldford Group Company, Oldford will consult with management of Buyer, from time to time and as reasonably requested by Buyer, with a view to informing them as to any material developments with respect to the operation and management of the Oldford Group Companies.

8.	INTERIM ACCOUNTS.

During the Interim Period, Oldford shall provide Buyer, (a) within 15 Business Days after the end of each calendar month, the unaudited consolidated balance sheet, income statement and statement of cash flows as of the end of, or for, such month as applicable, for Oldford, and (b) within 20 Business Days after the end of each fiscal quarter, the unaudited consolidated balance sheet and the related income statement and statement of cash flows for such fiscal quarter for Oldford (in each case of clauses (a) and (b) prepared in accordance with their current form).

9.	AWARDS OF EQUITY SECURITIES AND PHANTOM EQUITY AWARDS.

9.1

Prior to or at Completion, the Warranting Sellers shall cause Oldford to, and Oldford shall, take all necessary action to effectuate either (or any combination of the following), (a) the termination of all outstanding unvested Interim Period Employee Shares, unvested Oldford Share Options, unvested Oldford Share Awards and unvested phantom equity awards, whether or not exercisable (including any portion that may become exercisable as a result of the Contemplated Transactions); (b) the exercise of and the issue and allotment of Shares pursuant to the Interim Period Employee Shares, Vested Oldford Share Options or Vested Oldford Share Awards into shares in Oldford; and/or (c) the cash-out of the Interim Period Employee Shares, Vested Oldford Share Options, phantom equity awards and/or the Vested Oldford Share Awards prior to Completion and to make any withholding of Tax with respect thereto, as and when applicable, and remit same to the relevant Tax Authority within the prescribed period, in each case to ensure that, following Completion, the holders of Interim Period Employee Shares, Oldford Share Options, phantom equity awards or Oldford Share Awards, whether, in each case, vested, unvested, exercisable or unexercisable, shall no longer have any rights with respect thereto (other than, in case of (b) or (c) above, the right to receive their respective portion of the Merger Consideration in accordance with this Deed). Any payments made by Oldford in respect of any Interim Period Employee Shares, Vested Oldford Share Options, phantom equity awards or Oldford Share Awards shall be calculated in accordance with clause 3, and, following such termination, Oldford and the Warranting Sellers shall procure that the holders of Interim Period Employee Shares, Oldford Share Options, phantom equity awards and Oldford Share Awards shall no longer have any right to purchase or acquire any Equity Securities of Oldford or otherwise have any rights under Interim Period Employee Shares, Oldford Share Options, phantom equity awards or Oldford Share Awards with respect thereto.

9.2

Promptly following the Effective Time, the Surviving Company shall implement an employee retention plan in the form of a “cash deferred bonus plan” for those persons who were employees or consultants of the Oldford Group Companies at the Effective Time, including those employees and consultants holding unvested Oldford Share Awards, unvested Oldford Share Options, unvested Interim Period Employees Shares and unvested phantom equity awards, in each case that were terminated (the “Retention Plan”). The Retention Plan shall provide for aggregate payments to such employees and consultants in an amount equal to $[*****], and which aggregate amount shall be allocated among such employees and consultants, and shall be payable on terms, and subject to conditions, as reasonably determined by the Surviving Company, taking into consideration the vesting schedule and other terms that had been applicable to such unvested Oldford Share Awards, unvested Oldford Share Options, unvested Interim Period Employees Shares and unvested phantom equity awards that were terminated.

10.

FINANCING.

10.1

Each of Buyer and its Affiliates shall use its reasonable endeavours to take, or cause to be taken, all actions necessary to consummate the Financing on the terms and conditions described in the Commitment Documents, including using its reasonable endeavours with respect to (a) maintaining in effect the Commitment Documents; (b) negotiating definitive agreements with respect to the Financing (the “Definitive Agreements”) consistent with the terms and conditions contained in the Commitment Documents or, if available, on other terms that are acceptable to Buyer and would not adversely affect the ability of Buyer to consummate the Contemplated Transactions; and (c) satisfying on a timely basis all conditions applicable to Buyer and its Affiliates to obtaining the Financing that are within the Buyer’s and its Affiliates’ control. Notwithstanding anything contained in this Deed or otherwise, Buyer and its Affiliates shall have the right from time to time to amend, restate, replace, supplement or otherwise modify, or waive any of its rights under, any of the Commitment Documents and/or substitute other debt or equity financing for all or any portion of the Financing from the same and/or alternative financing sources so long as: (A) Buyer has obtained the prior written consent of the Sellers’ Representative to any change in identity of the financing sources if the replacement financing source is not an internationally recognized and reputable financial institution (such consent not to be unreasonably withheld, conditioned or delayed), and (B) after giving effect to any such amendment, restatement, replacement, supplement or other modification, waiver or substitution, the proceeds from the Financing or any such modified financing, together with the cash or cash equivalents otherwise available to Buyer and its Affiliates, will provide Buyer at the Completion Date with sufficient funds to consummate in full its obligations under this Deed when due. In addition, in the event that any of the Commitment Letters are terminated or become ineffective or any portion of the Financing becomes unavailable, Buyer shall (i) promptly notify the Sellers’ Representative in accordance with clause 10.2 of such event and (ii) use commercially reasonable endeavours to obtain alternative financing from the same or other sources (in an amount that will provide Buyer at the Completion Date with sufficient funds (together with cash and cash equivalents otherwise available to Buyer and its Affiliates) to consummate in full its obligations under this Deed when due), provided, that the identity of the alternative financing sources (if such alternative financing source is not an internationally recognized and reputable financial institution) shall be approved in advance and in writing by the Sellers’ Representative (such approval not to be unreasonably withheld, conditioned or delayed). Upon any amendment, restatement, supplement, modification or replacement of any of the Commitment Documents as contemplated under this clause 10.1 (each, an “Alternative Financing”), the terms “Financing Commitments”, “Commitment Letters”, “Financing” and “Commitment Documents” shall mean the Financing Commitments, Commitment Letters, Financing and Commitment Documents, as the case may be, as so amended, restated, supplemented, modified or replaced by such Alternative Financing. Buyer shall, at all times during the Interim Period, use its reasonable endeavours to diligently pursue the obtaining of the Financing and/or any Alternative Financing in a manner which will enable it to consummate in full its obligations under this Deed when due. Buyer shall provide Sellers’ Representative with copies of the Commitment Documents in respect of any Alternative Financing promptly following the execution thereof by Buyer and the other parties thereto.

10.2

Buyer shall provide the Sellers’ Representative with prompt written notice of any material event relating to the Financing (including any event set forth in clause 10.1 or any other event that may prevent or delay the obtaining of the Financing or the consummation of the Contemplated Transactions); provided, however, that in no event will Buyer or any of its Affiliates be under any obligation to disclose any information pursuant to this clause 10.2 that is subject to attorney-client or similar privilege if Buyer and its Affiliates shall have used their reasonable endeavours to disclose such information in a way that would not waive such privilege. Buyer shall keep Sellers’ Representative reasonably informed on a current basis of the status of its endeavours to consummate the Financing.

10.3	Prior to Completion, the Warranting Sellers and Oldford shall, and Oldford shall cause the Oldford Group Companies to, provide, and use their reasonable endeavours to have their Representatives cooperate with Buyer and its Representatives in connection with the

arrangements by Buyer to obtain the Financing, as may be reasonably requested by Buyer (provided that such requested cooperation does not unreasonably interfere with the ongoing operations of the Oldford Group Companies or unreasonably interfere with or hinder or delay in any material respect the performance by the Warranting Sellers or the Oldford Group Companies of their other respective obligations hereunder), including:

(e)

furnishing Buyer and its Financing Sources, subject to appropriate confidentiality restrictions, with financial and other pertinent information regarding the Oldford Group Companies as may be reasonably requested by Buyer, including the report of Oldford’s independent auditor (Haines Watts London LLP), and requesting the consent of such audit firms to the use of such reports in accordance with normal custom and practice and to request that such audit firms provide customary comfort letters to the underwriters, initial purchasers or placement agents, as applicable, in connection with the Financing;

(f)

providing reasonable assistance to Buyer and its Financing Sources in the preparation of (i) one or more confidential information memoranda, prospectuses, offering documents, bank information memoranda or other marketing and syndication materials (including public and private versions thereof), (ii) materials for rating agency presentations and (iii) documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations; provided the Warranting Sellers and Oldford shall be permitted a reasonable period to comment on those portions of the confidential information memoranda circulated to potential financing sources that contain or are based upon any such non-public or other Confidential Information of Oldford;

(g)

providing information reasonably required in connection with Buyer’s preparation of and entering into the Definitive Agreements; provided that no obligation of any Oldford Group Company under any such agreements or amendments thereof shall be effective until and subject to Completion;

(h)

cooperating with Buyer in connection with applications to obtain such Consents which will be necessary in connection with the Financing, including approval of the TSX;

(i)

providing direct contact between (i) senior management and advisors, including auditors of Oldford and (ii) the Financing Sources, as applicable, and/or Buyer’s auditors, in connection with the Financing, in each case, to the extent required for the Financing and at reasonable times during normal business hours and upon reasonable advance notice;

(j)

participating in meetings, presentations, road shows, drafting sessions, sessions with rating agencies and other syndication activities, and due diligence sessions at reasonable times and upon reasonable advance notice so long as such meetings do not disrupt the management and operation of the Oldford Group Companies in Oldford’s reasonable discretion;

(k)

cooperating with the marketing endeavours of Buyer and its Financing Sources for the Financing;

(l)

permitting Buyer’s reasonable use of the Oldford Group Companies’ names and logos for syndication and underwriting, as applicable, of the Financing, subject to Oldford’s prior approval with respect to such use (which approval shall not be unreasonably withheld, conditioned or delayed); provided, however, that neither Sellers nor Oldford will, nor will

any Oldford Group Company prior to the Completion Date, be required to pay any commitment or other similar fee or incur any other Liability in connection with the Financing and that Buyer and its Affiliates shall not hold themselves as owners of the Business or any of the Oldford Group Companies prior to Completion;

(m)

using its reasonable endeavours to ensure that the Financing Sources benefit materially from the existing lending and banking relationships of the Oldford Group Companies and that the Financing Sources have the benefit of “clear market” provisions in the Commitment Letters relating to the Oldford Group Companies;

(n)

causing each Oldford Group Company to reasonably assist Buyer’s legal counsel in delivering customary legal opinions in respect of corporate matters; and

(o)

seeking to arrange for customary payoff letters, lien terminations and instruments of discharge to be delivered at Completion providing for the payoff, discharge and termination on the Completion Date of all indebtedness contemplated by the Commitment Letters to be paid off, discharged and terminated at Completion, if any, using its reasonable efforts to permit any cash and cash equivalents of the Oldford Group Companies (which is not distributed pursuant to the terms of part 2.2.1(a) above) to be made available to Buyer at the Completion Date, and cooperating reasonably with the Financing Sources’ due diligence and with their efforts to obtain guarantees from the Oldford Group Companies and obtain and perfect security interests in the assets of the Oldford Group Companies intended to constitute collateral securing such Financing;

provided, in each case, that none of the Warranting Sellers or the Oldford Group Companies shall be required to enter into any agreement or deliver any guaranty, mortgage, collateral, pledge, Encumbrance, filing, blocked account control agreement, certificate, document or other instrument (except the authorisation letter delivered pursuant to the foregoing clause (a)), in each case the effectiveness of which is not contingent upon Completion.

10.4

The foregoing notwithstanding, (a) none of the Warranting Sellers, the Oldford Group Companies or any of their respective directors or officers shall be obligated to adopt resolutions or execute consents to approve or authorise the execution of the Financing prior to the Completion Date; (b) no obligation of the Warranting Sellers, the Oldford Group Companies or any of their respective Representatives under any certificate, document or instrument executed pursuant to the foregoing shall be effective until Completion; and (c) none of the Warranting Sellers, the Oldford Group Companies or any of their respective Representatives shall be required to (i) pay any commitment or other similar fee or incur any other cost, expense or Liability, in each case in connection with the Financing prior to Completion, (ii) take any actions to the extent such actions would unreasonably interfere with the ongoing business or operations of the Oldford Group Companies, or (iii) take any action that would conflict with or violate the Oldford Group Companies’ Organisational Documents or any Legal Requirements, or result in the contravention of, or that would reasonably be expected to result in a violation or breach of, or default under, any Contractual Obligation to which an Oldford Group Company is a party. Nothing contained in this clause 10 or otherwise shall require any Oldford Group Company, prior to Completion, to be an issuer or other obligor with respect to the Financing. Buyer shall, promptly upon request by the Sellers’ Representative, reimburse the Warranting Sellers, the Oldford Group Companies and any of their respective Representatives for all reasonable out-of-pocket costs incurred by them in connection with such cooperation and shall indemnify and hold harmless the Warranting Sellers, the Oldford Group Companies and any of their respective Representatives for and against any and all Losses

suffered or incurred by them in connection with the arrangement of the Financing, any action taken by them at the request of Buyer pursuant to clause 10.3 and any information utilised in connection therewith (other than information provided in writing by the Warranting Sellers, the Oldford Group Companies or any of their respective Representatives to the Buyer or its Affiliates hereunder or to a Financing Source specifically for use in connection therewith).

10.5

Prior to Completion, Buyer shall provide the Sellers’ Representative and its Representatives with drafts of any confidential information memoranda, prospectuses, offering documents, bank information memoranda, other marketing and syndication materials and rating agency presentations prepared by any person in connection with the Financing and shall use reasonable endeavours to allow the Sellers’ Representatives and its Representatives reasonable time to comment on such information memoranda, prospectuses, offering documents and other similar related documents and materials with respect to the Financing, the Contemplated Transactions, the Oldford Group Companies or the Warranting Sellers, in advance of their issuance, release or publication.

SCHEDULE 5

COMPLETION ARRANGEMENTS

Part 1

Deliveries by the Warranting Sellers and Oldford

At or prior to Completion, Sellers’ Representative and Oldford will deliver, or cause to be delivered, to Buyer:

1.	the Scheme of Merger, duly executed by Oldford, together with all materials required to be filed pursuant to Section 154(2) of the Companies Act;

2.	a receipt, or written confirmation of receipt for (a) the Completion Date Payment to Participating Equityholders (including the Deposit Amount) from the Paying Agent and (b) the Indemnity Escrow Amount from the Escrow Agent;

3.	a duly executed counterpart to the Indemnity Escrow Agreement;

4.	share transfer instruments for unconditional and irrevocable transfer, to a person designated in writing by Buyer no fewer than seven Business Days prior to Completion, of the shares of [***] that are held beneficially or of record by [***] for $100;

5.	share transfer instruments for unconditional and irrevocable transfer, to a person designated in writing by Buyer no fewer than seven Business Days prior to Completion, of the shares of [*****] for $100;

6.	resignations, effective as of the Effective Time, of the registered agent of Oldford;

7.	resignations, effective as of Completion, of all directors of the Oldford Group Companies (other than of any Dormant Entity, if such resignation cannot be effected in light of any Legal Requirement) and those officers of the Oldford Group Companies who are listed on Exhibit P;

8.	evidence, in form and substance reasonably satisfactory to Buyer, that the Oldford Stipulation Amount, as of the Completion Date, has been deposited by Oldford into the Oldford Stipulation Trust Account or directly to the U.S. government at Buyer’s direction;

evidence, in form and substance reasonably satisfactory to Buyer, that in accordance with Schedule 4, part 9, the Interim Period Employee Shares, Oldford Share Options and Oldford Share Awards shall have either been terminated, cashed out or exercised in full at or prior to Completion and that no person other than the Buyer shall have any right to purchase or acquire any Equity Securities of Oldford;

10.

evidence, in form and substance reasonably satisfactory to Buyer, that any Contractual Obligations of any kind giving a person the right to participate in or receive any payment under any phantom equity plan (or any other plan linked or related to equity) shall have been terminated, cancelled or exercised in full prior to Completion;

11.	one or more compact discs or hard drives (which shall be permanent and accessible, without the need of any password, with readily and commercially available software) containing, in electronic format, all Disclosure Documents posted to the Data Room;

12.	a certificate signed by the CEO of Oldford, certifying to the fulfilment of the Conditions specified in Schedule 3, part 2, paragraphs 2.1 and 2.2;

13.

a certificate signed by a director of Oldford certifying (a) that the resolutions of Oldford’s board of directors authorising the execution and delivery of the Transaction Documents to which Oldford is a party and the performance by Oldford of its obligations under the Transaction Documents including the consummation of the Contemplated Transactions, are in full force and effect and have not been revoked since the date of this Deed and (b) the Organisational Documents of Oldford;

14.	good standing certificates (or local law equivalents) if available and applicable from the applicable Relevant Authority for each of the Oldford Group Companies;

15.

the following will remain in the exclusive possession of the Oldford Group Companies: all minute books, stock ledgers, stock books, cancelled or unused stock certificates, corporate seals, books, records (including for all open Tax periods, any Tax Returns, records and worksheets relating to Taxes, as well as any Tax closing or settlement agreements and any Tax examinations, assessments or similar reports), files, personnel records, policy forms, stationery, Software, data, documents, assets and properties of the Oldford Group Companies to the extent that they are in the possession of any Warranting Seller or any of its Affiliates (other than the Oldford Group Companies);

16.

evidence of submission of irrevocable notices to the applicable banks, in a form reasonably satisfactory to Buyer, instructing such banks that as of the Completion Date Buyer’s designees (identified in writing to Oldford by Buyer at least seven Business Days before the Completion Date) have been added, and certain prior designees of the Oldford Group Companies who have been identified in writing to Oldford by Buyer at least seven Business Days before the Completion Date, have been removed as signatories with respect to each of the Oldford Group Companies’ bank accounts and that any powers of attorney in respect of such accounts have been replaced to name Buyer’s designees in lieu of such prior Oldford Group Company designees.

17.	the Senior Officer Agreements, duly executed and delivered by each of the persons listed on Exhibit E.

18.	the indemnity letters attached as Exhibit L hereto, duly executed and delivered by Oldford.

Part 2

Deliveries by Buyer

At or prior to Completion or the Effective Time (as applicable), Buyer will deliver:

1.	at the Effective Time, the Completion Date Payment to Participating Equityholders to the Paying Agent;

2.	the Indemnity Escrow Amount to the Escrow Agent;

3.	the Expense Fund Amount to the Expense Fund Agent;

4.	the Scheme of Merger, duly executed by Merger Sub;

5.	[reserved]

6.	a duly executed counterpart to the Indemnity Escrow Agreement;

7.	a certificate signed by the President of Buyer certifying to the fulfilment of the Conditions specified in Schedule 3, parts 3.1 and 3.2;

a certificate signed by the Secretary or a director of Buyer, Buyer Parent and Merger Sub certifying (a) that the resolutions of Buyer’s, Buyer Parent’s and Merger Sub’s respective boards of directors authorising the execution and delivery of the Transaction Documents to which they are parties and the performance by Buyer, Buyer Parent and Merger Sub of their respective obligations under the Transaction Documents including the consummation of the Contemplated Transactions, are in full force and effect and have not been revoked since the date of this Deed and (b) the Organisational Documents of Buyer, Buyer Parent and Merger Sub; and

10.	good standing certificates of Buyer, Buyer Parent and Merger Sub from the applicable Relevant Authority.

SCHEDULE 6

WARRANTIES

PART 1

WARRANTIES OF OLDFORD AND THE WARRANTING SELLERS

In order to induce Buyer to enter into and perform its obligations under this Deed and to consummate the Contemplated Transactions, Oldford and the Warranting Sellers hereby warrant to Buyer, severally and not jointly, as follows on the date of this Deed and on the Completion Date unless otherwise specifically set forth herein.

1.	CAPACITY AND AUTHORITY

1.1	Incorporation and existence

1.1.1

Oldford is a company limited by shares which was originally incorporated under the laws of the British Virgin Islands and which was redomiciled and continued under the laws of the Isle of Man on November 20, 2013, and is duly organised, validly existing and in good standing and has been in continuous existence since its incorporation.

1.1.2

Contained in the Data Room are true and complete copies of: (a) Oldford’s Organisational Documents; and (b) Oldford’s minute book, which contains records of all meetings held, and other actions taken by, its board of directors, each committee thereof and shareholders for the period commencing on January 1, 2011 and ending on the date of this Deed. The Buyer has received from Oldford a true and complete copy of Oldford’s share ledger.

1.2	Right, power, authority and action

1.2.1

Oldford has the corporate right, power and authority, and has taken all action necessary, to execute, deliver and exercise its rights and perform its obligations under each Transaction Document to which it is a party in connection with the Contemplated Transactions. No further corporate authorisation on the part of Oldford is necessary to authorise the execution and delivery of the Transaction Documents to which it is a party or the consummation of the Contemplated Transactions.

1.2.2

Oldford has all requisite corporate or other equivalent power and authority to own and operate its properties and carry on the Business as presently conducted.

1.3	Binding agreements

The obligations of Oldford under this Deed and each other Transaction Document to which it is a party constitute, and the obligations of Oldford under each document to be delivered by it at Completion, or following Completion, will, when delivered, constitute, binding obligations of Oldford, Enforceable against Oldford in accordance with their respective terms.

1.4	Code not applicable

Neither the City Code on Takeovers and Mergers nor any analogous code or regime in any jurisdiction (whether imposed by statute or otherwise) applies to offers for the Shares or to the obtaining or consolidation of control of any Oldford Group Company.

1.5	No brokers

Except for Houlihan Lokey (the fees of which are being paid by the Participating Equityholders), no person is entitled to receive a finder’s fee, success fee, investment banking fee, brokerage or other commission from any Oldford Group Company in connection with, or as a result of, the Contemplated Transactions or any Transaction Document or the transactions contemplated thereby.

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2.	SHARES AND SUBSIDIARY UNDERTAKINGS

2.1	The Shares

The authorised share capital of Oldford solely consists of 1,000,000,000 shares made up of 1,000,000,000 ordinary shares with a par value of $0.00005 per share. As of the date of this Deed, (a) 989,776,961 ordinary shares are allotted and issued and (b) 10,223,039 ordinary shares are available for issuance (of which 2,791,006 are reserved and subject to outstanding Oldford Share Options, 2,512,971 are reserved and subject to outstanding Oldford Share Awards, and 2,230,000 are reserved for issuance subject to other outstanding Contractual Obligations).

2.1.1

The Shares comprise the whole of Oldford’s allotted and issued share capital, and have been, and in the case of Shares underlying Oldford Share Awards, Oldford Share Options and the Interim Period Employee Shares when issued will be, validly allotted and issued and fully paid or credited as fully paid.

2.1.2

No Share was issued in violation of any purchase option, call option, right of first refusal or offer, pre-emptive right, subscription right or any similar right or other Contractual Obligation. Except for the Shares, and following issuance of any Interim Period Employee Shares or shares of Oldford’s capital underlying the Oldford Share Options or Oldford Share Awards, there are no Equity Securities or Debt of Oldford with voting rights on any matters on which shareholders of Oldford may vote.

2.1.3

Except as set forth in Section 2.1.3 of the Disclosure Schedule and for restrictions on the transfer of securities arising from the M&A of Association of Oldford, there is no Encumbrance over, affecting or in relation to any unissued shares in the capital of Oldford, or to the Knowledge of Oldford, over any of the Shares. Oldford has not received and is not aware of any claim by any person that he, she or it is entitled to an Encumbrance over, affecting or in relation to any unissued share capital of Oldford.

2.1.4

Other than the Interim Period Employee Shares and except as set forth in Section 2.1.4 of the Disclosure Letter and restrictions on the transfer of securities arising from Oldford’s M&A of Association, with respect to Oldford, there are no outstanding:

(a)

rights, plans, options, warrants, calls, awards, conversion rights, pre-emptive rights or any agreements, arrangements or commitments of any character (either firm or conditional) obligating Oldford to issue, deliver or sell, or cause to be issued, delivered or sold, any of its Equity Securities or any securities exchangeable or convertible into its Equity Securities;

(b)

Contractual Obligations or rights of any person to repurchase, redeem or otherwise acquire from Oldford any Equity Securities of Oldford;

(c)

share appreciation rights, “phantom” share rights and equity-based units or shares;

(d)

Equity Securities other than the Shares; or

(e)

pre-emptive rights, rights of first refusal, rights of first offer, rights of co-sale or tag-along rights, shareholder agreements or other rights, understandings, commitments or arrangements regarding the registration of shares, redemption of any Equity Securities of Oldford, or any other restrictions imposed by Oldford applicable to any Equity Securities of Oldford, in each case, to the extent that Oldford is a party to such Contractual Obligation.

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2.2	The Subsidiaries

2.2.1

Schedule 1, part 2(a) sets forth a true and complete list of each direct and indirect subsidiary of Oldford, except for the entities listed on Schedule 1, part 2(b) (the “Dormant Entities”) which no longer have any active business operations or conduct any activities other than, if applicable, those activities associated with liquidation, dissolution or winding-up (each, other than any Dormant Entity, a “Oldford Subsidiary” and, collectively, the “Oldford Subsidiaries”), and sets forth:

(a)

the type of legal entity, jurisdiction of incorporation or organisation and the official company number of each such Oldford Subsidiary;

(b)

the designation, par value and the number of authorised, issued and outstanding and reserved Equity Securities for each Oldford Subsidiary and the number and the percentage of each Oldford Subsidiary owned by Oldford or other Oldford Subsidiary;

(c)

its registered office and registered agent; and

(d)

the directors and officers for each Oldford Subsidiary.

2.2.2

Except as set forth on Schedule 1, part 2 or part 3, no Oldford Subsidiary holds any Equity Securities of any person (other than Equity Securities held as a financial investment, including investments in the unrestricted securities of publicly-traded persons or in any other unrestricted publicly-traded debt or securities) or has any subsidiaries. Each Oldford Subsidiary is a legal entity:

(a)

duly organised and validly existing and in good standing under the Laws of its jurisdiction of organisation; and

(b)

with all requisite corporate power and corporate authority to own and operate its properties and to carry on its business as presently conducted.

2.2.3

Contained in the Data Room are true and complete copies of (a) the Organisational Documents of each Oldford Subsidiary, (b) the share ledger of each Oldford Subsidiary and (c) the minute book of each Oldford Subsidiary, which contains records of all meetings held, and other actions to be taken by, its governing body (e.g., board of directors, board of managers, general partner, etc.), each committee thereof and such Oldford Subsidiary’s shareholders, in each case, which has been held or taken for the period commencing January 1, 2011 and ending on the date of this Deed.

2.2.4

Except as set forth in Section 2.2.4 of the Disclosure Letter, each allotted and issued share in the capital of each Oldford Subsidiary is legally and beneficially owned in its entirety by one or more other Oldford Group Companies, has been validly allotted and issued and is fully paid or credited as fully paid.

2.2.5

Except as set forth in Section 2.2.5 of the Disclosure Letter and restrictions on the transfer of securities arising from any Oldford Subsidiary’s M&A of Association, there is no Encumbrance over, affecting or in relation to any share or unissued share in the capital of an Oldford Subsidiary. Except as set forth in Schedule 2.2.5 of the Disclosure Letter, no Oldford Group Company has received any notice from any person claiming that such person is entitled to an Encumbrance over, affecting or in relation to any share or unissued share in the capital of an Oldford Subsidiary. For the elimination of doubt, except as set forth in Schedule 2.2.5 of the Disclosure Letter and restrictions on the transfer of securities arising from any Oldford Subsidiary’s M&A of Association, with respect to each Oldford Subsidiary, there are no outstanding:

(a)

rights, plans, options, warrants, calls, conversion rights, pre-emptive rights or any agreements, arrangements or commitments of any character (either firm or conditional) obligating any Oldford Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, any of its Equity Securities or any securities exchangeable for or convertible into its Equity Securities;

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(b)

Contractual Obligations or rights of any person to repurchase, redeem or otherwise acquire any Equity Securities of any Oldford Subsidiary;

(c)

share appreciation rights, “phantom” share rights and equity-based units or shares,

(d)

Equity Securities other than as set forth on Schedule 1, part 2; or

(e)

proxies, voting agreements, voting trusts, pre-emptive rights, rights of first refusal, rights of first offer, rights of co-sale or tag-along rights, shareholder agreements or other rights, understandings, commitments or arrangements regarding the voting, purchase, acquisition, registration of shares, redemption, transfer or disposition of any Equity Securities of any Oldford Subsidiary, or any other restrictions applicable to any Equity Securities of any Oldford Subsidiary.

2.2.6

(a) Schedule 1, part 3 sets forth a true and complete list of all Joint Ventures.

(b)

In addition, Section 2.2.6(b) of the Disclosure Letter sets forth each other person that is not a subsidiary of an Oldford Group Company, but in which an Oldford Group Company (i) owns, legally or beneficially, Equity Securities, or (ii) has the right to participate in or receive any payment based on the revenues or profits, excluding in case of (i) or (ii), (A) those Joint Ventures listed on Schedule 1, part 3 and (B) financial investments, including investments in the unrestricted securities of publicly-traded persons or in any other unrestricted publicly-traded debt or securities (each, an “Investment Entity”).

2.2.7

No Dormant Entity has any material assets or Liabilities. No Dormant Entity is operating any active business or conducting activities other than, if applicable, in connection with liquidating, winding up or dissolving itself.

2.3	Corporate matters

2.3.1

The statutory books (including all registers and minute books) of each Oldford Group Company have been properly kept and contain an accurate and complete record in all material respects of the matters which are required under applicable Law to be dealt with in those books and no notice or allegation that any of them is incorrect, or should be rectified, has been received by any Oldford Group Company.

2.3.2

Except as set forth in Section 2.3.2 of the Disclosure Letter, no Oldford Group Company has granted a power of attorney or other authority by which a person may enter into a material Contractual Obligation on behalf of such Oldford Group Company other than with respect to administrative, ministerial or clerical matters, or pursuant to the authority of an Employee, Consultant, officer or director in the Ordinary Course of Business.

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3.	ACCOUNTS

3.1	Accounts

3.1.1

The Accounts have been prepared and audited on a proper and consistent basis in accordance with applicable Laws and IFRS at the time they were audited.

3.1.2

No change in accounting policies, principles and practices has been made in preparing the Accounts for each of the three consecutive accounting reference periods ended on the Accounts Date, except as expressly stated in the Accounts for those years.

3.1.3

The Accounts show a true and fair view in all material respects of the assets, Liabilities and state of affairs of the Oldford Group Companies taken as a whole as at the Accounts Date and of the profits and losses of the Oldford Group Companies taken as a whole for the accounting reference periods identified in the Accounts.

3.1.4

Except as set forth in Section 3.1.4 of the Disclosure Letter, the Interim Accounts have been prepared on a proper and consistent basis in accordance with applicable Laws and IFRS.

3.1.5

The Interim Accounts show a true and fair view in all material respects of the assets, Liabilities and state of affairs of the Oldford Group Companies taken as a whole as at March 31, 2014 and of the profits and losses of the Oldford Group Companies taken as a whole for the accounting reference periods identified in the Interim Accounts.

3.2

Debts

3.2.1

The Oldford Group Companies have no Debt, except as set forth in Section 3.2.1 of the Disclosure Letter, as set forth in the Accounts or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4).

3.2.2

For each item of Debt, Section 3.2.2 of the Disclosure Letter sets forth the debtor, the principal and interest amount of the Debt outstanding as of the date of this Deed, the creditor, the maturity date and the collateral, if any, securing the Debt.

3.3	Guarantees

No Oldford Group Company has any Liability in respect of a Guarantee in an amount exceeding $1,000,000 other than as set forth in Section 3.3 of the Disclosure Letter or identified in the Accounts or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4).

3.4	No off-balance sheet transactions

No Oldford Group Company is a party to any joint venture, off-balance sheet partnership or any similar Contractual Obligation or arrangement (including any joint venture or Contractual Obligation relating to any transaction or relationship between or among any Oldford Group Company, on the one hand, and any unconsolidated Affiliate of the Oldford Group Companies, including any structured finance, special purpose or limited purpose entity or person, on the other hand) or any “off-balance sheet arrangements”, where the result, purpose or effect of such arrangement is to avoid disclosure of any material transaction involving, or material Liabilities of, any Oldford Group Company in the Accounts.

3.5	Undisclosed Liabilities

3.5.1

The Oldford Group Companies have no Liabilities except for:

(a)

Liabilities set forth on the face of the Accounts;

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(b)

Liabilities incurred in the Ordinary Course of Business since the Accounts Date;

(c)

Liabilities not required to be presented on a balance sheet prepared in accordance with IFRS;

(d)

Liabilities permitted to be incurred pursuant to Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4); and

(e)

Liabilities set forth in Section 3.5.1(d) of the Disclosure Letter.

4.	CHANGES SINCE THE ACCOUNTS DATE

4.1	General

Except set forth in Section 4.1 of the Disclosure Letter, since the Accounts Date and until the date of this Deed:

4.1.1

the Business has been operating in the Ordinary Course of Business; and

4.1.2

there has been no Material Adverse Effect, and no event, circumstance or condition has occurred or arisen that would reasonably be expected to have a Material Adverse Effect.

4.2	Specific

Since the Accounts Date, except as set forth in Section 4.2 of the Disclosure Letter or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4), no Oldford Group Company has:

4.2.1

amended its Organisational Documents or issued, sold, granted or otherwise disposed of any Equity Security of such Oldford Group Company;

4.2.2

become liable in respect of any Guarantee or incurred, assumed or otherwise become liable in respect of any Debt other than borrowings or Debt in the Ordinary Course of Business not involving more than $1,000,000 individually or $5,000,000 in the aggregate taking into account all Oldford Group Companies, or made any loans, advances or capital contributions or Investments in any person (other than intercompany loans and advances to employees in the Ordinary Course of Business) in an amount exceeding more than $50,000 individually or $350,000 in the aggregate or advances to players in the Ordinary Course of Business;

4.2.3

sold, leased, licenced, transferred or otherwise disposed of any Asset having a replacement cost or fair market value in excess of $1,000,000;

4.2.4

made, or committed to make, any capital expenditure that is not included in the 2014 Forecast in excess of $1,000,000 individually, or $2,000,000 in the aggregate taking into account all Oldford Group Companies, or deferred or failed to make any capital expenditure that was included in the 2014 Forecast that is in excess of $1,000,000 individually, or $2,000,000 in the aggregate taking into account all Oldford Group Companies;

4.2.5

permitted any of its Assets having a fair market or book value in excess of $500,000 to become subject to any Encumbrance other than a Permitted Encumbrance;

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4.2.6

declared, set aside or paid any distribution or dividend with respect to any Equity Security of such Oldford Group Company except as permitted by this Deed;

4.2.7

repurchased, redeemed or otherwise acquired any Equity Security of such Oldford Group Company other than the redemption of any Oldford Share Option, Oldford Share Award or Interim Period Employee Shares;

4.2.8

suffered a material loss, destruction or damage affecting the Business or any Asset having a replacement cost or fair market value in excess of $1,500,000;

4.2.9

cancelled, waived or released any Liability, right or claim in excess of $1,000,000, or write-down or write-off the value of any Asset in excess of $500,000 (or otherwise, except for write-downs and write-offs in the Ordinary Course of Business);

4.2.10

increased the compensation payable or paid, whether conditionally or otherwise, to any executive officer or director by more than $50,000, other than in the Ordinary Course of Business;

4.2.11

made any change in its methods of accounting or accounting practices (including with respect to reserves) or its policies, payment or credit practices or failed to pay any creditor any amount owed to such creditor when due or granted extensions of credit outside the Ordinary Course of Business;

4.2.12

made, changed, amended or revoked any Tax election, filed any material amendment to any Tax Return, elected or changed any method of accounting for Tax purposes, settled any Action in respect of Taxes or entered into a Contractual Obligation in respect of Taxes with any Tax Authority;

4.2.13

taken any action with respect to an Insolvency Event, other than with respect to Dormant Entities;

4.2.14

threatened, commenced or settled any Action where the damages sought are in excess of $2,000,000 in the aggregate taking into account all of the Oldford Group Companies; or

4.2.15

entered into any Contractual Obligation to do any of the things referred to elsewhere in this Section 4.2.

5.	COMPANY INTELLECTUAL PROPERTY RIGHTS

5.1	Particulars

Section 5.1 of the Disclosure Letter sets forth a true, correct and complete list, as of the date of this Deed, of:

5.1.1

all registrations and pending applications worldwide for any Patent Rights, Trademarks and Copyrights owned by any Oldford Group Company and, to the Knowledge of Oldford, owned by any Joint Venture (“Intellectual Property Registrations”), enumerating specifically the applicable filing or registration number, title, jurisdiction in which filing was made or from which registration issued, date of filing, date of issuance, and names of all current applicant(s) and registered owner(s), as applicable;

5.1.2

all material unregistered Trademarks; and

5.1.3

all Company Licenced Intellectual Property.

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5.2	Applications, registrations and renewals

5.2.1

All Company Owned Intellectual Property that depends on registration for its validity or enforceability has been duly registered or is the subject of an application for registration and all renewals and extensions have been made with respect thereto. To the Knowledge of Oldford, all assignments of Intellectual Property Registrations have been either (i) properly executed and recorded or (ii) commenced and pursued (or will be commenced and be pursued within reasonable time) with all reasonable diligence and there is no reason to expect that such assignments shall not be recorded in due course.

5.2.2

To the Knowledge of Oldford, and except as set forth in Section 5.2.2 of the Disclosure Letter, all Intellectual Property Registrations are subsisting, in full force and effect and valid and enforceable in each jurisdiction in which they have been registered (in the case of registered Company Owned Intellectual Property) and in each jurisdiction in which they are capable of subsisting (in the case of unregistered Company Owned Intellectual Property but excluding, however, applications for patents comprised within Patent Rights), and the issuance, extension, maintenance and other payments that are or will become due with respect thereto within 90 days after the date of this Deed have been paid. The Oldford Group Companies have performed all acts and have paid all renewal, maintenance and other fees and taxes required to maintain each and every Intellectual Property Registration in full force and effect.

5.2.3

The Intellectual Property disclosed in the Disclosure Letter constitutes all Intellectual Property susceptible to being scheduled and necessary for the conduct of the Business as currently conducted. Except as set forth in Section 5.2.3 of the Disclosure Letter, record ownership of all Intellectual Property Registrations is held in the name of an Oldford Group Company or a Joint Venture, as applicable.

5.3	Prosecution matters

To the Knowledge of Oldford, and except as set forth in Section 5.3 of the Disclosure Letter, there are no inventorship or ownership challenges, objections or opposition, re-examination, nullity, objections or interference proceedings or other challenges declared, commenced or provoked or threatened with respect to Intellectual Property Registrations. Each Oldford Group Company and, to the Knowledge of Oldford, each Joint Venture, has complied in all material respects with all of its obligations and duties to the respective patent, trademark and copyright offices, including the duties of candour and disclosure to any Relevant Authority, including the U.S. Patent and Trademark Office, with respect to all Intellectual Property Registrations consisting of applications filed by or on behalf of any Oldford Group Company. To the Knowledge of Oldford, no facts, circumstances or information exist affecting the patentability or enforceability of any Intellectual Property covered by any Intellectual Property Registrations.

5.4	Ownership

5.4.1

Each item of Company Intellectual Property is solely owned, or available for use (under a valid and subsisting Inbound IP Licence) by, the relevant Oldford Group Company or Joint Venture and the Completion of the Contemplated Transactions shall not, by itself, cause any change in the terms and conditions applying to such items as they were immediately prior to the Completion which could have a Material Adverse Effect. Except as set forth in Section 5.4.1(a) of the Disclosure Letter, an Oldford Group Company is the sole legal and beneficial owner of all right, title and interest in, to and under Company Owned Intellectual Property, free and clear of any Encumbrances other than Permitted Encumbrances. A true, complete and correct list of: (a) all Customer Offerings and (b) all Internal Systems that are material to the Business, taken as a whole, is set forth in Section 5.4.1(b) of the Disclosure Letter. No component of the Company Intellectual Property is subject to any outstanding judgment, Order or decree or settlement agreement that

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restricts in any manner the use or licencing of the Company Intellectual Property or the validity, registrability, scope, ownership of, use or enforceability of any component of the Company Intellectual Property.

5.4.2

The Company Intellectual Property comprises all the Intellectual Property used or necessary to conduct the Business as now conducted.

5.5	Protection measures

Each Oldford Group Company has taken all reasonable and necessary measures to maintain and protect each item of Company Owned Intellectual Property and to maintain in confidence all trade secrets and Confidential Information comprising a part thereof. Each Oldford Group Company has complied in all material respects with all contractual and Legal Requirements pertaining to information security and Confidential Information. No written complaint relating to an improper use or disclosure of, or a breach in the security of, any such information has been received by any Oldford Group Company. To the Knowledge of Oldford, and except as set forth in Section 5.5 of the Disclosure Letter, as of the date hereof, there has been no: (a) unauthorised disclosure of any material third party proprietary or Confidential Information in the possession, custody or control of any Oldford Group Company; or (b) material breach of any Oldford Group Company’s security procedures wherein Confidential Information has been disclosed to a third party. Each Oldford Group Company has undertaken all reasonable efforts to police in all material respects the quality, standards and specifications of all services sold, distributed or marketed under each of its Trademarks, and has enforced reasonably adequate quality measures to ensure that no Trademarks that it has licenced to others shall be deemed or held to be non-distinctive, invalid or abandoned.

5.6	Infringement

To the Knowledge of Oldford, and except as set forth in Section 5.6 of the Disclosure Letter, none of the Customer Offerings, or the exploitation thereof by any Oldford Group Company, or any other activity of any Oldford Group Company, or the operation of the Business as currently conducted, or the use of the Company Intellectual Property infringes, violates or misappropriates, or has infringed, or violated, or has constituted a misappropriation of, any Intellectual Property of any third party. To the Knowledge of Oldford, and except as set forth in Section 5.6 of the Disclosure Letter, none of the Internal Systems, or any Oldford Group Company’s past or current exploitation thereof, or any other activity of any Oldford Group Company infringes, violates or misappropriates, or has infringed or violated, or has constituted a misappropriation of, any Intellectual Property rights of any third party. Section 5.6 of the Disclosure Letter sets forth a true, correct and complete list of any written complaint, claim or notice, or threat of any of the foregoing (including any written notification that a licence under any Intellectual Property rights is or may be required), received since January 1, 2011 by any Oldford Group Company or, to the Knowledge of Oldford, a Joint Venture, alleging any such infringement, violation or misappropriation and any request or demand for indemnification or defence received by any Oldford Group Company from any reseller, distributor, customer, user or any other third party or person which may expose any Oldford Group Company to either (a) Losses in an amount exceeding $100,000 or (b) injunctive relief (“Material IP Claim”); and the Data Room contains copies of all such written Material IP Claims as well as any legal opinions, studies, market surveys and analyses relating to any such Material IP Claim. To the Knowledge of Oldford, any and all written Material IP Claims (including any written notification that a licence under any Intellectual Property rights is or may be acquired), received prior to January 1, 2011 by any Oldford Group Company or, to the Knowledge of Oldford, a Joint Venture received by any Oldford Group Company from any reseller, distributor, customer, user or any other third party have been satisfactorily resolved and are no longer pending.

5.7	Infringement of Oldford Group Company rights

Except as set forth in Section 5.7 of the Disclosure Letter, to the Knowledge of Oldford, no third party (including any current or former employee or consultant of any Oldford Group Company) is currently infringing, violating or misappropriating: (a) any of the Company

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Owned Intellectual Property or (b) any of the Company Licenced Intellectual Property which is exclusively licenced to an Oldford Group Company. As of the date of this Deed and except as set forth in Section 5.7 of the Disclosure Letter, no Oldford Group Company or Joint Venture has initiated or brought any Action against any person that remains pending and that alleges that such person is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, such Intellectual Property. To the Knowledge of Oldford, the Oldford Group Companies have the exclusive right to bring Actions against any person that is infringing, violating or misappropriating Company Owned Intellectual Property and to retain for themselves any damages recovered in any such Action. The Data Room contains all material correspondence, analyses, legal opinions, or written complaints, claims, notices or threats concerning the infringement, violation or misappropriation of any Company Owned Intellectual Property.

5.8	Licences

5.8.1

Outbound IP Licences. Section 5.8.1 of the Disclosure Letter sets forth a true, complete and correct list in all material respects of all Outbound IP Licences, other than form licences granted to customers in connection with the Customer Offerings in the Ordinary Course of Business, which forms are included in the Data Room. None of the Outbound IP Licences grants any exclusive rights to third parties to any of any Oldford Group Company’s Intellectual Property. To the Knowledge of Oldford, all Outbound IP Licences are valid and subsisting and none of the parties thereto has done, or omitted to do, anything which constitutes, or might constitute, a breach thereof; no notice to terminate has been given to any of the Oldford Group Companies or, to the Knowledge of Oldford, threatened; and no Outbound IP Licences will terminate, or be terminable, as a result of the Contemplated Transactions.

5.8.2

Inbound IP Licences. Section 5.8.2 of the Disclosure Letter sets forth a true, complete and correct list of all Inbound IP Licences that are material to or necessary for the operation of the Business as carried on at the date of this Deed. Except as specifically set forth in Section 5.8.2 of the Disclosure Letter, no third party Inventions, methods, services, materials, processes, Software or other Intellectual Property are included in or required to exploit the Customer Offerings or Internal Systems. To the Knowledge of Oldford, all Inbound IP Licences are valid and subsisting and to the Knowledge of Oldford, none of the parties thereto has done, or omitted to do, anything which constitutes, or might constitute a breach thereof; no notice to terminate has been given to any of the Oldford Group Companies or to the Knowledge of Oldford, threatened; and no such licence the termination of which is likely to have an adverse impact on the Business will terminate, or be terminable, as a result of the Contemplated Transactions.

5.9	Confidential Information and Know-How

5.9.1

The Oldford Group Companies are entitled, without restriction, except for restrictions imposed by applicable law or contractual restrictions in connection with Confidential Information that is received from third parties), to use all Confidential Information and Know-How required in connection with the Business (whether their own or a third party’s).

5.9.2

To the Knowledge of Oldford, no Oldford Group Company has, save in the Ordinary Course of Business, pursuant to a confidentiality agreement or to the extent the recipient thereof is obliged to keep information confidential under any Legal Requirement or professional privilege, disclosed, or permitted to be disclosed, or undertaken or arranged to disclose, to any person other than Buyer (or its professional advisers) any Confidential Information.

5.9.3

No additional information is required by Buyer (other than the retention of the applicable Employees of the Business) to enable it to take full benefit of the Know-How in order to carry on the Business.

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5.9.4

Except as set forth in Section 5.9.4 of the Disclosure Letter, the Know-How is adequately documented and recorded so as to enable Buyer to take full benefit of the Know-How without undue reliance or dependence on any particular Original Employee and/or Original Consultant.

5.9.5

Each Oldford Group Company has taken reasonable and customary measures and precautions necessary to protect and maintain the confidentiality of all Confidential Information and trade secrets in which any Oldford Group Company has any right, title or interest and otherwise to maintain and protect all such Confidential Information and trade secrets. Without limiting the generality of the foregoing, and except as set forth in Section 5.9.5 of the Disclosure Letter, all employees and independent contractors of any Oldford Group Company who are or were involved in, or who have contributed to, the creation or development of any trade secrets or other Company Owned Intellectual Property have executed and delivered to an Oldford Group Company an agreement requiring them to maintain the confidentiality of such trade secrets and any other Confidential Information or proprietary non-public Intellectual Property which assigns to such Oldford Group Company any and all Intellectual Property with respect thereto (to the extent assignable under applicable Law) and/or includes a waiver of any rights therein.

5.9.6

To the Knowledge of Oldford, and except as set forth in Section 5.9.6 of the Disclosure Letter, there has been no: (a) unauthorised disclosure of any material third party proprietary or Confidential Information in the possession, custody or control of any Oldford Group Company, or (b) material breach of any Oldford Group Company’s security procedures wherein Confidential Information has been disclosed to a third party.

6.	INFORMATION TECHNOLOGY AND E-COMMERCE

6.1	Computer Systems

6.1.1

Complete and accurate details in all material respects of all Computer Systems owned by any Oldford Group Company as of the date hereof are set out in Section 6.1.1 of the Disclosure Letter.

6.1.2

Except as set forth in Section 6.1.2 of the Disclosure Letter, one or more of the Oldford Group Companies is the sole legal and beneficial owner of such Computer Systems free from any Encumbrance other than Permitted Encumbrances.

6.1.3

Complete and accurate details in all material respects of all material Computer Systems used as of the date of this Deed, by, or on behalf of, but not owned by any Oldford Group Company, and which are required for the operation of the Business, are set out in Section 6.1.3 of the Disclosure Letter.

6.1.4

To the Knowledge of Oldford, no Oldford Group Company is using any Computer Systems that infringe any rights of any third party and no Oldford Group Company has received notice or has Knowledge of any actual or threatened claim that its use of or benefit from any of the Computer Systems is invalid or infringes any rights of any third party.

6.2	Computer Contracts

6.2.1

Complete and accurate details in all material respects of the material Computer Contracts as of the date of this Deed are set out in Section 6.2.1 of the Disclosure Letter.

6.2.2

One or more of the Oldford Group Companies (if not owned by the Oldford Group Companies) has all necessary rights and/or licences from the owner of the Computer Systems pursuant to a Computer Contract to use the Computer Systems in the manner in which such Computer Systems are used.

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6.2.3

To the Knowledge of Oldford, all the Computer Contracts are valid and subsisting and the Oldford Group Companies are in compliance, in all material respects, with the terms of all Computer Contracts. To the Knowledge of Oldford, none of the Computer Contracts has been the subject of any breach or default by any Oldford Group Companies or any other person, nor any event has occurred which, with notice or lapse of time, or both, would constitute a default or breach.

6.2.4

Except as set out in Section 6.2.4 of the Disclosure Letter, no material Computer Contract will become terminable as a result of the Contemplated Transactions.

6.3	Computer operation and maintenance

6.3.1

To the Knowledge of Oldford, the Computer Systems perform in accordance with their specifications and user manuals and do not contain any defect which may materially affect their performance.

6.3.2

The Computer Systems are the subject of, and have been satisfactorily maintained and supported and one or more of the Oldford Group Companies has the benefit of, appropriate maintenance and support, pursuant to warranty and/or maintenance agreements or arrangements which are sufficient in all material respects for the operation of the Business in the Ordinary Course of Business.

6.3.3

To the Knowledge of Oldford, and except as set forth in Section 6.3.3 of the Disclosure Letter:

(a)

the Computer Systems have not suffered any material failures, bugs or breakdowns at any time during the 12 month period ending on the date of this Deed; and

(b)

no part of the Computer Systems is infected by any computer viruses, worms, malware, Software bombs or similar items in a manner which has an adverse impact on the ability to conduct the Business in the Ordinary Course of Business.

6.3.4

The relevant Oldford Group Companies have made adequate provisions to backup electronically stored records, data and information required in the Ordinary Course of Business and for the operation of the Business and used by the relevant Oldford Group Companies and have made appropriate backup arrangements in relation to the Computer Systems.

6.3.5

Full details in all material respects of all websites or other Internet and/or e-commerce platforms currently operated by, or on behalf of, the Oldford Group Companies (whether or not directed at, or accessible by, the public) are set out in Section 6.3.5 of the Disclosure Letter. Additionally, all domain names that are owned or registered by, or on behalf of, the Oldford Group Companies are set out in Section 6.3.5 of the Disclosure Letter.

6.4	Resources

The Employees of the Oldford Group Companies include a sufficient number of technically competent and trained persons to ensure proper handling, operation and monitoring of the Computer Systems. One or more of the Oldford Group Companies owns, and is in possession and control of, copies of all the manuals, guides, instruction books and technical documents (including any corrections and updates) required to operate the Computer Systems effectively.

6.5	Security

The Oldford Group Companies have and follow a written policy for tracking material bugs, viruses, malware, errors and defects in their Customer Offerings of which they become

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aware, and maintain and keep current a computerised database for such purpose. To the Knowledge of Oldford, that written policy is adequate to properly protect such Software (and systems associated with any application services provided by the Oldford Group Companies utilising such Software) used by the Oldford Group Companies against viruses, malware, so-called “hackers” and “crackers”, denial-of-service attacks, and other threats to the integrity, availability or confidentiality thereof, and the Oldford Group Companies’ actual practices have consistently conformed to its written policy. To the extent known by the Oldford Group Companies, Section 6.5 of the Disclosure Letter sets forth a true, correct and complete list of any such material act or incident, and the status or resolution thereof, pertaining to any of the foregoing. The Oldford Group Companies have implemented any and all material security patches or material security upgrades that have been reasonably deemed required by the Oldford Group Companies. The Oldford Group Companies have taken all reasonable precautions to: (a) ensure the security of the Computer Systems and Customer Offerings and the confidentiality and integrity of all data stored in them; and (b) prevent the Computer Systems and Customer Offerings from being attacked by any computer virus or harmful code.

6.6	Breakdowns and interruptions

In the 12 months preceding the date of this Deed, there have not been any failures or breakdowns of any Computer System which have an adverse impact on the Business.

6.7	Source Code

No Oldford Group Company has licenced, distributed or disclosed, or knows of any distribution or disclosure by others (including its Employees and contractors) of, any Source Code comprised in the Company Intellectual Property to any person, except pursuant to the agreements listed in Section 6.7 of the Disclosure Letter, and the Oldford Group Companies have taken all reasonable physical and electronic security measures to prevent disclosure of such Source Code. To the Knowledge of Oldford, no event has occurred, and no circumstance or condition exists, that (with or without notice, lapse of time or both) will, or would reasonably be expected to, nor will the consummation of the transactions contemplated hereby, result in the disclosure or release of such Source Code by any of the Oldford Group Companies or escrow agent(s) or any other person to any third party.

6.8	Open Source Materials

Section 6.8 of the Disclosure Letter sets forth a true, correct and complete list in all material respects of all Open Source Materials that any Oldford Group Company has utilised until the date hereof in any way in the Computer Systems or the exploitation of Customer Offerings or Internal Systems and describes the manner in which such Open Source Materials have been utilised in the Customer Offerings, including whether and how the Open Source Materials have been modified and/or distributed by any Oldford Group Company, to the extent such modification and/or distribution might create an obligation that any Software that incorporates, is derived from or is distributed along with such Open Source Materials be (a) disclosed or distributed in Source Code form, (b) licenced for the purpose of making derivative works, or (c) redistributable at no charge. To the Knowledge of Oldford, no Oldford Group Company has used Open Source Materials in a manner that would create, or purport to create, an obligation in any Oldford Group Company that any Software that incorporates, is derived from or is distributed along with such Open Source Materials be (a) disclosed or distributed in Source Code form, (b) licenced for the purpose of making derivative works or (c) redistributable at no charge.

6.9	Authorship

To the Knowledge of Oldford, and except as set forth in Section 6.9 of the Disclosure Letter, all the Software and documentation comprising, incorporated in or bundled with the Customer Offerings or Internal Systems and which is required for the operation of the Business in the Ordinary Course of Business have been either: (a) designed, authored, tested and debugged by employees of the Oldford Group Companies within the scope of their employment or by consultants who have executed valid and binding agreements assigning all right, title and

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interest in such copyrightable materials to an Oldford Group Company, waiving their non-assignable rights (including moral and authors’ rights) in favour of such Oldford Group Company and its permitted assigns and licencees, and have no residual claim to such materials; or (b) lawfully licenced to the applicable Oldford Group Company.

6.10	Quality

To the Knowledge of Oldford, and except as set forth in Section 6.10 of the Disclosure Letter, the Customer Offerings and the Internal Systems are free from: (a) material defects, malfunctions or non-conformities in design, workmanship and materials; (b) any mechanisms or devices capable of transmitting to or disclosing to any other party any data, content or information stored in or processed by any component of the Customer Offerings and the Internal Systems; (c) any devices which are not under the control of Oldford that are capable of automatically or remotely stopping any component of the Customer Offerings and the Internal Systems from operating, (e.g., passwords, authorisation keys, node locks, locks, fuses, time bombs, time-outs, dongles or other functions, whether implemented by electronic, mechanical or other means); (d) content or information stored in or processed by any component of the Customer Offerings and the Internal Systems which may be altered, damaged or erased by a person outside the control of the person operating the computer on which the code is installed; (e) any computer instructions or code which alters, damages or erases any data; and (f) any “back doors” or “trap doors” which allow for application code access through the bypassing of any security features. To the Knowledge of Oldford, the Customer Offerings and the Internal Systems conform in all material respects to the written documentation and specifications therefor. To the Knowledge of Oldford, the Customer Offerings and the Internal Systems do not contain any disabling device, virus, worm, back door, Trojan horse or other disruptive or malicious code that is intended to materially impair their intended performance or which replicates, transmits or activates code outside the control of the person operating the computer on which the code is installed.

6.11	Support and funding

No Oldford Group Company or Joint Venture has sought, applied for or received any support, funding, resources or assistance from any federal, state, local or foreign governmental or quasi-governmental agency or other funding source (including any government, university, college, other educational institution, multi-national, bi-national or international organisation or research centre) in connection with the creation, development or exploitation of the Customer Offerings, the Internal Systems or any facilities or equipment used in connection therewith.

6.12	Computer records

To the Knowledge of Oldford, and except as set forth in Section 6.12 of the Disclosure Letter, none of the records, systems, data or information of the Oldford Group Companies is recorded, stored, maintained, operated or otherwise wholly or partly dependent on, or held or accessible by, any means (including an electronic, mechanical or photographic process, computerised or not) which is not under the exclusive ownership and direct control of the Oldford Group Companies.

7.	DATA PROTECTION

7.1	Compliance

Each Oldford Group Company has complied in all material respects, including any registration requirements, with all applicable data privacy Laws (including any data protection acts or other applicable data protection legislation) relating to data protection in any relevant jurisdiction in which it is incorporated or regulated (“Data Protection Legislation”).

7.2	Third party data processing

To the Knowledge of Oldford, data processing carried out by third parties on behalf of any Oldford Group Company is carried out by third parties providing sufficient guarantees in respect of the security measures and organisational measures governing the processing to be carried out and pursuant to written agreements with those third parties.

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7.3	No complaints, etc.

Except as set forth in Section 7.3 of the Disclosure Letter, none of the Oldford Group Companies has received any written notice, letter or complaint alleging any material breach or non-compliance by any of the Oldford Group Companies of the Data Protection Legislation from the relevant data protection authorities or from any third party which has necessitated a notification to the relevant data protection authorities, and to the Knowledge of Oldford, there is not any matter, event or circumstance that could give rise to such a notice, letter or complaint. No Oldford Group Company has received any enforcement notices, information notices or prohibition notices against it with respect to any Data Protection Legislation.

8.	OTHER ASSETS

8.1	Title and condition

8.1.1

Except as set forth in Section 8.1.1 of the Disclosure Letter or as specifically identified in the Accounts, each Oldford Group Company has sole and exclusive, good and marketable title to, or, in the case of property held under a lease, licence or other Contractual Obligation, a sole and exclusive, Enforceable leasehold interest in, or right to use under a lease, licence or otherwise, all of its properties, rights and assets which are required for the conduct of the Business, whether real or personal and whether tangible or intangible, including all Assets which are reflected in the Accounts or acquired after the Accounts Date (except for such Assets which have been sold or otherwise disposed of since the Accounts Date in the Ordinary Course of Business) (collectively, the “Assets”). Except as set forth in Section 8.1.1 of the Disclosure Letter or specifically identified in the Accounts, none of the Assets is subject to any Encumbrance other than Permitted Encumbrances.

8.1.2

The Assets comprise all the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, used or necessary to conduct the Business as now conducted.

8.1.3

Except as set forth in section 8.1.3 of the Disclosure Letter, to the Knowledge of Oldford, all the Assets: (a) are in good working order, operating condition and state of repair (reasonable wear and tear excepted); (b) have no material defects; and (c) are adequate and suitable for their present and intended use.

8.1.4

Except as set forth in Section 8.1.4 of the Disclosure Letter, no liquidator, receiver or other person is challenging the ownership by any Oldford Group Company of any of the Assets of such Oldford Group Company.

8.2	Debtors

Except as set forth in Section 8.2 of the Disclosure Letter, to the Knowledge of Oldford, all Accounts Receivable, unbilled invoices, costs in excess of billings, work in process and other amounts (each, a “Receivable”) reflected on the Accounts of Oldford and in its records and books of account since the Accounts Date have arisen in the Ordinary Course of Business and represent legal, valid, binding and, to the Knowledge of Oldford, Enforceable obligations of an Oldford Group Company.

9.	INSURANCE

9.1	Other insurance

To the Knowledge of Oldford, each Oldford Group Company is adequately insured against accident, damage, injury, third party loss, credit risk, loss of profits and all other risks, to the extent such risks are normally insured against (and at the coverage levels normally insured against) by companies carrying on a business similar to the Business.

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9.2	The Insurance Policies

9.2.1

Section 9.2.1 of the Disclosure Letter sets forth a true, correct and complete list of insurance policies as of the date of this Deed, including by which any of the Oldford Group Companies or their Assets, Original Employees, Original Consultants, officers, directors or the Business have been insured since January 1, 2013 (the “Insurance Policies”). The list includes for each Insurance Policy the type of policy, policy name, insurer and expiration date. Oldford has made available in the Data Room true and complete copies of all the Insurance Policies.

9.2.2

Section 9.2.2 of the Disclosure Letter describes any material “self-insurance” arrangements affecting the Oldford Group Companies.

9.2.3

Except as set forth in Section 9.2.3 of the Disclosure Letter, since January 1, 2011, no insurer:

(a)

has questioned, denied or disputed (or otherwise reserved its rights with respect to) the coverage of any claim pending under any Insurance Policy; or

(b)

has provided any notice of cancellation or any other indication and neither Oldford nor any Warranting Seller has any reason to believe that any insurer plans to cancel any Insurance Policy or materially raise the premiums or materially alter the coverage under any Insurance Policy.

9.2.4

All premiums which are due under the Insurance Policies have been paid.

10.	EMPLOYMENT AND CONSULTANTS

10.1

The Data Room contains a list of all Original Employees; the information contained therein is true, complete and accurate in all material respects, and such list includes each Original Employee’s name, position, engaging entity, workplace location, notice period, date of commencement of continuous employment, annual salary or hourly wage, latest annual and long-term bonus and whether such Original Employee is on leave of absence. The Data Room contains a list of all Original Consultants; the information contained therein is true, complete and accurate in all material respects, and such list includes each Original Consultant’s name, position, engaging entity, engagement location, engagement notice period, date of commencement of engagement and fee structure (including any bonus entitlement).

10.2

Except as set forth in Section 10.2 of the Disclosure Letter, the employment of each Employee is terminable by such Oldford Group Company without payment in lieu of notice, damages, severance or any other compensation (other than any compensation payable by applicable Legal Requirements, or as included on the list referred to in paragraph 10.1 above) on no more than three months’ prior notice at any time.

10.3	[Reserved]

10.4	Except as set forth in Section 10.4 of the Disclosure Letter, to the Knowledge of Oldford, no Material Employee:

10.4.1

has delivered written notice to any Oldford Group Company of his or her intention to terminate his or her employment with any Oldford Group Company, intends to terminate his or her employment with any Oldford Group Company or is under notice of dismissal; or

10.4.2

is a party to any non-competition agreement that is reasonably likely to affect the ability of such Material Employee to perform his or her duties as an employee of such Oldford Group Company.

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10.5	No Material Employee is unavailable as of the date of this Deed to perform work because of disability or other leave of more than 30 consecutive days.

10.6

No Oldford Group Company is a party to, or otherwise bound by, any Order relating to Employees or employment practices, other than Orders which apply generally to all employers or to all employers in a certain sector in a particular jurisdiction. The Oldford Group Companies are in material compliance with applicable Legal Requirements, Contractual Obligations and policies relating to employment, employment practices, wages, hours and terms and conditions of employment.

10.7

Copies of the Oldford Group Companies’ standard terms and conditions, staff handbooks and policies documents are included in the Data Room, and there are no other material terms which apply to Employees or Consultants (other than those included in their employment or consultancy contracts or as required by any applicable Legal Requirement).

10.8	Except as set forth in Section 10.8 of the Disclosure Letter, no Employee, former employee, Consultant or former consultant will be entitled to receive any payment, right or benefit as a result of, or in connection with, the Contemplated Transactions.

10.9	Outstanding offers

Except as set forth in Section 10.9 of the Disclosure Letter, no Oldford Group Company has made any outstanding offer, or agreed to employ or engage, any person whose basic salary or cash compensation is in excess of $300,000 per annum (or equivalent) who is not an Employee or Current Consultant.

10.10

Compliance

Except as set forth in Section 10.10 of the Disclosure Letter, each Oldford Group Company has complied in all material respects, with all of its obligations (including health and safety and immigration obligations) to, or in respect of, each Employee, Consultant and former employee or consultant of any Oldford Group Company arising out of, or in connection with, their terms and conditions of employment or consultancy, as applicable and/or under Legal Requirements applicable to such Employee, Consultant and former employee or former consultant, except where such non-compliance would not individually or in the aggregate have a Material Adverse Effect. Within the past 12 months preceding the date of this Deed, no Employee or former employee, or Consultant or former consultant, has died or been critically injured at work.

10.11

Records

Except as set forth in Section 10.11 of the Disclosure Letter, each Oldford Group Company has maintained adequate and accurate records in all material respects relating to the Employees (including records relating to employers’ liability insurance, data protection, working time legislation, national minimum wage, parental leave, paternity leave, adoption leave, sickness absence and evidence of entitlement to work in the applicable jurisdiction where such Employee may be domiciled).

10.12

Trade unions

10.12.1

To the Knowledge of Oldford, except as set forth in Section 10.12.1 of the Disclosure Letter, there are no:

(a)

recognition, procedural or other arrangements with trade unions which relate to any of the Employees nor are any of the Employees members of a trade union;

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(b)

outstanding applications for trade union recognition or derecognition relating to any of the Employees;

(c)

staff associations, works councils or similar employee bodies or employee representatives relating to any of the Employees;

(d)

collective agreements between any Oldford Group Company and any trade union, staff association or other body representing workers; or

(e)

labour troubles (including any work slow-down, lockout, stoppage, picketing or strike) pending or, to the Knowledge of Oldford, threatened.

10.12.2

No Oldford Group Company has received an employee request under the Information and Consultation of Employees Regulations 2004 or any request from any Employee for any staff association, works council or similar employee body, or any other similar request as applicable in any other jurisdiction where an Oldford Group Company has Employees.

10.13

Investigations

10.13.1

To the Knowledge of Oldford, except as set forth in Section 10.13.1 of the Disclosure Letter, there are no and, during the two years ending on the date of this Deed, there have not been any, material claims, disputes, enquiries or investigations by any Relevant Authority or relating to any Original Employee or any former employee of any Oldford Group Company (in their capacity as such) and/or any trade union or other representative (in respect of their relations with any Oldford Group Company).

10.13.2

To the Knowledge of Oldford, no Oldford Group Company’s employment policies or practices are currently being audited or investigated by any Relevant Authority and have not been audited or investigated within the two years prior to the date of this Deed.

10.14

Loans to Employees

Except as set forth in Section 10.14 of the Disclosure Letter or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4), there are no outstanding loans made by any Oldford Group Company to any Employee or former employee (other than advances for reimbursable expenses incurred in the Ordinary Course of Business).

10.15

Redundancies

No Oldford Group Company has dismissed 20 or more employees within a 90-day period during the 12 months ending on the date of this Deed, or taken any other action relating to the termination of Employees that would require the filing of a notice with a Relevant Authority.

11.	PENSIONS

11.1	Except as set forth in Section 11.1 of the Disclosure Letter, no Oldford Group Company has adopted or has a Liability or obligation to contribute or provide any other financial support to a Pension Scheme.

11.2	The Data Room includes copies of:

11.2.1

all trust deeds and rules of the Pension Schemes; and

11.2.2

all applicable explanatory booklets and material announcements relating to the Pension Scheme, which were furnished to the employees of the Oldford Group Companies.

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11.2.3

all agreements with any person for the provision of services relating to the Pension Schemes.

11.2.4

all insurance contracts relating to the Pension Schemes.

These documents contain details of all material benefits payable under the Pension Scheme.

11.3	Section 11.3 of the Disclosure Letter contains details of the rate at which contributions to the Pension Schemes are paid, the basis on which they are calculated and whether they are paid in advance or in arrears.

11.4	Except as reserved in the Accounts and in Section 11.4 of the Disclosure Letter, all amounts due to the Pension Schemes have been paid, and no Oldford Group Company has any unfunded Liability in respect of a Pension Scheme.

11.5	All death and disability benefits provided to any Employee pursuant to any Contractual Obligation are fully insured by an insurance policy.

11.6

To the Knowledge of Oldford (which, for purposes of this clause 11.6 and clauses 11.7 and 11.9 below, shall include Oldford’s knowledge after making reasonable inquiry of the trustees, or, if none, the provider of each Pension Scheme), (a) since January 1, 2013, nothing has happened which would, to a material extent, affect the level of funding of the Pension Schemes, (b) no assets have been withdrawn from any Pension Scheme (except to pay benefits), and (c) there is no dispute about the benefits payable under any Pension Scheme and there is no matter, event or circumstance which might reasonably likely give rise to any such dispute.

11.7

No Oldford Group Company nor, to the Knowledge of Oldford, the trustees of the Pension Schemes, have discriminated against, or in relation to, any Employee in providing retirement, death, disability or life assurance benefits on grounds of age, sex, disability, marital status, hours of work, fixed-term or temporary agency worker status, sexual orientation, religion or belief.

11.8	No Pension Scheme is a defined benefit pension scheme.

11.9	To the Knowledge of Oldford, the Pension Schemes have been operated in accordance with applicable Law in all material respects, and no Pension Scheme has received any written claim or written notice alleging that it has not complied with such applicable Law in all material respects.

12.	PROPERTY

12.1

No Oldford Group Company owns any real property or has a freehold interest in and to any real property except as set forth in Section 12.1 of the Disclosure Letter (the “Owned Real Property”). Except as set forth in Section 12.1 of the Disclosure Letter, the Owned Real Property is held free and clear of Encumbrances other than Permitted Encumbrances.

12.2

Section 12.2 of the Disclosure Letter describes each leasehold interest in real property leased, subleased, licenced by or with respect to which a right to use or occupy has been granted to or by any Oldford Group Company as of the date of this Deed (the “Leased Real Property” and, together with the Owned Real Property, the “Oldford Real Property”), and specifies the lessor(s) of such Leased Real Property, and identifies each lease or other Contractual Obligation under which such Leased Real Property is leased, used or occupied by an Oldford Group Company (the “Real Property Leases”), or in relation to which any Oldford Group Company has an interest or Liability (actual or contingent), including as guarantor.

12.3	To the Knowledge of Oldford and except as set forth in Section 12.3 of the Disclosure Letter, each Oldford Group Company that is a party to a Real Property Lease has complied, in all material respects, with the terms and conditions of such Real Property Lease.

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12.4

Except as set forth in Section 12.4 of the Disclosure Letter or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4)there are no written or, to the Knowledge of Oldford, oral subleases, licences, concessions, occupancy agreements or other Contractual Obligations granting to any other person the right of use or occupancy of the Oldford Real Property, and there is no person (other than an Oldford Group Company and/or any lessee(s) of the Oldford Real Property specifically identified in Section 12.2 of the Disclosure Letter) in possession of the Leased Real Property.

12.5

Contained in the Data Room are true, correct and complete copies of all the Real Property Leases and ownership documents with respect to the Owned Real Property, including all material documentation related thereto. Except as set forth in Section 12.5 of the Disclosure Letter, no Consents are required to be obtained with respect to Oldford Real Property (including under the Real Property Leases) in connection with the Contemplated Transactions, including from the landlord(s) thereunder.

12.6

All Permits necessary in connection with the present use and operation of, the Oldford Real Property and the lawful occupancy thereof, and that the lack of which is likely to have a material impact on the Business, have been issued by the appropriate Relevant Authorities. The Contemplated Transactions shall not, in and of themselves, result in any such Permit ceasing to be in full force and effect.

12.7	To the Knowledge of Oldford, except as set forth in Section 12.7 of the Disclosure Letter, no Oldford Group Company:

12.7.1

is in violation of any material Legal Requirement relating to the Oldford Real Property, including zoning restrictions and ordinances, building, life, access, safety, health and fire codes and ordinances affecting the Oldford Real Property;

12.7.2

has received notice of any eminent domain, condemnation or similar Action pending or, to the Knowledge of Oldford, threatened, or any Order relating thereto;

12.7.3

has received notice of any Taxes or assessments (other than ordinary real estate Taxes pending and not yet due and payable) against the Oldford Real Property or any contingencies existing under which any assessment for real estate Taxes is reasonably likely to be retroactively filed against the Oldford Real Property.

12.8	No Oldford Real Property is subject to the payment of any outgoings (except the usual rents, rates, utility charges and Taxes) in an aggregate amount exceeding $100,000 per annum.

13.	EHS MATTERS

13.1	Each Oldford Group Company has complied, and is in compliance with, all EHS Laws and EHS Permits, except where such non-compliance would not have a Material Adverse Effect.

14.

TAX

14.1	General

14.1.1

Except as set forth in Section 14.1.1 of the Disclosure Letter, all Tax Returns for material Taxes and any other necessary information which have, or should have, been submitted by the Oldford Group Companies to a Tax Authority for the purposes of Taxation have been made on a proper basis in accordance with applicable Taxation Statutes, were submitted within applicable time limits and were, at the time of such filing, accurate and complete in all material respects. None of the above is, or is likely to be, the subject of any dispute with any Tax Authority.

14.1.2

Except as set forth in Section 14.1.2 of the Disclosure Letter, all Taxation for which any of the Oldford Group Companies has been, or is, liable to account under applicable Taxation Statutes has been in all material respects duly paid (insofar as such Taxation ought to have been paid) by the due dates and no material penalties, fines, surcharges or interest has been incurred.

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14.1.3

Except as set forth in Section 14.1.3 of the Disclosure Letter, the Oldford Group Companies maintain complete and accurate records, invoices and other information in compliance in all material respects with applicable Taxation Statutes that enable the Tax Liabilities of the Oldford Group Companies to be calculated accurately in all material respects.

14.1.4

Except as set forth in Section 14.1.4 of the Disclosure Letter, all Taxation deductible or required to be withheld under any Taxation Statute, has, so far as it is required to be deducted or withheld, been deducted or withheld in all material respects from all payments made (or treated as made) by the Oldford Group Companies and has been duly and timely remitted to the appropriate Tax Authority. All amounts which have been so withheld and which are due to be paid to the relevant Tax Authority have been so paid.

14.1.5

Except as set out in Section 14.1.5 of the Disclosure Letter, none of the Oldford Group Companies has entered into a material concession, agreement, arrangement, waiver or extension with a Tax Authority which is in effect as of the date of this Deed.

14.1.6

Except as set out in Section 14.1.6 of the Disclosure Letter, there are no material instances in which Oldford Group Companies are liable to make to any person (including any Tax Authority) any payment in respect of any Liability to Taxation which is primarily or directly chargeable against, or attributable to, any other person (other than an Oldford Group Company).

14.1.7

The Accounts make sufficient provision or reserve in all material respects in accordance with generally accepted accounting principles for all Taxation for which the relevant Oldford Group Company is accountable at that date. Proper provision in all material respects has been made and shown in the Accounts for deferred taxation in accordance with generally accepted accounting principles.

14.1.8

Except as set out in Section 14.1.8 of the Disclosure Schedule: (i) there are no Actions pending against any Oldford Group Company in respect of Taxes; (ii) there are no matters under audit or appeal with any Tax Authority relating to Taxes; and (iii) to the Knowledge of Oldford, there are no Actions threatened against any Oldford Group Company in respect of Taxes and no event has occurred and no circumstances exist that might give rise to the foregoing.

14.1.9

None of the Oldford Group Companies: (i) is a party to any Tax allocation or sharing agreement; or (ii) except as set out in Section 14.1.6 of the Disclosure Letter, is or can become, after the Completion Date, liable for Taxes of another entity for taxable periods of the said entity beginning before or on the Completion Date, whether as an indemnitor or as a result of having acquired, or being considered to have acquired, property from a non-arm’s length person for a consideration the value of which is less than the fair market value of said property.

14.2	Capital losses

Details of all material capital losses available for use by the Oldford Group Companies as of the date of this Deed without any material restrictions are set out in Section 14.2 of the Disclosure Letter.

14.3	Depreciation reliefs

None of the Oldford Group Companies has owned at the Accounts Date any material asset which, if disposed of at the date of this Deed for consideration equal to its net book value as included in the Accounts, would give rise to any material clawback or material disallowance of depreciation relief actually claimed and received by such Oldford Group Company.

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14.4	Distributions and other payments

Except as set forth in Section 14.4 of the Disclosure Letter, no distribution has been made by any Oldford Group Company, except dividends shown in its Accounts and no Oldford Group Company is bound to make any such distribution, other as contemplated in Schedule 4, paragraph 2.2.1(a).

14.5	Loans and derivatives

Substantially all financing costs, including interest, discounts and premiums payable by the Oldford Group Companies in respect of any of their material loans and amounts payable by the Oldford Group Companies in respect of any derivatives contracts regarding which such Oldford Group Company has actually claimed a Tax deduction, are deductible in all material respects by the Oldford Group Companies in computing their profits, gains or losses for Taxation purposes.

14.6	Tax Groups and Fiscal Unities

14.6.1

Section 14.6.1 of the Disclosure Letter contains full particulars of:

(a)

all groups and consolidated groups for Taxation purposes and fiscal unities of which the Oldford Group Companies are, or have been, a member within the last three years preceding the date of this Deed;

(b)

every agreement relating to the use of Group Relief or allowance to which the Oldford Group Companies are, or have been, a party within the last three years preceding the date of this Deed; and

(c)

any material arrangements for the payment of group Tax Liabilities to which the Oldford Group Companies have ever been party.

14.6.2

All claims made by the Oldford Group Companies for Group Relief or allowance were valid in all material respects when made and have been allowed by way of relief from or allowance or credit against Taxation. All substantial arrangements entered into by the Oldford Group Companies in relation to groups and consolidated groups for Taxation purposes and fiscal unities were valid in all material respects when made. The Oldford Group Companies have met all material procedural and other requirements of all Taxation Statutes in respect of such claims, unities or groups.

14.6.3

Neither the execution nor Completion of this Deed, nor any other event occurring since the Accounts Date is likely to result in the clawback or disallowance of any Group Relief or allowance previously given, in a manner which is likely to have a Material Adverse Effect.

14.7	Intangible Assets and Intellectual Property

Section 14.7 of the Disclosure Letter sets out the amount of expenditure as of the date of this Deed on each of the intangible fixed assets (including goodwill and Intellectual Property) of the Oldford Group Companies and provides the basis on which any deduction or allowance relating to that expenditure has been taken into account in the Tax Returns or, in relation to an expenditure incurred since the Accounts Date, will be available to the Oldford Group Companies. No circumstances have arisen since the Accounts Date by reason of which that basis might change.

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14.8	Company residence and overseas interests

14.8.1

Except as set forth in Section 14.8.1 of the Disclosure Letter, no Oldford Group Company has or has had in the past seven years preceding the date of this Deed, a permanent establishment or a taxable presence outside of its jurisdiction of organization or incorporation.

14.8.2

Except as set forth in Section 14.8.2 of the Disclosure Letter, the Oldford Group Companies have, throughout the past seven years preceding the date of this Deed, only been resident in their jurisdiction of incorporation for Taxation purposes and have not, at any time in the past seven years preceding the date of this Deed, been treated as resident in any other jurisdiction for the purposes of any double Taxation arrangements.

14.8.3

Except as set forth in Section 14.8.3 of the Disclosure Letter, the Oldford Group Companies have not received any written claim in the past seven years preceding the date of this Deed that any of the Oldford Group Companies has or has had a permanent establishment or a taxable presence outside of its jurisdiction of incorporation.

14.8.4

Except as set forth in Section 14.8.4 of the Disclosure Letter, no request to file a Tax Return has ever been made by a Tax Authority in a jurisdiction in which any Oldford Group Company does not file such a Tax Return.

14.9	Transfer pricing

14.9.1

Section 14.9.1 of the Disclosure Letter sets out the transfer pricing studies commissioned by the Oldford Group Companies with respect to transactions or arrangements between Oldford Group Companies (“Transfer Pricing Studies”) for the past seven years preceding the date of this Deed. The Transfer Pricing Studies have been prepared in good faith on behalf of the Oldford Group Companies, and fairly reflect the good faith views of the relevant Oldford Group Company of the functions carried out by such Oldford Group Company during the periods to which they relate.

14.9.2

All transactions or arrangements made by the Oldford Group Companies have been made on arm’s length terms and the processes by which prices and terms have been determined have been sufficiently documented insofar as required under Taxation Statutes applicable to such Oldford Group Companies relating to transfer pricing. Except as set forth in Section 14.9.2 of the Disclosure Letter, no written notice, enquiry or adjustment has been made by any Tax Authority in connection with any such transactions or arrangements.

14.10

Anti-Avoidance

None of the Oldford Group Companies has been involved in any transaction or series of transactions one of the main purposes of which was the avoidance of Taxation.

14.11

Indirect Taxes

14.11.1

Section 14.11.1 of the Disclosure Letter sets forth the Indirect Tax Registrations of the Oldford Group Companies, the status of each for purposes of Indirect Tax (including as regards crediting or allowance for Indirect Tax paid or suffered thereby).

14.11.2

Section 14.11.2 of the Disclosure Letter sets out the prescribed Indirect Tax accounting periods of the Oldford Group Companies.

14.11.3

Section 14.11.3 of the Disclosure letter sets forth the Oldford Group Companies which are or have been, in the period of three years ending with the Completion Date, a member of a group for the purposes of Indirect Tax.

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14.11.4

Except as set out in Schedule 14.11.4 of the Disclosure Letter, none of the Oldford Group Companies have been denied full credit or allowance for any Indirect Tax paid or suffered by it.

14.11.5

For the purpose of this provision, an “Indirect Tax” is a Tax, such as a sales Tax or value-added Tax that is levied on goods or services rather than on persons.

14.12

Stamp Duties and Transfer Taxes

14.12.1

Any document that is necessary in proving the title of the Oldford Group Companies to any asset which is owned by an Oldford Group Company is duly stamped for stamp duty purposes or has had the transfer or registration Tax due in respect of it paid.

14.12.2

Neither entering into this Deed nor Completion will result in the withdrawal of any stamp duty or transfer or registration Tax relief granted on or before Completion which will affect any of the Oldford Group Companies.

15.	AGREEMENTS

15.1	Types of agreements

Except as set forth in Section 15.1 of the Disclosure Letter or as otherwise specifically permitted in Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4), no Oldford Group Company is bound by or a party to:

15.1.1

any Contractual Obligation (or group of related Contractual Obligations) for the purchase or sale of supplies, goods, products, equipment or other personal property, or for the furnishing or receipt of services, in each case, the performance of which provides for either annual payments to or by an Oldford Group Company in excess of $1,000,000, or aggregate payments during the term of the Contractual Obligation in excess of $2,000,000;

15.1.2

(a) any capital lease or (b) any other lease or other Contractual Obligation relating to any Asset providing for annual rental payments (excluding ancillary costs and expenses such as maintenance fees and/or utility bills) in excess of $250,000, or such aggregate rental payments during the remaining term of the Contractual Obligation in excess of $750,000, under which any Asset is held or used by an Oldford Group Company;

15.1.3

any Contractual Obligation that was entered into during the five year period preceding the date of this Deed and relating to the acquisition or disposition of any business (whether by merger, consolidation or other business combination, sale of securities, sale of assets or otherwise) for an amount exceeding $5,000,000;

15.1.4

any Contractual Obligation under which such Oldford Group Company is, or may become, obligated to pay any amount in respect of indemnification obligations, purchase price adjustment, contingent consideration or otherwise in connection with any (a) acquisition or disposition of assets or securities, (b) merger, consolidation or other business combination or (c) series or group of related transactions or events of the type specified in the immediately preceding clauses (a) and (b), in each case where the amount that may be received by such Oldford Group Company, or that may cause such Oldford Group Company to incur a Liability, exceeds $3,000,000;

15.1.5

any Contractual Obligation concerning or consisting of a Joint Venture;

15.1.6

any Contractual Obligation (or group of related Contractual Obligations) (a) under which such Oldford Group Company has created, incurred, assumed any Liability or provided any Guarantee in excess of $1,000,000, or (b) under which such

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Oldford Group Company has permitted any Asset which has a book value exceeding $500,000 to become subject to an Encumbrance other than Permitted Encumbrances;

15.1.7

any Contractual Obligation under which any other person has Guaranteed any Liability of such Oldford Group Company in an amount greater than $1,000,000;

15.1.8

any Contractual Obligation to purchase goods or services from a given person or persons or purchase a minimum amount of goods or services, in either case on an exclusive basis, in an amount exceeding $1,000,000 per item or $5,000,000 in the aggregate, from a given person or persons that cannot be terminated with three months’ prior notice without any Liability to such Oldford Group Company;

15.1.9

any Contractual Obligation with a Brand Ambassador;

15.1.10

any Contractual Obligation or Order involving any obligation on the part of such Oldford Group Company to refrain from competing with any person, from soliciting any employees, independent contractors or customers of any person or from conducting any other lawful commercial activity or any such Contractual Obligation for the Oldford Group Companies benefit from any other person(s), to the extent that any such obligation precludes such Oldford Group Company from conducting the Business as it is presently being conducted as of the date of this Deed;

15.1.11

any Contractual Obligation under which such Oldford Group Company has advanced or loaned an amount to any of its Affiliates or Employees or Consultants (other than travel allowances or reimbursement of other out of pocket expenses in the Ordinary Course of Business) in excess of $25,000 individually or $200,000 in the aggregate;

15.1.12

any settlement, stipulation, conciliation, Order or similar Contractual Obligation imposing an obligation on such Oldford Group Company after the date of this Deed in an amount exceeding $1,000,000;

15.1.13

any Contractual Obligation that limits the ability of an Oldford Group Company to incur any Debt or to Guarantee any Debt or other obligation of any person, or that limits the amount of any Debt that an Oldford Group Company may incur or Guarantee, or prohibits it from granting any Encumbrance other than Permitted Encumbrances on any Asset to secure any Debt incurred or Guaranteed; or

15.1.14

any Contractual Obligation not otherwise disclosed in Section 15,1 of the Disclosure Letter and pursuant to which such Oldford Group Company has an aggregate future Liability to any person in excess of $10,000,000, or entered into other than on arms-length terms.

The Contractual Obligations required to be listed in Section 15.1 of the Disclosure Letter and those referenced in (a) through (g) below, are each referred to herein as a “Material Contract” and are collectively referred to as the “Material Contracts”:

(a)

any Insurance Policy with an annual premium exceeding $100,000 or which insurance coverage exceeds $1,000,000;

(b)

all Contractual Obligations constituting Debt of any Oldford Group Company in an amount exceeding $500,000, that is not being paid, satisfied and discharged in full at Completion;

(c)

all employment agreements with Material Employees and Consultants whose annual cash compensation, or expected annual cash compensation, is greater than $250,000;

(d)

the Resorts Agreement;

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(e)

any Company Licenced Intellectual Property, other than limited, non-exclusive, royalty-free licenses of Trademarks granted in the Ordinary Course of Business that are incidental to promotional, marketing, informational or advertising activities;

(f)

the Real Property Leases with rental fees exceeding $250,000 per annum; and

(g)

all Related Party Agreements.

Contained in the Data Room are true, accurate and complete copies of each Material Contract (or to the extent no such copy exists, an accurate summary containing the material terms thereof), other than Material Contracts the Oldford Group Companies are permitted to enter into in accordance with Schedule 4 (including if consented to by Buyer pursuant to the terms of Schedule 4).

15.2	Enforceability

Each Material Contract is Enforceable against the applicable Oldford Group Company and, to the Knowledge of Oldford, each other person to such Contractual Obligation, and is in full force and effect. Except as set forth in Section 15.2 of the Disclosure Letter, the Completion of the Contemplated Transactions shall not, by itself, render any Material Contract un-Enforceable or not in full force and effect on identical terms following the Completion, in each case without any additional Liability to the applicable Oldford Group Company.

15.3	No breach

15.3.1

Except as set forth in Section 15.3.1 of the Disclosure Letter no Oldford Group Company, nor, to the Knowledge of Oldford, any party to any Material Contract is in material breach or violation of, or default under, or has repudiated any provision of, any Material Contract, nor to the Knowledge of Oldford, has any event occurred which, with the passage of time or the giving of notice, or both, would constitute a material breach or violation of, or default under, any Material Contract.

15.3.2

Except as set forth in Section 15.3.2 of the Disclosure Letter, no Oldford Group Company has received any written notice of any action to terminate, cancel, rescind or procure a judicial reformation thereof from any party to a Material Contract nor, to the Knowledge of Oldford, are there any circumstances or written communications which would lead to any of the foregoing.

15.4	Competition/antitrust

15.4.1

Since January 1, 2009 through the date of this Deed, no Oldford Group Company has received a notice from any Relevant Authority relating to competition and/or merger control Laws in any jurisdiction in which it operates.

15.4.2

For the purposes of determining the application of Part IX of the Competition Act (Canada), Oldford, together with its Affiliates (as defined in the Competition Act (Canada)), do not have assets in Canada with an aggregate book value that exceeds C$250 million, or aggregate annual gross revenues from sales in, from or into Canada that exceed C$350 million, in each case determined as required under the Competition Act (Canada) and the applicable regulations thereunder.

16.	TERMS OF TRADE AND BUSINESS

16.1	Section 16.1 of the Disclosure Letter sets forth a list of the 10 largest suppliers or vendors of the Oldford Group Companies (measured by the aggregate amount purchased by the Oldford Group Companies) for the 12 month period ended December 31, 2013 (each, a “Substantial Supplier”).

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16.2	Section 16.2 of the Disclosure Letter sets forth a list of the 25 highest gross revenue generating jurisdictions where the Oldford Group Companies operate as of the Accounts Date, and such list also sets forth, as of the Accounts Date, the gross revenue derived from each such jurisdiction.

16.3	To the Knowledge of Oldford, during the 12 month period ending on the date of this Deed, no Substantial Supplier has:

16.3.1

stopped, or indicated in writing an intention to stop, doing business with any Oldford Group Company; or

16.3.2

reduced, or indicated in writing an intention to reduce, substantially its business with any Oldford Group Company.

17.	EFFECT OF SALE

17.1

Except as set forth in Section 17.1 of the Disclosure Letter, the execution and delivery of, and the performance by Oldford of its obligations under, each Transaction Document and each document to be delivered by Oldford at Completion will not (a) conflict with or violate any Legal Requirement; (b) conflict with, or result in a breach of or default under the Organisational Documents of any Oldford Group Company; or (c) result in a breach of, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of any Material Contract.

17.2

Except as set forth in Section 17.2 of the Disclosure Letter and as set out in Schedule 3, no Consent or other action by, or in respect of, or notice or filing with, any Relevant Authority (including under any Gaming Laws) or other person is required for, or in connection with, the valid and lawful:

17.2.1

execution, delivery and performance by Oldford of the Transaction Documents to which it is a party;

17.2.2

consummation of the Contemplated Transactions; or

17.2.3

transfer of any Material Contract as a result of a change in Oldford’s ownership.

18.	ARRANGEMENTS BETWEEN THE OLDFORD GROUP COMPANIES AND AFFILIATES

18.1

Except for the matters disclosed in Section 18.1 of the Disclosure Letter, no Warranting Seller or, to the Knowledge of Oldford, any Affiliate of any Warranting Seller is, directly or indirectly, an officer, director, employee, consultant, competitor, creditor, debtor, customer, distributor, supplier or vendor of, or is a party to any Contractual Obligation with, any Oldford Group Company.

18.2	Except as set forth in Section 18.2 of the Disclosure Letter, no Warranting Seller or any Affiliate of any Warranting Seller owns or has any ownership interest in any Asset used in the Business.

18.3	Except as set forth in Section 18.3 of the Disclosure Letter, no officer, director, fellow or Material Employee of any Oldford Group Company or, to the Knowledge of Oldford, any of their Affiliates is a creditor, debtor, distributor, supplier or vendor to any Oldford Group Company.

The Contractual Obligations required to be listed in any of Sections 18.1, 18.2 or 18.3 of the Disclosure Letter are referred to as the “Related Party Agreements”.

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19.	BANK ACCOUNTS AND BORROWINGS

19.1	Bank accounts

Full details in all material respects of all bank accounts maintained by each Oldford Group Company as of the date of this Deed are contained in Section 19.1 of the Disclosure Letter. These details include in each case:

19.1.1

the name and address of the financial institution with which the account is kept and the number or identifying codes and nature of the account;

19.1.2

the names of all persons authorised to draw on any such account.

20.	LITIGATION

20.1	No Actions

20.1.1

Except as set forth in Section 20.1.1 of the Disclosure Letter, there is no Action to which any Oldford Group Company is a party (either as plaintiff, defendant, or respondent) or to which its Assets are subject pending or, to the Knowledge of Oldford, threatened, in each case where the amount claimed exceeds $2,000,000.

20.1.2

Except as set forth in Section 20.1.2 of the Disclosure Letter, there is no Action to which any Oldford Group Company is a party (either as plaintiff, defendant, or respondent) or to which its Assets are subject pending or, to the Knowledge of Oldford, threatened, which:

(a)

in any manner challenges or seeks the rescission of, or seeks to prevent, enjoin, alter or delay the consummation of, or otherwise relates to, any Transaction Document or the Contemplated Transactions;

(b)

seeks to enjoin, prohibit or otherwise preclude any Oldford Group Company from operating in any jurisdiction; or

(c)

may result in any change in the current equity ownership of Oldford.

20.2	No Orders

20.2.1

Except as set forth in Section 20.2.2 of the Disclosure Letter, there is no Order against any Oldford Group Company which remains unsatisfied or outstanding.

20.2.2

There is no Order outstanding against any Oldford Group Company that would reasonably be expected to adversely affect the ability of the Warranting Sellers, the Sellers’ Representative and/or Oldford from performing their respective obligations under any Transaction Document or to consummate the Contemplated Transactions.

20.2.3

Except as set forth in Section 20.2.3 of the Disclosure Letter, no Order:

(a)

restrains, prohibits or otherwise precludes any Oldford Group Company from taking any action or participating in any business; or

(b)

freezes any of the Assets of any Oldford Group Company.

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21.	COMPLIANCE WITH LAWS

21.1	Compliance by Oldford Group Companies

21.1.1

Except as set forth in Section 21.1.1 of the Disclosure Letter, each Oldford Group Company is in compliance with, and has complied, in all material respects, with Legal Requirements applicable to it.

21.1.2

Each Oldford Group Company listed in Section 21.1.2 of the Disclosure Letter has a valid Gaming Approval from the applicable Gaming Authority listed opposite its name in Section 21.1.2 of the Disclosure Letter, which allows it to carry on gaming activity in accordance with the terms of such Gaming Approval.

21.2	No investigations and enquiries

To the Knowledge of Oldford, except as set forth in Section 21.2 of the Disclosure Letter, there is no investigation, inquiry or review by, or on behalf of, any Relevant Authority in respect of any Oldford Group Company, Joint Venture or any of their respective businesses, assets, products or services pending, in existence or that has not been fully and finally resolved.

21.3	Unlawful payments

21.3.1

No Oldford Group Company, any Affiliate of an Oldford Group Company or any person for whose acts or defaults any Oldford Group Company may be vicariously or otherwise liable has:

(a)

made or received any unlawful contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment to any person (public or private), regardless of form, whether in money, property or services (i) to obtain favourable treatment in securing business, (ii) to pay for favourable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained or (iv) for any illegal purpose;

(b)

except as set forth in Section 21.3.1(b) of the Disclosure Letter, made (directly or indirectly) any contribution to a political activity that violates any Legal Requirement; or

(c)

engaged in any activity or made or received a payment which is prohibited pursuant to all applicable Laws dealing with bribery and corruption, including the UK Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt Practices Act of 1977.

21.3.2

No Warranting Seller or any Oldford Group Company has been involved in any of the following matters:

(a)

the disbursement or receipt of funds of the Oldford Group Companies outside the normal system of accountability;

(b)

the intentionally improper or inaccurate recording of payments and receipts on the books of an Oldford Group Company;

(c)

any other matters of a similar nature involving unlawful disbursements of assets of the Oldford Group Companies; or

(d)

the disbursement of funds, directly or indirectly, to any Sanctioned Person,

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21.4	Permits

21.4.1

Except as set forth in Section 21.4.1 of the Disclosure Letter, with respect to the jurisdictions listed in Section 21.1.2 of the Disclosure Letter, to the Knowledge of Oldford, no Permit is required for any Oldford Group Company or Joint Venture to operate or conduct its business (excluding Permits that are not material to the operation or conduct of such business).

21.4.2

Section 21.4.2 of the Disclosure Letter describes each material Permit that is held by any Oldford Group Company as of the date of this Deed, which is required to conduct the Business in the Ordinary Course of Business, together with the Relevant Authority or other person responsible for issuing such Permit, except for routine occupancy certificates related to the Oldford Real Property; it being understood that a Gaming Approval is a material Permit.

21.4.3

Section 21.4.3 sets forth a list of all Gaming Approvals held by, granted to or currently applied for by each Oldford Group Company and each of their respective officers, directors and key Employees, together with the jurisdiction, type of Permit (as applicable) and the Relevant Authority or other person responsible for issuing such Gaming Approval.

21.4.4

Except as set forth in Section 21.4.4 of the Disclosure Letter:

(a)

to the Knowledge of Oldford, the Gaming Approvals held by each Oldford Group Company and Joint Venture are valid and in full force and effect;

(b)

no Oldford Group Company or Joint Venture is in breach or violation in any material respect of, or default under, any material Permit or Gaming Approval held by it, and, to the Knowledge of Oldford, no basis exists which, with notice or lapse of time, or both, would constitute any such breach, violation or default;

(c)

there is no Action and, to the Knowledge of Oldford, there is no investigation pending or threatened that is reasonably likely to result in the termination, revocation or suspension of any Gaming Approval currently held by an Oldford Group Company or the imposition of any fine, penalty or other sanctions for violation of any Gaming Laws relating to any Gaming Approval.

21.4.5

To the Knowledge of Oldford, except as set forth in Section 21.4.5 of the Disclosure Letter, none of the Oldford Group Companies, any of their respective officers, directors or Employees nor any Warranting Seller has been denied a Gaming Approval in any jurisdiction (it being clarified that a suspension of the review of an application for a Gaming Approval shall not be deemed as a denial of a Gaming Approval), withdrawn an application for a Gaming Approval in any jurisdiction or, with respect to a Gaming Approval then held by an Oldford Group Company or any Warranting Seller, had any such Gaming Approval suspended, withdrawn, revoked or limited in any manner.

21.5	Additional compliance Warranties

21.5.1

Except as set forth in Section 21.5.1 of the Disclosure Letter, all player deposits and player Liabilities in relation to cash balances of such players’ online accounts which are held or owed by any Oldford Group Company, are retained in segregated accounts at internationally recognised financial institutions. No player deposits or player Liabilities are commingled with any Oldford Group Company’s general operating funds or other Cash.

21.5.2

To the Knowledge of Oldford, no person who has been formally and irrevocably found unsuitable by a Gaming Authority:

(a)

holds a direct, indirect or beneficial interest in Oldford or any of its Affiliates;

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(b)

serves as a director, officer, manager, Employee or agent of Oldford, any subsidiary of Oldford or any of Oldford’s Affiliates; or

(c)

has the power or authority to act on behalf of Oldford, any subsidiary of Oldford or any of Oldford’s Affiliates in a representative capacity.

21.5.3

The Warranting Sellers and the Oldford Group Companies, and, to the Knowledge of Oldford, all parties to the Oldford Stipulation, are in compliance with the Oldford Stipulation, and have performed all of their respective obligations under the Oldford Stipulation, including having paid all amounts due under the Oldford Stipulation on a timely basis. Other than the payment of the Oldford Stipulation Amount, neither the Warranting Sellers nor any Oldford Group Company is required to make any payments under the Oldford Stipulation.

21.5.4

Except as set forth in Section 21.5.4 of the Disclosure Letter, other than with respect to Dormant Entities, no Insolvency Event has occurred with respect to (a) any Warranting Seller or any Oldford Group Company; or (b) any Joint Venture or partnership in which any Warranting Seller or any Oldford Group Company was a general partner at or within two years before the date of this Deed.

21.5.5

Except as set forth in Section 21.5.5 of the Disclosure Letter, no Oldford Group Company (a) has been convicted in a criminal Action since January 1, 2009; (b) has not been a named defendant in a pending criminal Action since January 1, 2009; and (c) to the Knowledge of Oldford, is the target of a pending criminal Action or investigation.

21.5.6

[INTENTIONALLY DELETED].

21.5.7

No Oldford Group Company has been found by a Relevant Authority in a civil action or by the UK Financial Policy Committee or the United States Securities and Exchange Commission to have violated any securities Law, which judgment in such civil action or finding by such Relevant Authority has not been subsequently reversed, suspended or vacated.

21.5.8

No Oldford Group Company is any of the following (each such person, a “Sanctioned Person”): (a) a person with which Buyer is prohibited from dealing or otherwise engaging in any transaction by any Legal Requirements relating to terrorism, national security, embargoes or similar sanctions; (b) a person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 or the regulations promulgated or administered by the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”); (c) a person that is named, or a person that is owned or controlled by, or acting for or on the behalf of, any person that is named, on the most current list of “Specially Designated Nationals and Blocked Persons” published by OFAC, or (d) a person publicly identified as prohibited from doing business with the United States of America under the International Emergency Economic Powers Act, the Trading with the Enemy Act (50 U.S.C. § 1 et seq., as amended) or any other relevant Law.

22.	DISCLOSURE

22.1	Disclosure Documents

Oldford has used its best endeavours to file the Disclosure Documents in the section of the Data Room to which Oldford believed in good faith they most clearly relate, and has acted in good faith in organising and scheduling the contents of the Data Room. The Warranty set out in this section 22.1, shall not derogate from the provisions of clause 7.2.

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PART 2 WARRANTIES OF THE WARRANTING SELLERS

In order to induce Buyer to enter into and perform its obligations under this Deed and to consummate the Contemplated Transactions, each Warranting Seller hereby warrants, solely with respect to itself, himself or herself, as follows on the date of this Deed and on the Completion Date unless otherwise specifically set forth herein:

2.1	To the extent such Warranting Seller is not an individual, it is a legal entity duly organised, validly existing and in good standing in the jurisdiction in which it was organised or incorporated.

2.2

Such Warranting Seller has the right, power and authority, and has taken all action necessary, to execute, deliver and exercise its or his rights and perform its or his obligations under this Deed and each other Transaction Document to be delivered by such Warranting Seller. No further authorisation on the part of such Warranting Seller is necessary to authorise the execution and delivery of this Deed or the consummation of the Contemplated Transactions.

2.3	[Reserved].

2.4	[Reserved].

2.5

The obligations of such Warranting Seller under each Transaction Document to which it is a party constitute, and the obligations of such Warranting Seller under each document to be delivered by such Warranting Seller at Completion will, when delivered, constitute binding obligations of such Warranting Seller and be Enforceable against such Warranting Seller in accordance with their respective terms.

2.6	[Reserved].

2.7	[Reserved].

2.8	There is no Action or Order of which such Warranting Seller is subject that in any manner challenges or seeks the rescission of, or seeks to prevent, enjoin, alter or delay the consummation of, or otherwise relates to, any Transaction Document or the Contemplated Transactions.

2.9

Such Warranting Seller (a) has not been convicted in a criminal Action (excluding traffic violations and other minor offenses) since January 1, 2009; (b) has not been a named defendant in a pending criminal Action within the last five years preceding the date of this Deed; and (c) is not aware that such Warranting Seller is the target of a pending criminal Action or investigation.

2.10	[INTENTIONALLY DELETED].

2.11

Except for Houlihan Lokey (the fees of which are being paid by the Participating Equityholders), no Warranting Seller is aware of any person who is entitled to receive a finder’s fee, success fee, investment banking fee, brokerage or other commission from any Oldford Group Company in connection with, or as a result of, the Contemplated Transactions or any Transaction Document.

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PART 3 WARRANTIES OF BUYER AND BUYER PARENT

In order to induce Oldford and the Warranting Sellers to enter into and perform their obligations under this Deed and to consummate the Contemplated Transactions, Buyer and Buyer Parent hereby warrant as follows on the date hereof and on the Completion Date.

3.1

Buyer is a limited liability company incorporated under the laws of the Netherlands, and is duly organised, validly existing and in good standing, and has been in continuous existence since organisation. Buyer Parent is a company incorporated under the laws of Quebec, Canada, and is duly organised, validly existing and in good standing, and has been in continuous existence since organisation.

3.2

Each of Buyer and Buyer Parent has the right, power and authority, and has taken all action necessary, to execute, deliver and exercise its rights and perform its obligations under each Transaction Document and each document to be delivered by Buyer or Buyer Parent, as applicable. No further authorisation on the part of Buyer or Buyer Parent is necessary to authorise the execution and delivery of the Transaction Documents or the consummation of the Contemplated Transactions.

3.3

The obligations of Buyer and Buyer Parent under each Transaction Document to which each of Buyer or Buyer Parent is a party constitute, and the obligations of each of Buyer and Buyer Parent under each document to be delivered by Buyer or Buyer Parent at Completion will, when delivered, constitute, binding obligations of Buyer and Buyer Parent, respectively, and be Enforceable against each of them in accordance with their respective terms.

3.4	The execution and delivery of, and the performance by each of Buyer and Buyer Parent of its obligations under, each Transaction Document and each document to be delivered by Buyer and Buyer Parent at Completion will not:

3.4.1

contravene or conflict with, or result in a breach of, or default under, any provision of its Organisational Documents;

3.4.2

violate any provision of any Legal Requirement applicable to Buyer or Buyer Parent; or

3.4.3

violate, breach or conflict with any Contractual Obligation to which Buyer or Buyer Parent is a party or by which Buyer or Buyer Parent is bound.

3.5	Except as required pursuant to Schedule 3, no waiver, Consent, authorisation, approval or other action by, or in respect of, or filing with, any Relevant Authority (including under any Gaming Laws) is required for, or in connection with, the valid and lawful:

3.5.1

execution, delivery and performance by Buyer and Buyer Parent of the Transaction Documents; or

3.5.2

the consummation of the Contemplated Transactions by Buyer and Buyer Parent.

3.6	Litigation

3.6.1

There is no Action pending or, to Buyer’s or Buyer Parent’s knowledge, threatened against Buyer or Buyer Parent which in any manner challenges or seeks the rescission of, or seeks to prevent, enjoin, alter or delay the consummation of, or otherwise relates to, this Deed or the Contemplated Transactions.

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3.6.2

There is no Order outstanding against Buyer or Buyer Parent that would reasonably be expected to materially adversely affect the ability of Buyer or Buyer Parent to perform their respective obligations under any Transaction Document or to consummate the Contemplated Transactions.

3.7	Funding

3.7.1

Buyer has delivered to Oldford complete and correct copies of the executed commitment letters (including the exhibits, annexes and schedules thereto, collectively, the “Commitment Letters”) from the parties thereto pursuant to which such parties have agreed, subject to the terms and conditions thereof, to provide debt or equity financing in the amounts set forth therein in connection with the Contemplated Transactions (the “Financing Commitments”). The financing contemplated pursuant to the Commitment Letters is hereinafter referred to collectively as the “Financing”.

3.7.2

As of the date hereof, there are no agreements, side letters or arrangements, other than the Commitment Letters and any fee letters or other collateral agreements referenced in the Commitment Letters (collectively, the “Fee Letters”; the Commitment Letters and the Fee Letters are collectively referred to as the “Commitment Documents”) to which any of the Buyer or its Affiliates is party relating to any of the Financing Commitments or that could adversely affect the availability of the Financing. Buyer has delivered to Oldford complete and correct copies of the executed Fee Letters, except that the fee amounts, pricing and other economic terms have been redacted.

3.7.3

Except as expressly set forth in the Commitment Documents, as of the date hereof there are no conditions precedent to the respective obligations of the Financing Sources to provide the Financing. Assuming the satisfaction of the conditions set forth in Schedule 3, part 1 and part 2, and subject to the terms and conditions set forth in the Commitment Documents, as at the date hereof, Buyer does not have any reason to believe that any of the conditions to the Financing will not be satisfied or that the Financing will not be consummated as contemplated by the Commitment Documents.

3.7.4

The Financing, when funded in accordance with the Commitment Documents, together with the cash and cash equivalents otherwise available to Buyer and its Affiliates, will provide Buyer with cash proceeds (after netting out original issue discount and similar premiums and charges after giving effect to the maximum amount of “flex” (including original issue “discount flex”)) on the Completion Date sufficient for Buyer to (a) pay the Merger Consideration, and (b) pay any fees and expenses of or payable by the Buyer or its Affiliates in connection with the Contemplated Transactions and the Financing on the Completion Date. Following the Completion Date Buyer shall have sufficient funds to meet in full and when due all of its other payment obligations pursuant to this Deed, including pursuant to clause 3.5 (Post-Completion Merger Consideration Adjustment) and clause 3.6 (Deferred Payment).

3.7.5.

As of the date hereof, the Commitment Documents are valid, binding and Enforceable obligations of the Buyer and its Affiliates, as applicable, and, to the Knowledge of Buyer, of each of the other parties thereto. To the Knowledge of Buyer, no event has occurred that, with or without notice, lapse of time, or both, would reasonably be expected to constitute a default or breach or a failure to satisfy a condition precedent on the part of the Buyer under the terms and conditions of the Commitment Documents. Buyer has paid and will continue to pay in full and when due any and all commitment fees or other fees required to be paid pursuant to the terms of the Commitment Documents. None of the Commitment Documents has been modified, amended or altered as of the date hereof, and, to the Knowledge of Buyer as of the date hereof, none of the respective commitments under any of the Commitment Documents has been withdrawn or rescinded in any respect.

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3.7.6

Notwithstanding anything to the contrary set out herein, in no event shall the receipt or availability of any funds or financing (including, for the avoidance of doubt, the Financing) by or to Buyer or any of its Affiliates or any other financing transaction be a Condition to any of Buyer’s obligations hereunder, including consummation of the Merger, Buyer’s obligation to pay the Merger Consideration and the other Contemplated Transactions.

3.8	Brokers

Except for Deutsche Bank and Canaccord Genuity, no person is entitled to receive a finder’s fee, investment banking fee, success fee, brokerage or commission from Buyer, Buyer Parent or any of their Affiliates in connection with any Transaction Document.

3.9	No Reliance

In connection with its decision to enter into this Deed, Buyer acknowledges, understands and agrees that (a) each of Buyer and Buyer Parent is a sophisticated party with such knowledge and experience in business matters (including, specifically, the business in which the Oldford Group Companies are engaged) and that it appreciates the merits and risks of consummating the Contemplated Transactions; (b) it is not relying upon any warranties and information (including, as may have been included in any information memorandum or management presentations, the Data Room, or statements or answers provided by or on behalf of the Oldford, the Warranting Sellers, or otherwise) other than that set forth explicitly in Schedule 6, part 1 and Schedule 6, part 2; (c) it is not relying upon any forward-looking projections, forecasts, budgets, financial data or any other forward-looking information (written or oral) with respect to the Oldford Group Companies and the Business, or prospects prepared by or furnished to it by or on behalf of Oldford (“Forward-Looking Data”); (d) it recognises that significant uncertainties are inherent in the Forward-Looking Data and that Oldford and the Warranting Sellers have not made any warranties, express or implied, relating to the Forward-Looking Data; (e) it takes full responsibility for making its own evaluation as to the adequacy and accuracy of the Forward-Looking Data; and (f) it has conducted a thorough financial, legal, tax and business due diligence review of the Oldford Group Companies before entering into this Deed.

3.10	Competition

For the purposes of determining the application of Part IX of the Competition Act (Canada), Buyer, together with its Affiliates (as defined in the Competition Act (Canada)), does not have assets in Canada with an aggregate book value that exceeds C$150 million, or aggregate annual gross revenues from sales in, from or into Canada that exceed C$50 million, in each case determined as required under the Competition Act (Canada) and the applicable regulations thereunder.

PART 4 WARRANTIES OF MERGER SUB

4.1	Merger Sub is a company limited by shares incorporated under the laws of the Isle of Man and is duly organised, validly existing and in good standing, and has been in continuous existence since organisation.

4.2	Merger Sub has the right, power and authority, and has taken all action necessary, to execute, deliver and exercise its rights and perform its obligations under each Transaction Document to which it is a party and each other document to be delivered by it. No further

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authorisation on the part of Merger Sub is necessary to authorise the execution and delivery of the Transaction Documents to which it is a party or the consummation of the Contemplated Transactions.

4.3

The obligations of Merger Sub under each Transaction Document to which it is a party constitute, and the obligations of Merger Sub under each document to be delivered by it at Completion will, when delivered, constitute, binding obligations of Merger Sub and be Enforceable against it in accordance with their respective terms.

4.4	The execution and delivery of, and the performance by Merger Sub of its obligations under, each Transaction Document to which it is a party and each other document to be delivered by it at Completion will not:

4.4.1

contravene or conflict with, or result in a breach of, or default under, any provision of its Organisational Documents;

4.4.2

violate any provision of any Legal Requirement applicable to Merger Sub; or

4.4.3

violate, breach or conflict with any Contractual Obligation to which Merger Sub is a party or by which it is bound.

4.5	Except as required pursuant to Schedule 3, no waiver, Consent, authorisation, approval or other action by, or in respect of, or filing with, any Relevant Authority (including under any Gaming Laws) is required for, or in connection with, the valid and lawful:

4.5.1

execution, delivery and performance by Merger Sub of the Transaction Documents to which it is a party; or

4.5.2

the consummation of the Contemplated Transactions by Merger Sub.

4.6	Litigation

4.6.1

There is no Action pending or, to Merger Sub’s knowledge, threatened against Merger Sub which in any manner challenges or seeks the rescission of, or seeks to prevent, enjoin, alter or delay the consummation of, or otherwise relates to, this Deed or the Contemplated Transactions.

4.6.2

There is no Order outstanding against Merger Sub that would reasonably be expected to materially adversely affect the ability of Merger Sub to perform its obligations under any Transaction Document to which it is a party or to consummate the Contemplated Transactions.

4.8	Brokers

Except for Deutsche Bank and Canaccord Genuity, no person is entitled to receive a finder’s fee, investment banking fee, success fee, brokerage or commission from Merger Sub or any of its Affiliates in connection with any Transaction Document.

4.9	No Reliance

In connection with its decision to enter into this Deed, Merger Sub acknowledges, understands and agrees that (a) Merger Sub is a sophisticated party with such knowledge and experience in business matters (including, specifically, the business in which the Oldford Group Companies are engaged) and that it appreciates the merits and risks of consummating the Contemplated Transactions; (b) it is not relying upon any representations and warranties (including, as may have been included in any information memorandum or management presentations, the Data Room, or statements or answers provided by or on behalf of the

135

Oldford, the Warranting Sellers, or otherwise) other than that set forth explicitly in Schedule 6, part 1 and Schedule 6, part 2; (c) it is not relying upon any Forward-Looking Data; (d) it recognises that significant uncertainties are inherent in the Forward-Looking Data and that Oldford and the Warranting Sellers have not made any representations or warranties, express or implied, relating to the Forward-Looking Data; (e) it takes full responsibility for making its own evaluation as to the adequacy and accuracy of the Forward-Looking Data; and (f) it has conducted a thorough financial, legal, tax and business due diligence review of the Oldford Group Companies before entering into this Deed.

4.10	Competition

For the purposes of determining the application of Part IX of the Competition Act (Canada), Merger Sub, together with its Affiliates (as defined in the Competition Act (Canada)), does not have assets in Canada with an aggregate book value that exceeds C$150 million, or aggregate annual gross revenues from sales in, from or into Canada that exceed C$50 million, in each case determined as required under the Competition Act (Canada) and the applicable regulations thereunder.

136

SCHEDULE 7

TAX COVENANTS

1.1 Tax Returns and Payments of Tax.

(a) The Sellers shall file (or cause to be filed) all Tax Returns of the Oldford Group Companies (including Tax Returns for estimated Taxes and other Taxes required to be paid in advance of a final Tax Return for a taxable period) that are required to be filed at any time on or before the Completion Date (taking into account any available extensions) and pay (or cause to be paid) all Taxes due at any time on or before the Completion Date: (i) with respect to those Tax Returns, or (ii) required to be paid without a Tax Return. Oldford shall prepare and file (or cause to be prepared and filed) all of those Tax Returns in accordance with past practices, and Oldford shall not take a position, make an election, adopt a method of accounting or seek a ruling from a Relevant Authority that is or would be inconsistent with positions taken, elections made or methods used in prior periods in connection with those Tax Returns unless otherwise first consented to by Buyer in writing. All of those Tax Returns shall be true, accurate and complete in all material respects when filed and shall be duly and timely filed, and all such Taxes shall be duly and timely paid to the extent they are due prior to Completion.

(b) Buyer shall file (or cause to be filed) all Tax Returns of the Oldford Group Companies that are required to be filed after the Completion Date (taking into account any available extensions) and, subject to clause 1.1(c)(ii) below, pay (or cause to be paid) all Taxes due after the Completion Date with respect to those Tax Returns or otherwise. All Tax Returns for any taxable period beginning on or before the Completion Date and ending after the Completion Date (a “Straddle Period”) shall be prepared in a manner consistent with past practice, except as required by applicable Law or unless otherwise first consented to by Sellers’ Representative in writing. With respect to Tax Returns of the Oldford Group Companies for Straddle Periods that are required to be filed by Buyer under this clause 1.1(b) after the Completion Date, the Warranting Sellers shall, prior to the Completion Date, commence preparing (or shall cause the appropriate Oldford Group Company to commence preparing) those Tax Returns within the time and substantially adhering to the schedule that the Oldford Group Company has historically followed in having those Tax Returns prepared and, after the Completion Date, the Warranting Sellers, in each case, shall cooperate with Buyer in the preparation of all of those Tax Returns and shall promptly provide to Buyer all information reasonably necessary or helpful to prepare and file those Tax Returns (to the extent they hold or have the ability to access any such information). All those Tax Returns shall be true, accurate and complete in all material respects when filed and shall be duly and timely filed, and all those Taxes shall be duly and timely paid.

(c) Straddle Periods. In the case of any Tax of any Oldford Group Company that is imposed with respect to any Straddle Period, Sellers shall be liable for the portion of the Tax that is allocable to the portion of the Straddle Period that ends on or before the Completion Date (the “Pre-Completion Tax Period”), and Buyer shall be liable for the portion of the Tax that is allocable to the portion of the Straddle Period that begins after the Completion Date (the “Post-Completion Tax Period”). The portion of any Tax for any Pre-Completion Tax Period shall be equal to:

(i) in the case of a Tax that is based upon or relates to gross or net income or receipts or imposed in respect of specific transactions, and any credits available with respect to any such Tax, the amount of Tax calculated on an interim closing of the books method as of (and including) the Completion Date (and the parties hereto shall elect to adopt that method if permitted by applicable Law); and

(ii) in the case any other type of Tax (including, for example, a Tax imposed on a periodic basis with respect to the assets of any Oldford Group Company or otherwise measured by the level of any item), the amount of Tax for the entire Straddle Period multiplied by a fraction the numerator of that is the number of days in the Straddle Period ending on the Completion Date and the denominator of which is the number of days in the entire Straddle Period.

(d) To the extent Buyer, on the one hand, or Sellers, on the other hand, are liable under this Deed for a Tax that is required to be paid or remitted by the other party (or Affiliate of that

137

other party) to a Relevant Authority or other person not a party to this Deed, including a Tax that arises out of or relates to a Tax Return that is required to be filed (or caused to be filed) by that other party (or Affiliate of that other party), or a Tax relating to periods ending prior to the Completion Date that are not reflected in the Accounts or the Final Completion Statement, then Buyer, on the one hand, or Seller, on the other hand, shall, subject to the provisions of clause 9 of the Deed, pay to the party that is required to pay or remit the Tax the amount of its Liability for the Tax (without duplication) as determined under this Deed within ten (10) Business Days after receiving a written request for the payment from the other person, which request shall include a calculation of the amount of the other party’s Liability. In all other cases, indemnification payments for Taxes shall be paid within five (5) Business Days after the date the matter to which the indemnity payment relates is settled, compromised or otherwise concluded in accordance with clauses 9.6 and 9.8 of the Deed. For the elimination of doubt and notwithstanding any reference in this schedule to clause 9 with respect to Tax Claims, no part of the Deed (other than clause 9) and no part of the Disclosure Letter or the Disclosure Documents shall operate to limit the liability of the Sellers in respect of Tax under this Schedule 7.

(e) If any Sellers Tax Indemnified Person or Buyer Tax Indemnified Person intends to seek indemnification pursuant to this Schedule 7, that party shall notify the other party in writing of the claim in accordance with the procedure set out in clauses 9.6 and 9.8, which shall apply for this purpose on a mutatis mutandis basis.

1.2 Transfer Taxes. All transfer, documentary, stamp, sales, use, value added, registration and other such Taxes (including all applicable real estate transfer or gains Taxes) and related fees (including any penalties, interest, additions to Tax and other additional amounts) (“Transfer Taxes”) incurred in connection with this Deed and the Contemplated Transactions shall be allocated 50% to Sellers and 50% to Buyer and paid in accordance with that allocation. The Warranting Sellers and Buyer will cooperate (and cause their Affiliates to cooperate) to timely and duly prepare and file any Tax Returns or other filings relating to Transfer Taxes, including any claim for exemption or exclusion from the application or imposition of any Transfer Taxes. This clause 1.2 shall be the only section of this Deed that applies to the allocation of Liability for a Transfer Tax.

1.3 Contests.

(a) Notice. The Sellers’ Representative and Buyer shall promptly notify the other party in writing upon receipt of a written notice of any current, pending or threatened Action that is reasonably likely to affect the Liabilities of the other party for any Tax or is reasonably likely to result in an indemnity payment for any Tax under the Deed (each, a “Tax Claim”), all pursuant to clauses 9.6 and 9.8 of the Deed, which shall apply mutatis mutandis (subject only to clause (b) below) to Tax Claims.

(b) Buyer Control. Buyer shall control all proceedings taken in connection with (A) any Tax Claim relating to Taxes of any Oldford Group Company for a Straddle Period, except to the extent the proceedings affect the amount of Taxes for which Sellers are liable under this Deed, in which case, (x) Buyer shall not settle or otherwise conclude any Tax Claim without prior written consent of Sellers’ Representative (which consent shall not be unreasonably withheld or delayed) and (y) Sellers’ Representative and counsel of their own choosing shall have the right to participate fully in all aspects of the prosecution or defense of the Tax Claim at the sole cost of Seller, and (B) all other Tax Claims not described above.

(c) For the elimination of doubt, and without derogating from the applicability of the provisions of clause 9, Buyer shall not be able to file any Notice of Claim pursuant to this Deed with respect to any Tax Claim (i) unless and until the relevant Oldford Group Company receives a notice of assessment from the relevant Tax Authority setting out a liquidated amount payable by the relevant Oldford Group Company, or (ii) following the Release Date.

138

1.4 Cooperation on Tax Matters.

(a) Between the Completion Date and the Release Date, the Warranting Sellers and Buyer shall, and shall cause their respective Affiliates to:

(i) furnish or cause to be furnished copies of all Tax Returns and other relevant information, records and documents relating to Taxes in the possession of that person relating to the Oldford Group Companies, or the business or assets of the Oldford Group Companies, as is reasonably necessary for the preparation and filing of any Tax Return or accounts, to respond to any Relevant Authority or for the preparation for, or defense against, any Tax Claim or other disputes regarding any Taxes or Tax Returns of the Oldford Group Companies for Pre-Completion Tax Periods or Straddle Periods or with respect to a Liability for which any party to this Deed or any Affiliate thereof may be liable (including reasonable access to employees, officers, consultants, counsel, auditors and other relevant professionals);

(ii) furnish the other party with copies of all correspondence received from any Relevant Authority in connection with any Tax Claim or information request with respect to any taxable period for which the other party may have a liability under the Deed;

(iii) consult with the other party as to any Tax audits, enquiries or correspondence with any Tax Authority, including providing such other party with the reasonable opportunity to provide comments as to any such proposed correspondence; and

(iv) timely sign and deliver the certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce) Transfer Taxes, or to file Tax Returns;

provided, however, that none of the parties or any of their Affiliates shall be required to disclose to the other party or any of its Affiliates, any books, records, Tax Returns, schedules, work papers or other documents or data consisting of, or relating to, any member of any Affiliated Group for Tax purposes, except for a pro forma copy of any Tax Return (or other information) that relates solely to one or more Oldford Group Companies. Buyer and the Warranting Sellers (to the extent that they are under their control as of the Completion Date) agree to retain all books and records with respect to Tax matters pertinent to any Oldford Group Company relating to any taxable period beginning before the Completion Date until the expiration of the applicable statute of limitations (and, to the extent notified by Buyer or the Warranting Seller, any extensions thereof), and to abide by all record retention agreements entered into with any Relevant Authority. Each party agrees not to dispose of any documents without first offering the other party the opportunity at its sole cost and expense to take possession of those documents.

1.5 Additional Tax Covenants.

(a) Powers of Attorney. Powers of attorney with respect to Tax matters granted by or on behalf of the Oldford Group Companies prior to the Completion Date will be terminated as of the Completion Date, except for specific powers of attorney that Buyer identifies in writing to the Sellers’ Representative shall not be terminated.

(b) Tax Benefits and Refunds. Without duplication of any other section of this Deed, any Tax refunds received by an Oldford Group Company, and any amounts credited against Tax to which an Oldford Group Company becomes entitled, that relate to any period prior to Completion (including any Pre-Completion Tax Period) shall be for the account of Seller, except to the extent the refund or credit: (i) is a consequence of a carryback to that period of Losses or other Tax benefits generated in a Post-Completion Tax Period; or (ii) was included in the Confirmed Completion Balance Sheet or otherwise taken into account in determining the Confirmed Completion Date Purchase Price. The Buyer shall procure that the applicable Oldford Group Company shall remit the refund or the amount of the credit to Sellers in the taxable period it is realized, when applicable. If any Tax refund is subsequently disallowed, Sellers shall reimburse such Oldford Group Company for any amount received pursuant to the preceding sentence.

139


EXECUTION

Signed as a deed on behalf of Oldford Group	)
Limited, a company incorporated in the Isle of	)	(s) Pinhas Schapira

Man, by Pinhas Schapira, being a person who, in	)	By:	Pinhas Schapira
accordance with the laws of that territory, is acting	)	Title:	Director
under the authority of Oldford Group Limited	)
	)

[Signature Page to Deed and Scheme of Merger]

140


EXECUTION

SIGNED as a deed on behalf of Amaya Holdings	)
B.V., a company incorporated in the Netherlands,	)
by Amaya Holdings Coöperatieve U.A., being a	)	(s) Marlon Goldstein

person who, in accordance with the laws of that	)	By:	Marlon Goldstein
territory, is acting under the authority of Amaya	)	Title:	Managing Director A
Holdings B.V.	)

	)
	)
	)	(s) Dennis Kramer

	)	By:	Dennis Kramer
	)	Title:	Managing Director B

[Signature Page to Deed and Scheme of Merger]

141


EXECUTION

Signed as a deed on behalf of Amaya Gaming	)
Group Inc., a company incorporated in Quebec,	)	(s) David Baazov

Canada, by David Baazov, being a person who, in	)	By:	David Baazov
accordance with the laws of that territory, is acting	)	Title:	Chief Executive Officer
under the authority of Amaya Gaming Group Inc.	)

[Signature Page to Deed and Scheme of Merger]

142


EXECUTION

SIGNED as a deed by Igal Mark Scheinberg, as	)
Sellers’ Representative, in the presence of:	)	(s) Igal Mark Scheinberg

	)	By:	Igal Mark Scheinberg
	)	Title:	Authorized Signatory


Signature of Witness:		(s) Karen Patricia White

Name of Witness:		Karen Patricia White

Address of Witness:		[Intentionally Deleted]

Occupation of Witness:		[Intentionally Deleted]

[Signature Page to Deed and Scheme of Merger]

143


EXECUTION

Signed as a deed on behalf of Titan IOM	)
Mergerco Ltd, a company incorporated in the Isle	)	(s) Richard Vanderplank

of Man, by Richard Vanderplank, being a person	)	By:	Richard Vanderplank
who, in accordance with the laws of that territory,	)	Title:	Director
is acting under the authority of Titan IOM	)
Mergerco Ltd	)

[Signature Page to Deed and Scheme of Merger]

144


EXECUTION

Signed as a deed on behalf of Paicolex Trust	)
Company (BVI) Limited (as trustee of the Bare	)	(s) Andrew Lugg

Trust dated 28 December 2006 for I.M.	)	By:	Andrew Lugg
Scheinberg (a Warranting Seller)), a company	)	Title:	Director
incorporated in the British Virgin Islands, by	)
Andrew Lugg and Patricia Messmer Scampoli,	)
being persons who, in accordance with the laws	)	(s) Patricia Messmer Scampoli

of that territory, are acting under the authority of	)	By:	Patricia Messmer Scampoli
Paicolex Trust Company (BVI) Limited	)	Title:	Authorized Signatory

[Signature Page to Deed and Scheme of Merger]

145


EXECUTION

SIGNED as a deed by Igal Mark Scheinberg, (in his	)
capacity as beneficiary under a Bare Trust for I.M.	)	(s) Igal Mark Scheinberg

Scheinberg dated 28 December 2006 and as a	)	By:	Igal Mark Scheinberg
Warranting Seller) in the presence of:	)	Title:	Beneficiary


Signature of Witness:		(s) Karen Patricia White

Name of Witness:		Karen Patricia White

Address of Witness:		[Intentionally Deleted]

Occupation of Witness:		[Intentionally Deleted]

[Signature Page to Deed and Scheme of Merger]

146


EXECUTION

SIGNED by Pinhas Schapira, (in his capacity as a	)
Warranting Seller) in the presence of:	)	(s) Pinhas Schapira


Signature of Witness:		(s) Harriet Finn

Name of Witness:		Harriet Finn

Address of Witness:		[Intentionally Deleted]

Occupation of Witness:		[Intentionally Deleted]

[Signature Page to Deed and Scheme of Merger]

147

EXHIBIT A-1

Voting Agreement

[INTENTIONALLY DELETED]

148

EXHIBIT A-2

Form of Scheme of Merger

SCHEME OF MERGER

(In accordance with Section 153 of the Isle of Man Companies Act 2006)

BETWEEN:

OLDFORD GROUP LIMITED

-and-

TITAN IOM MERGERCO LTD

1.	PRELIMINARY

1.1	This Scheme of Merger has been executed on the date last appearing below and is made between:

1.1.1

Oldford Group Limited (the Target Company); and

1.1.2

Titan IOM Mergerco Ltd (the Merging Company and, together with the Target Company, the Constituent Companies).

1.2	The Target Company is a company that was registered under the Isle of Man Companies Act 2006 (the Act) on 20 November 2013 and is validly existing under the Act with registration number 010483V.

1.3	The Merging Company is a company that was incorporated under the Act on 23 May 2014 and is validly existing under the Act with registration number 011133V.

1.4	Neither of the Constituent Companies:

1.4.1

is in liquidation or is subject to insolvency or analogous proceedings in any jurisdiction;

1.4.2

has been subject to an appointment of either a receiver or manager in relation to any of its assets;

1.4.3

has entered into an arrangement with its creditors that has not been concluded;

1.4.4

is subject to an application that has been made to a court in any jurisdiction for its liquidation or for it to be subject to insolvency or analogous proceedings that has not yet been determined; or

1.4.5

fails to satisfy the solvency test.

149

2.	BOARD APPROVAL AND STATUTORY DECLARATIONS

2.1

This Scheme of Merger was approved by the board of directors of the Target Company on June 12 2014 for the purposes of Section 153(3) of the Act and each director of the Target Company has on or around the date hereof made a statutory declaration that the Target Company meets the requirements of Section 153(2) of the Act, as set out in paragraph 1.4 above.

2.2

This Scheme of Merger was approved by the board of directors of the Merging Company on June 12 2014 for the purposes of Section 153(3) of the Act, and each director of the Merging Company has on or around the date hereof made a statutory declaration that the Merging Company meets the requirements of Section 153(2) of the Act, as set out in paragraph 1.4 above.

3.	SHARE CAPITAL AND SHAREHOLDER NOTICE

3.1	The issued share capital of the Target Company comprises only one class of shares, being ordinary shares of US$0.00005 par value each (Original Shares).

3.2	On 22 June, 2014 documents were sent by the Target Company to each holder of Original Shares appearing on the register of members of the Target Company at that date as follows:

3.2.1

a notice in accordance with the Act and the Memorandum and Articles of Association of the Target Company (the Original Target Company Memorandum and Articles) convening a shareholder meeting of the Target Company to be held on 9 July, 2014 to consider and, if thought fit, to pass a resolution to approve this Scheme of Merger and annexing thereto a copy of the form of this Scheme of Merger in accordance with Section 153(6)(c) of the Act; and

3.2.2

a notice in accordance with Section 154(2)(c) of the Act.

3.3	The issued share capital of the Merging Company comprises only one class of shares, being ordinary shares of US$0.01 par value each (Merging Company Shares).

3.4

On 20 June 2014 documents were sent by the Merging Company to the only holder of Merging Company Shares appearing on the register of members of the Merging Company at that date, being Amaya Holdings B.V. (a company incorporated and existing under the laws of the Netherlands with company registration number 60755814) (the Purchaser), as follows:

3.4.1

a notice in accordance with the Act and the Memorandum and Articles of Association of the Merging Company convening a shareholder meeting of the Merging Company to be held on 9 July, 2014 to consider and, if thought fit, to pass a resolution to approve this Scheme of Merger and annexing thereto a copy of the form of this Scheme of Merger in accordance with Section 153(6)(c) of the Act; and

3.4.2

a notice in accordance with Section 154(2)(d) of the Act.

150

4.	PUBLIC NOTICE AND CHARGE HOLDERS

4.1	A notice in relation to this Scheme of Merger was published in accordance with Section 154(2)(c) of the Act as follows:

4.1.1

on [ ] in [ ]; and

4.1.2

on [ ] in [ ].

4.2	Neither of the Constituent Companies has created any charges in respect of which Section 154(2)(e) of the Act would apply.

5.	EFFECTIVE DATE

5.1	This Scheme of Merger will become effective on the date on which the Registrar of Companies issues the certificate of merger pursuant to Section 154(3)(b) of the Act (the Effective Date).

6.	TERMS OF SCHEME OF MERGER

6.1	On the Effective Date:

6.1.1

The Merging Company will merge with and into the Target Company, with the Target Company being the surviving company (the Surviving Company) and a wholly owned subsidiary of the Purchaser, in accordance with Section 153 of the Act.

6.1.2

the amended Memorandum and Articles of Association set out in Schedule 1 to this Scheme of Merger (the New Surviving Company Memorandum and Articles) will become the Memorandum and Articles of Association of the Surviving Company in substitution for, and to the exclusion of, the Original Target Company Memorandum and Articles;

6.1.3

assets of every description, including choses in action and the business of each of the Constituent Companies, will immediately vest in the Surviving Company;

6.1.4

the Surviving Company will be liable for all claims, debts, liabilities and obligations of each of the Constituent Companies;

6.1.5

all the Original Shares in issue as at the Effective Date will be immediately cancelled (the Cancelled Shares) and 10,000,000 ordinary shares of US$0.001 par value in the Surviving Company (the New Shares) will be issued to the Purchaser in consideration of the payment without interest (subject to and in accordance with paragraph 6.2) of the Merger Consideration (as defined in paragraph 6.2 below) or the Appraisal Consideration (as defined in paragraph 6.4 below);

151

6.1.6

each of the Merging Company Shares will be immediately converted into one New Share in addition to the New Shares issued pursuant to paragraph 6.1.5;

6.1.7

the Merging Company will be struck off and dissolved; and

6.1.8

the Surviving Company will amend its Register of Members immediately to reflect the cancellation of the Original Shares in accordance with paragraph 6.1.5 above and the creation of the New Shares in the name of the Purchaser in accordance with paragraphs 6.1.5 and 6.1.6.

6.2

The Purchaser will pay each person who is registered as a holder of any Cancelled Shares immediately prior to this Scheme of Merger becoming effective and who has properly submitted a letter of transmittal in the agreed form (Letter of Transmittal) to the paying agent (Paying Agent), appointed by the Purchaser and the representative of the holders of the Cancelled Shares (Sellers’ Representative) and who does not exercise his/her/its right to dissent in accordance with Section 161 of the Act (an Accepting Shareholder) an amount per Cancelled Share held by him/her/it immediately prior to this Scheme of Merger becoming effective as described on Schedule 2 annexed hereto (the Merger Consideration) at the time and in the manner provided for in paragraph 6.3 below.

6.3

Subject to any prohibition or restriction imposed by law, within five business days after the receipt by the Paying Agent of a validly delivered Letter of Transmittal by an Accepting Shareholder but in no event prior to the first business day following the Effective Date, Purchaser will cause the Paying Agent to remit payment of the portion of the Merger Consideration (in accordance with Schedule 2 annexed hereto) due to each Accepting Shareholder for each Cancelled Share of such Accepting Shareholder, as of the Effective Date, by cheque or wire transfer of immediately available funds made payable to the Accepting Shareholder (or as otherwise prescribed by the Letter of Transmittal) and, if in the form of a cheque, despatched by post in pre-paid envelopes to the address of the relevant Accepting Shareholder appearing in the Register of Members of the Target Company immediately prior to the Scheme of Merger becoming effective (or as otherwise prescribed in the Letter of Transmittal). Encashment of any such cheque or confirmation of receipt of a wire transfer will be a complete discharge of the obligations of the Surviving Company and the Purchaser under this Scheme of Merger to pay the monies thereby represented.

6.4

In the event that any person who is registered as a holder of any Cancelled Shares immediately prior to this Scheme of Merger becoming effective exercises his/her/its right to dissent in accordance with Section 161 of the Act (a Dissenting Shareholder), any such Dissenting Shareholder will not receive the Merger Consideration and his/her/its only right in respect of the Cancelled Shares held by him/her/it immediately prior to this Scheme of Merger becoming effective will be to receive payment from the Surviving Company of the sum determined to be due to him/her/it in accordance with Section 161 of the Act (the Appraisal Consideration).

6.5	With effect from the Effective Date, all certificates representing Cancelled Shares will cease to have effect and the registered holders thereof shall be bound by the request of the Surviving Company to deliver up the same to the Surviving Company.

152

7.	GOVERNING LAW

7.1	This Scheme of Merger is governed by the laws of the Isle of Man.

153

EXECUTION


EXECUTED on behalf of	)
OLDFORD GROUP LIMITED:	)
	)
	)
		Name:
		Position:	Director
		Date:

EXECUTED on behalf of	)
TITAN IOM MERGERCO LTD:	)
	)
	)
		Name:
		Position:	Director
		Date:

154

SCHEDULE 1

New Surviving Company Memorandum and Articles

155

SCHEDULE 2

MERGER CONSIDERATION PER CANCELLED SHARE

An amount equal to the quotient of:

(a)

the sum, as adjusted, of:

(i)

US$4,500,000,000; minus

(ii)

the amount of indebtedness of the Target Company as of the Effective Date, minus

(iii)

if the Target Company’s net working capital as of the Effective Date (Net Working Capital) is less than a reference working capital amount (the Reference Amount), the difference between the Reference Amount and the Net Working Capital; plus

(iv)

if Net Working Capital is greater than the Reference Amount, the difference between the Net Working Capital and the Reference Amount; plus

(v)

an amount equal to (1) $15,000,000, plus (2) the Target Company’s cash as of the Effective Date, minus (3) the Target Company’s staff bonus accruals as of the Effective Date, minus (4) dividends payable by the Target Company on the Effective Date plus (5) the Target Company’s director loans as of the Effective Date; minus

(vi)

certain limited transaction expenses incurred in relation to the transactions contemplated by this Scheme of Merger, minus

(vii)

a possible consideration reduction of up to US$[*****], which amount shall not be paid at the Effective Date and be retained in designated accounts (Amounts in Escrow) in respect of: (1) successful indemnification claims brought by the Purchaser subsequent to the Effective Date and (2) reimbursement of costs, fees and other expenses incurred by the Sellers’ Representative in relation to the transactions contemplated by this Scheme of Merger. Out of the Amounts in Escrow: (x) an amount equal to US$315,000,000 less any amounts in respect of pending or successful indemnification claims brought by the Purchaser will become payable to the holders of Cancelled Shares 18 months following the Effective Date (while any amounts in respect of such pending indemnification claims brought by the Purchaser will become payable to holders of Cancelled Shares following such 18 month period, to the extent that there shall be a final resolution of such claims other than in favour of the Purchaser, if any), and (y) the remaining balance of an initial aggregate amount of

156

US$[*****] will become payable to the holders of Cancelled Shares, once the Sellers’ Representative concludes, in his sole discretion, that there shall remain no further potential liabilities or expenses relating to the transactions contemplated by this Scheme of Merger that are payable by the Sellers’ Representative on behalf of the holders of the Cancelled Shares; plus

(viii)

a deferred payment of US$400,000,000 payable to the holders of Cancelled Shares upon the earlier of (1) July 31, 2017, and (2) 30 months following the Effective Date, which payment may be subject to adjustments, based upon the occurrence of certain events.

AND

(b)

The aggregate number of the Target Company’s (a) Cancelled Shares, (b) ordinary shares underlying vested share awards, (c) ordinary shares underlying vested share options, and (d) deemed ordinary shares underlying vested phantom plan equity award units, in each of (a), (b), (c) and (d) outstanding as of immediately before the Effective Date.

157

EXHIBIT A-3

Form of Amended and Restated M&A of Association of Oldford

ISLE OF MAN

COMPANIES ACT 2006

MEMORANDUM AND ARTICLES OF ASSOCIATION

OLDFORD GROUP LIMITED

Cains Fiduciaries Limited

Fort Anne

Douglas

Isle of Man

IM1 5PD

158

ISLE OF MAN

COMPANIES ACT 2006

MEMORANDUM OF ASSOCIATION

Oldford Group LIMITED

1.	The name of the Company is Oldford Group Limited.

2.	The Company is a company limited by shares.

3.	The address of the Company’s registered office is at:

Fort Anne

Douglas

Isle of Man

IM1 5PD

4.	The registered agent of the Company is:

Cains Fiduciaries Limited

Fort Anne

Douglas

Isle of Man

IM1 5PD

5.	The Company has unlimited capacity to carry on or to undertake any business or activity, to do, or to be subject to, any act or to enter into any transaction.

6.	Subject to the provisions of the Act, the Company shall by resolution of the directors or members have the power to amend or modify any of the provisions of the memorandum of association or articles of association.

159

ISLE OF MAN

COMPANIES ACT 2006

ARTICLES OF ASSOCIATION

OLDFORD GROUP LIMITED

1.	Definitions and Interpretation

1.1	In these Articles, if not inconsistent with the subject or context –

1.1.1

“the Act” means the Companies Act 2006 including any statutory modification or re-enactment of it for the time being in operation;

1.1.2

“Articles” means the Articles of Association of the Company as amended from time to time;

1.1.3

“Board” means the board of Directors;

1.1.4

“Chairman of the Board” shall be construed in accordance with Article 19.2;

1.1.5

“Class” in relation to Shares, means a class of Shares each of which has identical rights, privileges, limitations and conditions attached to it;

1.1.6

“Director” means a director of the Company;

1.1.7

“Distribution” means, in relation to a distribution by the Company to a Shareholder, the direct or indirect transfer of any assets, other than Shares, to or for the benefit of a Shareholder or the incurring of a debt to or for the benefit of a Shareholder, in relation to Shares held by that Shareholder, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of Shares, a transfer or assignment of indebtedness or otherwise, and includes a dividend;

1.1.8

“Memorandum” means the Memorandum of Association of the Company as amended from time to time;

1.1.9

“person” includes a body corporate;

1.1.10

“Register of Members” has the meaning specified in Article 3.7;

1.1.11

“Registrar” means the Registrar of Companies appointed under section 205 of the Act;

1.1.12

“Seal” means any seal which has been duly adopted as the common seal of the Company;

1.1.13

“Share” means a share issued by the Company;

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1.1.14

“Shareholder” means a person whose name is entered in the Register of Members as the holder of one or more Shares or fractional Shares and each person named as a subscriber in the Memorandum until that person’s name is entered in the Register of Members;

1.1.15

“Solvency Test” means the solvency test referred to in section 49 (meaning of “solvency test” and “distribution”) of the Act which the Company satisfies if it is able to pay its debts as they become due in the normal course of the Company’s business and the value of its assets exceeds the value of its liabilities;

1.1.16

“Voting Rights” means, in relation to a resolution of the Shareholders or a resolution of a class of Shareholders, all the rights to vote on such resolution conferred on such Shareholders according to the rights attached to the Shares held;

1.1.17

“written” or any term of like import includes information generated, sent, received or stored by electronic, digital, magnetic, optical, electromagnetic, biometric or photonic means including electronic data interchange, electronic mail, telegram, telex or telecopy, and “in writing” shall be construed accordingly.

1.2	In the Articles, unless the context otherwise requires –

1.2.1

a reference to –

(a)

an “Article” is a reference to an article in the Articles;

(b)

voting by Shareholders is a reference to the casting of votes attached to Shares by Shareholders;

1.2.2

words denoting any one gender include all other genders and words denoting the singular shall include the plural and vice versa; and

1.2.3

words or phrases contained in the Articles bear the same meaning as they do in the Act but excluding any statutory modification to such meaning not in operation when the Articles become binding on the Company.

1.3	Headings are for ease of reference only and shall not affect the interpretation of the Articles.

2.	Share Certificates

2.1

Every Shareholder is entitled upon request to a certificate for all the Shares of each Class held by that Shareholder signed by a Director or officer of the Company, or any other person authorised by a resolution of the Directors, or under the Seal specifying the number of Shares of such Class held by that Shareholder. Such signature or Seal may be facsimiles.

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2.2

Any Shareholder receiving a certificate shall indemnify and hold the Company and the Directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use of such certificate or representation made by any person by virtue of the possession of such certificate. If a certificate for Shares is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and payment of the expenses reasonably incurred by the Company in investigating evidence as the Directors may determine (but otherwise free of charge) and, in the case of defacement or wearing out, on delivery up of the old certificate.

3.	Shares

3.1	Shares may be issued and options to acquire Shares may be granted at such times, to such persons, for such consideration and on such terms as the Directors may determine.

3.2	The Company is authorised to issue a maximum of 1,000,000,000 Shares made up of 1,000,000,000 ordinary shares with a par value of US$0.001 per share.

3.3	Shares may be numbered or unnumbered.

3.4	The Company may issue fractional Shares. A fractional Share has the corresponding fractional rights, obligations and liabilities of a whole Share of the same Class.

3.5	The Company may issue bonus Shares and nil or partly paid Shares.

3.6

A Share may be issued for consideration in any form, including money, a promissory note or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services provided that no Shares may be issued for a consideration other than money, unless a resolution of Directors has been passed stating –

3.6.1

the amount to be credited for the issue of the Shares;

3.6.2

the Board’s determination of the reasonable present cash value of the non-money consideration for the issue; and

3.6.3

that, in their opinion, the present cash value of the non-money consideration for the issue is not less than the amount to be credited for the issue of the Shares.

3.7	The Company shall keep a register (the “Register of Members”) containing –

3.7.1

the name and business or residential address of each of the Shareholders provided that if the register does not contain a shareholder’s residential address the registered agent shall maintain a separate record of such address;

3.7.2

the number of Shares of each Class held by each Shareholder;

3.7.3

the date on which the name of each Shareholder was entered in the Register of Members; and

3.7.4

the date on which any person ceased to be a Shareholder.

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3.8	The Register of Members may be in any such form as the Directors may approve but, if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents.

3.9	A Share is deemed to be issued when the name of the Shareholder is entered in the Register of Members.

3.10

The Company may pay commission at such rates or in such amounts as the Directors may determine to any person in consideration of such person subscribing or agreeing to subscribe, whether absolutely or conditionally for any Shares in the Company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any Shares in the Company.

4.	Rights of Shares

4.1	Subject to any rights or restrictions attached to any Shares, each Share confers upon the Shareholder –

4.1.1

the right to one vote at a meeting of Shareholders or on any resolution of the Shareholders;

4.1.2

the right to an equal share in any dividend paid by the Company; and

4.1.3

the right to an equal share in the distribution of the surplus assets of the Company on its winding up.

4.2	The Company may issue Shares that negate, modify or add to the rights specified in Article 4.1.

4.3	The Company may issue Shares of different Classes.

4.4	If at any time the Shares are divided into different Classes, the rights attached to any Class may only be varied by resolution of the Shareholders of that Class passed by a Shareholder or Shareholders holding at least 75 per cent of the Voting Rights exercised in relation thereto.

4.5	The rights conferred upon the holders of the Shares of any Class shall not, unless otherwise expressly provided by the terms of issue of the Shares of that Class, be deemed to be varied by the creation or issue of further Shares ranking pari passu with such Shares.

5.	Redemption of Securities

5.1	The Company may purchase, redeem or otherwise acquire its own Shares or other securities for any consideration provided that the Company continues to have at least one Shareholder at all times.

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5.2	Unless Shares are expressed to be redeemable, the Company may only purchase, redeem or otherwise acquire them pursuant to –

5.2.1

an offer to all Shareholders which, if accepted, would leave the relative rights of the Shareholders unaffected and which affords each Shareholder a period of not less than 14 days within which to accept the offer; or

5.2.2

an offer to one or more Shareholders to which all Shareholders have consented in writing and in respect of which a resolution of the Directors has been passed which states that, in the opinion of the Board, the transaction benefits the remaining Shareholders and the terms of the offer are fair and reasonable to the Company and the remaining Shareholders.

5.3

The Company may only offer to purchase, redeem or otherwise acquire Shares if the resolution of the Directors authorising the purchase, redemption or other acquisition contains a statement that the Directors are satisfied, on reasonable grounds, that the Company will, immediately after the purchase, redemption or other acquisition, satisfy the Solvency Test.

5.4	Shares and other securities that the Company purchases, redeems or otherwise acquires pursuant to this Article shall be cancelled and no longer issued and outstanding.

6.	Alteration of Share Capital

6.1	The Company may, by resolution of Directors, alter the Company’s share capital comprising Shares with par value in any way and, in particular but without prejudice to the generality of the foregoing, may –

6.1.1

consolidate and divide all or any such Shares into Shares of a larger amount;

6.1.2

redenominate all or any such Shares as Shares with a par value denominated in another currency on such basis as the Directors see fit; or

6.1.3

sub-divide all or any such Shares into Shares of smaller amount.

7.	Reduction of Share Capital

The Company may, by a resolution of the Directors, reduce its share capital in any way provided that the Board is satisfied, on reasonable grounds, that the Company will, immediately after such reduction, satisfy the Solvency Test.

Lien

8.1	The Company shall (unless the Directors resolve to the contrary in respect of any Share) have a first and paramount lien on every Share (not being a fully paid Share) for all moneys (whether presently payable or not) payable at a fixed time or called in respect of that Share.

8.2	The Company may sell in such manner as the Board determines any Shares on which the Company has a lien if a sum in respect of which the lien exists is presently payable

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and is not paid within 14 days after notice has been given to the Shareholder or to the person entitled to it in consequence of the death or bankruptcy of the Shareholder, demanding payment and stating that if the notice is not complied with the Shares may be sold.

8.3	In order to give effect to a sale under Article 8.2, the Directors may authorise some person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser.

8.4

The net proceeds of any sale under Article 8.2, after payment of the costs of sale, shall be applied in payment of so much of the sum for which the lien exists as is presently payable, and any residue shall (upon surrender to the Company for cancellation of any certificates for the Shares sold and subject to a like lien for any moneys not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares immediately prior to their sale.

8.5	The title of the transferee to any Shares sold under Article 8.2 shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

9.	Calls on Shares

9.1

Subject to the terms of issue of any Shares, the Board may make calls upon the Shareholders in respect of any moneys unpaid on their Shares and each Shareholder shall (subject to receiving at least 14 days’ notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called on such Shareholder’s Shares.

9.2

If a call remains unpaid after it has become due and payable, the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the Share or in the notice of the call or, if no rate is fixed, at the rate of 5 per cent per annum, but the Board may waive payment of the interest wholly or in part.

9.3	The Board may make arrangements on the issue of Shares for a difference between the Shareholders in the amounts and times of payment of calls on their Shares.

10.

Forfeiture

10.1	Shares that are not fully paid on issue are subject to the forfeiture provisions set forth in this Article, and for this purpose, Shares issued for a promissory note, other written obligation to contribute money or property or a contract for future services are deemed not to be fully paid.

10.2	A written notice of forfeiture specifying the date for payment to be made shall be served on the Shareholder who defaults in making payment in respect of the Shares.

10.3	The written notice of forfeiture referred to in Article 10.2 shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before

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which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the Shares, or any of them, in respect of which payment is not made, will be liable to be forfeited.

10.4

Where a written notice of forfeiture has been issued pursuant to Article 10.3 and the requirements of the notice have not been complied with, the Board may, at any time before tender of payment, forfeit and cancel the Shares to which the notice relates. The forfeiture shall include all dividends or other monies payable in respect of the forfeited Shares and not paid before the forfeiture.

10.5	The Company is under no obligation to refund any moneys to the Shareholder whose Shares have been cancelled pursuant to Article 10.4 and that Shareholder shall be discharged from any further obligation to the Company.

11.

Transfer of Shares

11.1

Shares may be transferred by a written instrument of transfer signed by the transferor and, unless the Share is fully paid, by the transferee and containing the name and address of the transferee, which shall be sent to the registered agent of the Company or such other person as the Directors may from time to time appoint for registration.

11.2

The Company shall, on receipt of an instrument of transfer complying with Article 11.1, cause the name of the transferee of the Share to be entered in the Register of Members unless the Board resolves to refuse or delay the registration of the transfer for reasons to be specified in a resolution of the Directors.

11.3	The Board may not resolve to refuse or delay the transfer of a Share unless the transferor has failed to pay an amount due in respect of that Share.

11.4	The transfer of a Share is effective when the name of the transferee is entered on the Register of Members.

11.5	If the Board is satisfied that an instrument of transfer relating to Shares has been signed but that the instrument has been lost or destroyed, it may by resolution of the Directors–

11.5.1

accept such evidence of the transfer of Shares as it considers appropriate; and

11.5.2

determine that the transferee’s name should be entered in the Register of Members notwithstanding the absence of the instrument of transfer.

11.6

A person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder may, upon producing such evidence as the Board may reasonably require, elect either to become the registered holder of the Share by giving notice to the Company to that effect or have some other person registered as the transferee by executing an instrument of transfer even though such person is not a Shareholder at the time of the transfer. Any instrument of transfer of the Shares must be in accordance with the provisions of Article 11.1.

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12.

Distributions

12.1	The Board may by resolution of the Directors authorise a Distribution by the Company to Shareholders at such time and of such amount as the Board thinks fit if it is satisfied, on reasonable grounds, that the Company will, immediately after the Distribution, satisfy the Solvency Test.

12.2	Where a Distribution has been made to a Shareholder and the Company did not, immediately after the Distribution, satisfy the Solvency Test, the Distribution (or the value thereof) may be recovered by the Company from the Shareholder in accordance with section 51 of the Act.

12.3	If several persons are registered as joint holders of any Shares, any one such person may give an effective receipt for any Distribution.

13.

Distributions by way of Dividend

13.1	The Company may, by a resolution of the Directors, declare and pay a Distribution by way of dividend at such time and of such amount as the Board thinks fit if the Board is satisfied, on reasonable grounds, that the Company will, immediately after the Distribution, satisfy the Solvency Test.

13.2	Dividends may be paid in money, shares, or other property.

13.3	Notice of any dividend that has been declared shall be given to each Shareholder entitled to receive the dividend as specified in Article 26.1 and all dividends unclaimed for 3 years after having been declared may be forfeited by a resolution of Directors for the benefit of the Company.

13.4	No dividend shall bear interest as against the Company.

14.

Meetings and Consents of Shareholders

14.1	The Board may convene meetings of the Shareholders or any Class of Shareholders at such times and in such manner and places within or outside the Isle of Man as they consider appropriate.

14.2	Upon the written request of a Shareholder or Shareholders entitled to exercise 10 per cent or more of the Voting Rights in respect of the matter for which the meeting is requested, the Board shall convene a meeting of Shareholders or Class of Shareholders.

14.3

When convening a Shareholders’ meeting or a meeting of a Class of Shareholders, the Board shall give not less than 14 days’ notice of such meeting to those Shareholders whose names on the date the notice is given appear as Shareholders in the Register of Members of the Company and who are entitled to vote at the meeting.

14.4	The Board may fix, as the record date for determining those Shareholders that are entitled to vote at the meeting, the date notice is given of the meeting, or such other date as may be specified in the notice, being a date not earlier than the date of the notice.

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14.5

A meeting of Shareholders or a Class of Shareholders held in contravention of the requirement to give not less than 14 days’ notice is valid if a Shareholder or Shareholders holding at least 90 per cent of the total Voting Rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a Shareholder at the meeting shall constitute a waiver in relation to all the Shares which that Shareholder holds.

14.6	The inadvertent failure of the Board to give notice of a meeting to a Shareholder or the fact that a Shareholder has not received notice, does not invalidate the meeting.

14.7	A Shareholder may be represented at a meeting of Shareholders or a Class of Shareholders by a proxy who may speak and vote on behalf of the Shareholder.

14.8

The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at which the proxy shall be presented.

14.9	The instrument appointing a proxy shall be in substantially the following form or such other form as the chairman of the meeting shall accept as properly evidencing the wishes of the Shareholder appointing the proxy.


[NAME OF COMPANY]

I/We being a Shareholder of the above Company HEREBY APPOINT [ ] of [ ] or failing him/her [ ] of [ ] to be my/our proxy to speak and vote for me/us at the meeting of Shareholders to be held on the [ ] day of [ ] and at any adjournment thereof. (Any restrictions on voting to be inserted here) Signed this [ ] day of [ ] 20[ ]


Shareholder

14.10

The following applies where Shares are jointly owned –

14.10.1

each of the joint owners may be present in person or by proxy at a meeting of Shareholders and may speak as a Shareholder;

14.10.2

if only one of the joint owners is present in person or by proxy, that person may vote on behalf of all joint owners; and

14.10.3

if two or more of the joint owners are present in person or by proxy, they must vote as one.

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14.11

A Shareholder shall be deemed to be present at a Shareholders’ meeting or a meeting of a Class of Shareholders if that person participates by telephone or other electronic means and all Shareholders participating in the meeting are able to communicate with each other.

14.12

A meeting of Shareholders or Class of Shareholders is duly constituted and quorate if, at the commencement of the meeting, there are present in person (in the case of a Shareholder who is an individual) or by a duly appointed representative (in the case of a Shareholder who is a body corporate) or by proxy (in either case) a Shareholder or Shareholders holding at least 10 per cent of the Voting Rights entitled to be exercised at the meeting. A quorum may comprise a single Shareholder present in person (in the case of a Shareholder who is an individual) or by a duly appointed representative (in the case of a Shareholder who is a body corporate) or by proxy (in either case) in which case such person may pass a resolution of the Shareholders or Class of Shareholders and a certificate signed by such person accompanied, where such person is a proxy, by a copy of the proxy instrument, shall constitute a valid resolution of the Shareholders.

14.13

If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened at the request of Shareholders, shall be dissolved; in any other case, it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the Board may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person (in the case of a Shareholder who is an individual) or by a duly appointed representative (in the case of a Shareholder who is a body corporate) or by proxy (in either case) a Shareholder or Shareholders holding at least 10 per cent of the Voting Rights entitled to be exercised at the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved.

14.14

At every meeting of Shareholders or Class of Shareholders, the Chairman of the Board shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present at the meeting, the Shareholders present shall choose one of their number to be the chairman. If the Shareholders are unable to choose a chairman for any reason, then the Shareholder with the most Voting Rights present at the meeting in person (in the case of a Shareholder who is an individual) or by a duly appointed representative (in the case of a Shareholder who is a body corporate) or by proxy (in either case) shall preside as chairman failing which the longest registered Shareholder present in person (in the case of a Shareholder who is an individual) or by a duly appointed representative (in the case of a Shareholder who is a body corporate) or by proxy (in either case) shall take the chair.

14.15

The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

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14.16

Unless otherwise specified in the Act or in the Memorandum or Articles, the exercise by the Shareholders or a Class of Shareholders of a power which is given to them under the Act or the Memorandum or Articles shall be by –

14.16.1

a resolution passed at a meeting of the Shareholders or Class of Shareholders; or

14.16.2

a resolution in writing of the Shareholders or Class of Shareholders.

14.17

Subject to any requirement for a higher majority specified in the Act or in the Memorandum or Articles, a resolution of the Shareholders or a Class of Shareholders is passed at a meeting of such Shareholders if it is approved by a Shareholder or Shareholders holding a majority of in excess of 50 per cent of the Voting Rights exercised in relation thereto.

14.18

The right of any individual to speak for or represent a Shareholder which is a body corporate shall be determined by the law of the jurisdiction where, and by the documents by which, the body corporate is constituted derives its existence. In case of doubt, the Board may seek legal advice from a suitably qualified person and unless a court of competent jurisdiction shall otherwise rule, the Board may rely and act upon such advice without incurring any liability to any Shareholder or the Company.

14.19

At any Shareholders’ meeting, the chairman is responsible for deciding in such manner as the chairman considers appropriate whether any resolution proposed has been carried or not and the result of such decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubts as to the outcome of the vote on a proposed resolution, the chairman shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any Shareholder present in person or by proxy who disputes the announcement on any demand that a poll be taken and the chairman shall cause a poll to be taken again. If a poll is taken at any meeting, the result shall be announced at the meeting and recorded in the minutes of the meeting.

14.20

Any Shareholder which is a body corporate may, by resolution of its directors or other governing body, authorise such individual as it thinks fit to act as its representative at any meeting of Shareholders or Class of Shareholders, and the individual so authorised shall be entitled to exercise the same rights on behalf of the Shareholder which the individual represents as that Shareholder could exercise if it were an individual.

14.21

The chairman of any meeting at which a vote is cast on behalf of any Shareholder which is a body corporate may call for such evidence of authority of the representative to exercise the rights of the Shareholder as the chairman may reasonably require.

14.22

Directors may attend and speak at any Shareholders’ meeting and at any separate meeting of a Class of Shareholders.

14.23

Any action that may be taken by the Shareholders or a Class of Shareholders at a meeting may also be taken by a resolution consented to in writing, without the need for any notice, by a Shareholder or Shareholders holding in excess of 50 per cent of the

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Voting Rights in relation thereto (subject to any requirement specified in the Act or the Articles for a resolution to be passed by a particular majority). The consent may be in the form of counterparts, each counterpart being signed by one or more Shareholders or by one or more of the Class of Shareholders. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which Shareholders or a Class of Shareholders holding a sufficient number of votes to constitute a resolution of Shareholders or Class of Shareholders have consented to the resolution by signed counterparts. If any written resolution of the Shareholders or a Class of Shareholders is adopted otherwise than by the unanimous written consent of all Shareholders or Class of Shareholders, a copy of such resolution shall be sent to all Shareholders or Class of Shareholders not consenting to such resolution forthwith upon it taking effect.

15.

Directors

15.1	The Directors may be appointed by a resolution of the Shareholders or by a resolution of the Directors.

15.2	The minimum number of Directors shall be one and there shall be no maximum number.

15.3

Each Director holds office for the term, if any, fixed by the resolution of the Shareholders or the resolution of the Directors appointing such person, or until such person’s earlier death, resignation or removal or until such person is no longer permitted to act as a Director under section 93 of the Act. If no term is fixed on the appointment of a Director, the Director serves indefinitely until such person’s earlier death, resignation or removal or until such person is no longer permitted to act as a Director under section 93 of the Act.

15.4	A Director may be removed from office by –

15.4.1

a resolution of the Shareholders passed at a meeting of the Shareholders called for the purpose of removing the Director or for purposes including the removal of the Director or by a written resolution consented to by a Shareholder or Shareholders holding at least 75 per cent of the Voting Rights in relation thereto; or

15.4.2

a resolution of the Directors.

15.5

A Director may resign his office by giving written notice of resignation to the Company and the resignation has effect from the date the notice is received by the Company or from such later date as may be specified in the notice. A Director shall resign forthwith as a Director if such person is no longer permitted to act as a Director under the Act.

15.6

The Board may at any time appoint any person to be a Director either to fill a casual vacancy or as an addition to the existing Directors. Where the Board appoints a person as Director to fill a vacancy, the term shall not exceed the term that remained when the person who has ceased to be a Director ceased to hold office.

15.7	A vacancy in relation to Directors occurs if a Director resigns, is removed from office, is no longer permitted to act as a director under section 93 of the Act, dies or otherwise ceases to hold office prior to the expiration of the term of such person’s office.

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15.8	The Company shall keep a register of Directors containing –

15.8.1

the names and business or residential address of the persons who are Directors provided that if the register does not contain the residential address of a Director, the registered agent of the Company shall maintain a separate record of such address;

15.8.2

the date on which each person whose name is entered in the register was appointed as a Director; and

15.8.3

the date on which each person named as a Director ceased to be a Director of the Company.

15.9	The register of Directors may be kept in any such form as the Directors may approve, but if it is in magnetic, electronic, other data storage form or illegible form, the Company must be able to produce legible evidence of its contents.

15.10

The Board may, by resolution of the Directors, fix the emoluments of Directors with respect to services to be rendered in any capacity to the Company.

15.11

The Directors may, by resolution, pay the Directors all expenses properly incurred by the Directors in the discharge of their duties.

15.12

A Director is not required to hold a Share as a qualification for office.

16.

Powers of Directors

16.1

The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors. The Board has all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The Board may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company other than those required by the Act or by the Memorandum or the Articles to be exercised by the Shareholders.

16.2

Each Director shall exercise that person’s powers as Director for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Act, the Memorandum or the Articles. Each Director, in exercising powers or performing duties as Director, shall act honestly and in good faith in what the Director believes to be the best interests of the Company.

16.3	Any Director which is a body corporate may appoint any individual as its duly appointed representative for the purpose of representing it at meetings of the Board, of any committee of Directors or of Shareholders or a Class of Shareholders and with respect to the signing of consent or otherwise.

16.4	The continuing Directors may act notwithstanding any vacancy in the Board.

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16.5	The Board may by resolution of the Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.

16.6	All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by the Directors.

16.7	Any written contract, deed, instrument, power of attorney or other document may be made or executed on behalf of the Company by any person (including any Director) acting with the authority of the Directors.

17.

Proceedings of Directors

17.1	Unless otherwise specified in the Act or in the Memorandum or Articles, the exercise by the Directors of a power given to them under the Act or the Memorandum or Articles shall be by a resolution passed at a meeting of, or consented to in writing by, the Directors or any committee of the Directors.

17.2	Subject to any contrary provision in the Memorandum or Articles, a resolution of the Directors is passed at a meeting of the Directors if it is approved by a majority of the Directors who are present at such meeting and (being entitled to do so) vote thereon.

17.3	Subject to the provisions of the Articles, the Directors may regulate their proceedings as they see fit.

17.4	Any one Director may call a meeting of the Directors by sending a written notice to each other Director.

17.5	A Director shall be given reasonable notice of meetings of Directors save that any Director may waive this requirement to be given notice either before or after such meeting.

17.6	The Board or any committee of Directors may meet at such times and in such manner and places within or outside the Isle of Man as the Board or any committee of the Directors may determine to be necessary or desirable.

17.7	A Director is deemed to be present at a meeting of the Board or at a meeting of any committee of Directors, if such Director participates by telephone or other electronic means and all Directors participating in the meeting are able to communicate with each other.

17.8

A Director may by a written instrument appoint an alternate who need not be a Director and the alternate shall be entitled to attend meetings of the Board or any committee of Directors (as appropriate) in the absence of the Director who appointed such alternate and to vote or consent in the place of the Director until the appointment lapses or is terminated.

173

17.9

A meeting of the Board is duly constituted and quorate for all purposes if at the commencement of the meeting there are two Directors present in person (in the case of a Director who is an individual) or by a duly appointed representative (in the case of a corporate Director) or by an alternate (in either case).

17.10

If the Company has only one Director, the provisions contained in this Article for meetings of the Board do not apply and such sole Director has full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or the Articles required to be exercised by the Shareholders. In lieu of minutes of a meeting, the sole Director shall record in writing and sign a note or memorandum of all matters requiring a resolution of the Directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes.

17.11

At meetings of the Directors at which the Chairman of the Board is present, such person shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present, the Directors present shall choose one of their number to be chairman of the meeting.

17.12

Any action that may be taken by the Directors or a committee of Directors at a meeting may also be taken by a resolution of the Directors or a committee of Directors consented to in writing by a majority of the Directors or by a majority of the members of a committee of Directors provided that a copy of the proposed resolution is sent to all the persons entitled to consent to it. The consent may be in the form of counterparts, each counterpart being signed by one or more Directors or by one or more members of a committee of Directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which a majority of the Directors or members of a committee of Directors has consented to the resolution by signed counterparts. If any written resolution of the Directors or a committee of the Directors is adopted otherwise by the unanimous written consent of all Directors or all members of the committee of Directors, a copy of such resolution shall be sent to all Directors or members of the committee of Directors not consenting to such resolution forthwith upon it taking effect.

18.

Committees

18.1

The Board may, by resolution of the Directors, designate one or more committees, each consisting of one or more Directors, and delegate one or more of their powers, including the power to affix the Seal, to the committee. Any such delegation may be made subject to any conditions the Board may impose, may be made collaterally with, or to the exclusion of, their own powers and may be revoked or altered.

18.2	The Board has no power to delegate to a committee of Directors any of the following powers –

18.2.1

to amend the Memorandum or the Articles;

18.2.2

to change the registered office or registered agent;

18.2.3

to designate committees of Directors;

174

18.2.4

to delegate powers to a committee of Directors;

18.2.5

to appoint or remove Directors;

18.2.6

to appoint or remove an agent to act on behalf of the Company;

18.2.7

to fix emoluments of Directors;

18.2.8

to approve a scheme of merger, consolidation or arrangement;

18.2.9

to make a declaration of solvency;

18.2.10

to make a determination that, immediately after a proposed Distribution, the Company satisfies the Solvency Test; or

18.2.11

to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the Isle of Man.

18.3

Articles 18.2.3 and 18.2.4 do not prevent a committee of Directors, where authorised by resolution of the Directors, from appointing such committee or, by a subsequent resolution of the Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.

18.4

The meetings and proceedings of each committee of Directors consisting of two or more Directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of meeting of Directors so far as they are not superseded by any provisions in the resolution of the Directors establishing the committee.

19.

Officers, Agents and Attorneys

19.1	The Company may by resolution of the Shareholders or by resolution of the Directors change the location of its registered office or change its registered agent.

19.2

The Company may by resolution of the Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a chairman of the Board (the “Chairman of the Board”) and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person.

19.3	The officers shall perform such duties as are prescribed at the time of their appointment, subject to any modification in such duties as may be prescribed subsequently by the Directors.

19.4	The emoluments of all officers shall be fixed by the Board.

19.5

The officers of the Company shall hold office until their successors are duly appointed, but any officer elected or appointed by the Directors may be removed at any time, with or without cause, by resolution of the Directors. Any vacancy occurring in any office of the Company may be filled by resolution of the Directors.

175

19.6

The Board may by resolution of the Directors appoint any person, including a person who is a Director, to be an agent of the Company. An agent of the Company shall have such powers and authority of the Directors, including the power and authority to affix the Seal, as are set forth in the resolution of the Directors appointing the agent, except that no agent has the right to exercise any power or authority of the Board–

19.6.1

to amend the Memorandum or the Articles;

19.6.2

to change the registered office or registered agent;

19.6.3

to designate committees of Directors;

19.6.4

to delegate powers to a committee of Directors;

19.6.5

to appoint or remove Directors;

19.6.6

to appoint or remove an agent to act on behalf of the Company;

19.6.7

to fix emoluments of Directors;

19.6.8

to approve a scheme of merger, consolidation or arrangement;

19.6.9

to make a declaration of solvency;

19.6.10

to make a determination that, immediately after a proposed Distribution, the Company satisfies the Solvency Test; or

19.6.11

to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the Isle of Man.

19.7

The resolution of Directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. The Directors may remove an agent appointed by the Company and may revoke or vary a power conferred on such agent.

19.8	The Company may, by instrument in writing executed in accordance with section 86 of the Act, appoint a person as its attorney either generally or in relation to a specific matter.

20.

Conflict of Interests

20.1	A Director shall, forthwith after becoming aware of the fact that such Director is interested in a transaction entered into or to be entered into by the Company, disclose the interest to the Board.

20.2

For the purposes of Article 20.1, a disclosure to the Board to the effect that a Director is also a member, director, officer or trustee of another named company or other arrangement and is to be regarded as interested in any transaction which may, after the date of the disclosure, be entered into between the Company and that other company or person, is a sufficient disclosure of interest in relation to that transaction.

176

20.3

A disclosure made pursuant to Article 20.1 shall be made or brought to the attention of every Director on the Board, provided that a disclosure shall be deemed to have been so made if it is made at the meeting of the Directors at which the transaction was first considered or, if the Director in question was not at the date of that meeting interested in the transaction or aware that such Director was so interested, at the first meeting of the Directors held after the Director became so aware or so interested (as the case may be).

20.4	Subject to Articles 20.1 to 20.3, a Director who is interested in a transaction entered into or to be entered into by the Company may –

20.4.1

vote on a matter relating to the transaction;

20.4.2

attend a meeting of the Board at which a matter relating to the transaction arises and be included among the Directors present at the meeting for the purposes of a quorum; and

20.4.3

sign a document on behalf of the Company, or do any other thing in that person’s capacity as a Director, that relates to the transaction.

20.5	Provided that a Director has disclosed any interest in accordance with the Act and the Articles, a Director, notwithstanding his office –

20.5.1

may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested;

20.5.2

may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested; and

20.5.3

shall not by reason of his office, be accountable to the Company for any benefit which such Director derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.

21.

Indemnification

21.1	The Company may indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who –

21.1.1

is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a Director; or

21.1.2

is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise.

177

21.2	The indemnity in Article 21.1 only applies if the person acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that the conduct of such person was unlawful.

21.3

The decision of the Directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had no reasonable cause to believe that such person’s conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles unless a question of law is involved.

21.4

The termination of any proceedings by any judgment, order, settlement or conviction does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that the conduct of such person was unlawful.

21.5

Expenses, including legal fees, incurred by a Director or a former Director in defending any legal, administrative or investigative proceedings may be paid by the Company in advance of the final disposal of such proceedings upon receipt of an undertaking given by or on behalf of the Director or former Director to repay the amount if it shall ultimately be determined that the Director or former Director is not entitled to be indemnified by the Company in accordance with Article 21.1.

21.6

The indemnification and advancement of expenses provided by or granted pursuant to this Article is not exclusive of any other rights to which the person seeking indemnification or advancement of expenses may be entitled under any agreement, resolution of the Shareholders, resolution of the Directors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a Director.

21.7

If a person referred to in Article 21.1 has been successful in defence of any proceedings referred to in Article 21.1, that person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by such person in connection with the proceedings.

21.8

The Company may purchase and maintain insurance in relation to any person who is or was a Director, officer or liquidator of the Company, or who at the request of the Company is or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any liability asserted against that person and incurred by that person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles.

22.

Records

22.1	The Company shall keep the following documents at the office of its registered agent –

22.1.1

copies of the Memorandum and the Articles;

22.1.2

the Register of Members, or a copy of the register of members;

178

22.1.3

the register of Directors, or a copy of the register of Directors;

22.1.4

the register of charges, or a copy of the register of charges;

22.1.5

copies of all notices and other documents filed by the Company with the Registrar in the previous 6 years;

22.1.6

any accounting records that it is required to keep under the Act; and

22.1.7

if either the Register of Members or register of Directors does not show a person’s residential address, a separate record of such person’s residential address.

22.2	Unless the Board determines otherwise, the Company shall keep the original Register of Members and original register of Directors at the office of its registered agent.

22.3	If the Company maintains only a copy of the Register of Members or a copy of the register of Directors at the office of its registered agent, it shall –

22.3.1

provide the registered agent with a written record of the physical address of the place or places at which the original Register of Members or the original register of Directors is kept; and

22.3.2

within 14 days of any change to either register, notify the registered agent in writing of the change.

22.4	The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the Isle of Man, as the Directors may determine –

22.4.1

minutes of Shareholders’ meetings and resolutions of the Shareholders or of any Class of Shareholders; and

22.4.2

minutes of Board meetings and resolutions of the Directors and committees of Directors.

22.5	If the records referred to in Article 22.4 are not kept at the office of the Company’s registered agent, the Company shall –

22.5.1

provide the registered agent with a written record of the physical address of the place of places at which such records are kept; and

22.5.2

if the place at which any such records are kept is changed, provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.

22.6	The records kept by the Company under this Article shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act 2000.

179

23.

Register of Charges

The Company shall maintain at the office of its registered agent a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company over any property of the Company –

23.1	the date of creation of the charge or, if the charge is a charge existing on property acquired by the Company, the date on which the property was acquired;

23.2	a short description of the liability secured by the charge;

23.3	a short description of the property charged;

23.4	the name and address of the chargee;

23.5	if there is a trustee for the security, the name and address of such trustee;

23.6	details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge;

23.7	any variation in the terms of the charge; and

23.8	if any charge ceases to affect the property of the Company.

24.

Seal

A Seal may be adopted by the Company by resolution of the Directors. The Directors shall provide for the safe custody of the Seal and for an imprint of it to be kept at the office of its registered agent. The Seal, when affixed to any written instrument, shall be witnessed and attested to by the signature of any one Director or other person so authorised from time to time by the Directors.

25.

Accounts and Audit

25.1	The Company shall keep reliable accounting records which correctly explain the Company’s transactions, enable the financial position of the Company to be determined with reasonable accuracy at any time and allow financial statements to be prepared.

25.2

The Company may by resolution of the Shareholders call for the Board to prepare financial statements. Such financial statements shall comprise a statement recording the assets and liabilities of the Company and a statement recording the receipts, payments and other financial transactions undertaken by the Company together with such notes as may be necessary for a reasonable understanding of such statements.

25.3	The Company may by resolution of the Shareholders call for the financial statements to be examined by an auditor. Articles 25.4 to 25.8 only apply where the Shareholders have resolved that they shall so apply.

25.4	The first auditor shall be appointed by resolution of the Directors. Subsequent auditors shall be appointed by resolution of the Shareholders or by resolution of the Directors. An auditor may be removed by resolution of the Shareholders.

180

25.5	The auditor may be a Shareholder, but no Director or other officer shall be eligible to be an auditor of the Company during their continuance in office.

25.6	The remuneration of the auditor of the Company may be fixed by resolution of the Directors.

25.7	The auditor shall examine the financial statements and shall state in a written report whether or not –

25.7.1

in the opinion of the auditor, the financial statements give a true and fair view respectively of the receipts, payments and other transactions undertaken by the Company for the period covered by the financial statements, and of the assets and liabilities of the Company at the end of that period; and

25.7.2

all the information and explanations required by the auditor have been obtained.

25.8

Every auditor shall have a right of access at all times to the accounting records and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanations as such auditor thinks necessary for the performance of the auditor’s duties.

26.

Notices

26.1	Any notice, information or written statement to be given by the Company to Shareholders may be given by personal service or by mail addressed to each Shareholder at the address shown in the register of members.

26.2

Proof that an envelope containing such notice, information or written statement was properly addressed, pre-paid and posted shall be conclusive evidence that it was given by mail and such notice, information or written statement shall be deemed to be given at the expiration of 48 hours after the envelope containing it was posted.

26.3	Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it with, or by sending it by registered mail to, the registered office or registered agent of the Company.

26.4

Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.

181

27.

Discontinuance

The Company may apply to the Registrar for consent to be continued in a country or territory outside the Isle of Man in accordance with section 167 of the Act.

28.

Re-registration

The Company may apply to the Registrar under section 143 of the Act to re-register as a company of another type specified in section 1 of the Act. The Company may only re-register as a company limited by guarantee or an unlimited company without shares if, upon re-registration, it shall have no Shares in issue.

29.

Merger or Consolidation

The Company may merge or consolidate with other companies in accordance with section 153 of the Act.

30.

Arrangements

The Company may make arrangements in accordance with section 157 of the Act.

31.

Voluntary Winding Up

31.1	The Company may by a resolution of the Shareholders resolve that the Company be wound up voluntarily.

31.2

If the Company is being wound up, the liquidator may, with the sanction of a resolution of the Shareholders, divide among the Shareholders in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the Shareholders or the shareholders of different Classes. The liquidator may, with the sanction of a resolution of the Shareholders, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the Shareholders as the liquidator with the like sanction determines, but no Shareholder shall be compelled to accept any assets upon which there is a liability.

32.

Amendment of the Memorandum or Articles

The Company may amend the Memorandum or the Articles by resolution of the Shareholders or, if so authorised by the Memorandum, by resolution of the Directors, save that no amendment may be made by resolution of the Directors –

32.1	to restrict the rights or powers of the Shareholders to amend the Memorandum or Articles;

32.2	to change the majority of the Voting Rights of the Shareholders required to be exercised to pass a resolution to amend the Memorandum or Articles;

32.3	in circumstances where the Memorandum or Articles cannot be amended by the Shareholders;

32.4	to vary the rights attaching to any Shares of a particular Class; or

32.5	to this Article.

182

Exhibit A-4

Form of Letter of Transmittal

[INTENTIONALLY DELETED]

183

Exhibit B-1

Condition Requirement

[INTENTIONALLY DELETED]

184

Exhibit B-2

Initial Deposit Amount

$50,000,000.

185

Exhibit B-3

Initial Long Stop Date

120 days following the date of this Deed.

186

Exhibit B-4

Final Long Stop Date

December 31, 2016.

187

Exhibit B-5

Refund Threshold

[INTENTIONALLY DELETED]

188

Exhibit C

Deferred Payment Adjustment

[INTENTIONALLY DELETED]

189

EXHIBIT E

List of Senior Officer Agreements

[INTENTIONALLY DELETED]

190

EXHIBIT G

2014 Business Plan

[INTENTIONALLY DELETED]

191

EXHIBIT H

Form of

Completion Certificate

Pursuant to Clause 3.2 of that certain Deed, dated as of June , 2014 (the “Deed”), by and among Amaya Holdings B.V., a limited liability company incorporated under the laws of the Netherlands (“Buyer”), Oldford, an Isle of Man company limited by shares (“Oldford”), the Warranting Sellers and Igal Mark Scheinberg, in his capacity as Sellers’ Representative, this Completion Certificate has been prepared by Oldford and delivered to Buyer. The undersigned, being Oldford’s chief financial officer, does hereby certify, in his capacity as chief financial officer and not individually, to Buyer that the attached Exhibit A sets forth (i) the Estimated Debt, (ii) the Estimated Net Working Capital and (iii) the Estimated Reference Working Capital Amount, in each case of the immediately preceding clauses (i) and (ii), in accordance with the Estimated Completion Balance Sheet that has been delivered to Buyer, and, in the case of the Estimated Net Working Capital and the Estimated Reference Working Capital Amount, in accordance with the Net Working Capital and Other Adjustments Calculation. Capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Deed.


OLDFORD GROUP LIMITED

By:
Name:		Michael Hazel
Title:		Chief Financial Officer
Dated:

192

Exhibit A


Estimated Debt		$

Estimated Net Working Capital		$

Estimated Reference Working Capital Amount		$

Estimated Other Adjustments Amount		$

193

EXHIBIT I

Form of Indemnity Escrow Agreement

[INTENTIONALLY DELETED]

194

EXHIBIT K

Form of

Final Completion Statement

Pursuant to Clause 3.5.1(b) of that certain Deed, dated as of June , 2014 (the “Deed”), by and among Amaya Holdings B.V., a limited liability company incorporated under the laws of the Netherlands (“Buyer”), Oldford, an Isle of Man company limited by shares (“Oldford”), the Warranting Sellers, and Igal Mark Scheinberg, in his capacity as Sellers’ Representative, this Final Completion Statement has been prepared by Buyer and delivered to Sellers’ Representative. The undersigned, being Buyer’s chief financial officer, does hereby certify, in his capacity as chief financial officer and not individually, to Sellers’ Representative that the attached Exhibit A sets forth (i) the Actual Debt, (ii) the Actual Net Working Capital and (iii) the Actual Reference Working Capital Amount, in each case of the immediately preceding clauses (i) and (ii), in accordance with the Completion Balance Sheet that has been delivered to Sellers’ Representative, and, in the case of the Actual Net Working Capital and the Actual Reference Working Capital Amount, in accordance with the Net Working Capital and Other Adjustments Calculation. Capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Deed.


BUYER

By:
Name:		Daniel Sebag
Title:		Chief Financial Officer
Dated:

195

Exhibit A


Actual Debt		$

Actual Net Working Capital		$

Actual Reference Working Capital Amount		$

Actual Other Adjustments Amount		$

196

EXHIBIT L

Form of Indemnity Letters

To be entered into by the following persons:

[INTENTIONALLY DELETED]

197

EXHIBIT N

Non-Disparaged Persons

[INTENTIONALLY DELETED]

198

Exhibit P

List of Resigning Directors and Officers of the Oldford Group Companies

1.	Resignations as Directors of the applicable Oldford Group Companies, and persons whom the Oldford Group Companies are entitled to appoint as directors of other persons (e.g., Joint Ventures, Investments, etc.):

[INTENTIONALLY DELETED]

2.	Resignations as Officers and Employees of the applicable Oldford Group Companies

[INTENTIONALLY DELETED]

199

Exhibit 3.1.1(a)

Jurisdictions In Which Threats Are Applicable

[INTENTIONALLY DELETED]

200

Exhibit 3.1.1(b)

Excluded Jurisdictions

[INTENTIONALLY DELETED]

201

Exhibit 3.1.3

Relevant Authority Consents

1.	Consents by the applicable Relevant Authorities will be required in connection with the Merger, or the approval of the transfer of the Gaming Licence in the following jurisdictions(*):

(a)

Malta

(b)

Denmark

(c)

Estonia

(d)

Bulgaria

(e)

France

(f)

Isle of Man

(g)

United Kingdom

[INTENTIONALLY DELETED]

2.	The shareholders of Buyer Parent shall have approved the Contemplated Transactions, including the Merger, at a special meeting of Buyer Parent’s shareholders.

3.	The Toronto Stock Exchange (TSX) shall have approved the Contemplated Transactions.

202

Exhibit 3.1.3

Jurisdictions where Buyer is Licensed and the Oldford Group Companies Are Not

[INTENTIONALLY DELETED]

203

EX-99.50

Exhibit 99.50

EXECUTION VERSION

VOTING SUPPORT AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of June 12, 2014

BETWEEN:

AMAYA GAMING GROUP INC., a corporation existing under the laws of the Province of Québec (the “Company”)

- and -

DANIEL SEBAG (the “Shareholder”)

RECITALS:

A.	The Shareholder is the beneficial owner of, or has control or direction over, the Subject Securities.

The Shareholder understands that the Company has entered into a purchase agreement with, inter alios, Oldford Group Limited (“Oldford”), of even date herewith, pursuant to which the Company has agreed to purchase all of the issued and outstanding shares in the capital of Oldford from the holders thereof (the “Purchase Agreement”).

C.	This Agreement sets out the terms and conditions of the agreement of the Shareholder to abide by the covenants in respect of the Subject Securities and the other restrictions and covenants set forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged) the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

1.1

Definitions

Capitalized terms used herein and not otherwise defined have the meanings ascribed thereto in the Purchase Agreement. In this Agreement, including the recitals:

“affiliate” has the meaning ascribed thereto in National Instrument 45-106 – Prospectus and Registration Exemptions;

“Board of Directors” means the board of directors of the Company;

“Purchase Agreement” has the meaning ascribed thereto in Recital B;

“Business Day” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Montréal, Québec;

“Common Shares” means common shares in the share capital of the Company;

“Company Circular” means the notice of the Company Meeting and the accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the shareholders of the Company in connection with the Company Meeting, as amended, supplemented or otherwise modified from time to time;

“Company Meeting” means the annual and special meeting of shareholders of the Company, including any adjournment or postponement of such thereof, to be held on or about July 30, 2014;

“Expiry Time” has the meaning ascribed thereto in Section 3.1(a);

“Governmental Authority” means (i) any international, multinational, national, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, ministry, agency or instrumentality, domestic or foreign, (ii) any subdivision, agent, commission, board or authority of any of the above, (iii) any quasi-governmental or private body exercising any administrative, regulatory, expropriation or taxing authority under or for the account of any of the foregoing, or (iv) any stock exchange;

“Law” means any law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, by-law, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Authority and, to the extent that they have the force of law or are considered by such Governmental Authority as requiring compliance as if having the force of law, policies, guidelines, notices and protocols of any Governmental Authority, as amended unless expressly specified otherwise, and the term “applicable Law”, with respect to any Person, means any such Law that is binding upon or applicable to such Person or its business, undertaking, property or securities;

“Options” means the options to purchase Common Shares issued by the Company in accordance with the terms of the Stock Option Plan;

“Person” includes any individual, partnership, association, joint venture, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government, syndicate or other entity, whether or not having legal status; and

“Stock Option Plan” means the stock option plan of the Company, as amended and restated from time to time;

“Subject Securities” means the Common Shares and Options listed on Schedule A hereto and any Common Share acquired by the Shareholder or any of its affiliates subsequent to the date hereof, and shall include all securities which such Subject Securities may be converted into, exchanged for or otherwise changed into.

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1.2

Headings, etc.

The division of this Agreement into Articles and Sections and the insertion of the recitals and headings are for convenient reference only and do not affect the construction or interpretation of this Agreement.

1.3

Currency

All references to dollars or to $ are references to Canadian dollars, unless specified otherwise.

1.4

Gender and Number

Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa.

1.5

Certain Phrases

The words (i) “including”, “includes” and “include” mean “including (or includes or include) without limitation”, (ii) “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”, and (iii) unless stated otherwise, “Article”, “Section”, and “Schedule” followed by a number or letter mean and refer to the specified Article or Section of or Schedule to this Agreement.

1.6

Date for any Action

A period of time is to be computed as beginning on the day following the event that began the period and ending at 5:00 p.m. on the last day of the period, if the last day of the period is a Business Day, or at 5:00 p.m. on the next Business Day if the last day of the period is not a Business Day. If the date on which any action is required or permitted to be taken under this Agreement is not a Business Day, such action shall be required or permitted to be taken on the next succeeding day which is a Business Day.

1.7

Governing Law

This Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Québec and the federal laws of Canada applicable therein. Each party irrevocably submits to the non-exclusive jurisdiction of the Québec courts situated in the City of Montréal and waives objection to the venue of any proceeding in such court or that such court provides an inconvenient forum.

1.8

Incorporation of Schedule

Schedule A attached hereto shall, for all purposes hereof, form an integral part of this Agreement.

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.1

Representations and Warranties of the Shareholder

The Shareholder represents and warrants to the Company the matters set out below:

(a)

the Shareholder has all necessary power, authority, capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement. This Agreement has been duly executed and delivered by the Shareholder and constitutes a legal, valid and binding obligation of the Shareholder enforceable against the Shareholder in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction;

(b)

the Shareholder is the registered and/or beneficial owner of all of the Subject Securities set forth opposite its name in Schedule A;

(c)

the Shareholder is, and, as of the date hereof and subject to Section 3.1(a)(i), will continue to be until the Expiry Time, the sole beneficial owner of all of the Subject Securities, with good and marketable title thereto, free and clear of all Encumbrances;

(d)

the Shareholder has the sole right to sell and vote or direct the sale and voting of the Subject Securities;

(e)

no consent, approval, order or authorization of, or declaration or filing with, any Person is required to be obtained by the Shareholder in connection with the execution and delivery of this Agreement and the performance by the Shareholder of its obligations under this Agreement;

(f)

to the knowledge of the Shareholder, there is no proceeding, claim or investigation pending before any Governmental Authority, or threatened against the Shareholder or any of its affiliates that, individually or in the aggregate, could reasonably be expected to have an adverse effect on such Shareholder’s ability to execute and deliver this Agreement and to perform its obligations contemplated by this Agreement;

(g)

none of the Subject Securities are subject to any proxy, voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of any of the Company’s shareholders or give consents or approvals of any kind; and

(h)

none of the execution and delivery by the Shareholder of this Agreement or the completion of the transactions contemplated hereby or the compliance by the Shareholder with its obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of

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facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any constating documents of the Shareholder; (ii) any judgment, decree, order or award of any Governmental Authority, or (iii) any applicable Laws.

2.2

Representations and Warranties of the Company

The Company represents and warrants to the Shareholder the matters set out below:

(a)

the Company is a corporation duly incorporated and validly existing under the laws of the Province of Québec and has all necessary corporate power, authority and capacity to enter into this Agreement. The execution and delivery of this Agreement and the performance of this Agreement have been authorized by all necessary corporate action on the part of the Company. This Agreement constitutes a legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction;

(b)

none of the execution and delivery by the Company of this Agreement or the completion of the transactions contemplated hereby or the compliance by the Company with its obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any constating documents of the Company, (ii) any judgment, decree, order or award of any Governmental Authority, or (iii) any applicable Laws;

(c)

no consent, approval, order or authorization of, or declaration or filing with, any Person is required to be obtained by the Company in connection with the execution and delivery of this Agreement, the performance by the Company of its obligations under this Agreement; and

(d)

to the knowledge of the Company, there is no proceeding, claim or investigation pending before any Governmental Authority, or threatened against the Company or any of its affiliates that, individually or in the aggregate, could reasonably be expected to have an adverse effect on the Company’s ability to execute and deliver this Agreement and to perform its obligations contemplated by this Agreement.

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ARTICLE 3

COVENANTS

3.1

Covenants of the Shareholder

(a)

The Shareholder hereby covenants with the Company that from the date of this Agreement until the termination of this Agreement in accordance with its terms (such termination being the “Expiry Time”), the Shareholder shall not:

(i)

sell, transfer, gift, assign, convey, pledge, hypothecate, encumber, option or otherwise dispose of any right or interest in any of the Subject Securities, other than (A) transfers to an affiliate of the Shareholder provided only that, prior to any such transfer, such affiliate enters into a written agreement with the Company to be bound by the terms of this Agreement in all respects and to the same extent as the Shareholder is bound and provided also that the Shareholder will solidarily guarantee all the obligations of such affiliate under such agreement, and (B) the exercise of Options in accordance with their terms for Common Shares that will become subject to this Agreement as if they were Subject Securities owned by the Shareholder on the date hereof, without having first obtained the prior written consent of the Company;

(ii)

enter into any agreement, arrangement, commitment or understanding providing for an action prohibited by Section 3.1(a)(i), without having first obtained the prior written consent of the Company; or

(iii)

other than as set forth herein, grant or agree to grant any proxies or powers of attorney, deposit any Subject Securities into a voting trust or pooling agreement, or enter into a voting agreement, commitment, understanding or arrangement, oral or written, with respect to the voting of any Subject Securities without the prior written consent of the Company.

(b)

The Shareholder hereby covenants, undertakes and agrees from time to time, until the Expiry Time, to vote (or cause to be voted) all the Subject Securities at the Company Meeting in accordance with all recommendations to the shareholders of the Company made by the Board of Directors as referenced in the Company Circular (the “Board Recommendations”) in connection with the approval, consent, ratification and adoption of special or ordinary resolutions of the shareholders of the Company, as the case may be, including, but not limited to, the following:

(i)

authorizing the amendment to the articles of the Company to create a new class of convertible preferred shares (the “Preferred Shares”);

(ii)

authorizing certain conversion ratio adjustments and mechanisms included in the share terms of the Preferred Shares;

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(iii)

approving the issuance of 12.75 million common share purchase warrants by the Company, each entitling the holder thereof to purchase one Common Share at an exercise price of $0.01 for a term of ten years;

(iv)

approving certain option grants to employees of a subsidiary of Oldford at an exercise price of CDN$20 following closing of the acquisition Oldford pursuant to the terms of the Purchase Agreement (the “Contemplated Acquisition”);

(v)

approving the price reservation for the Common Shares issuable pursuant to the various financings (the “Financings”) to be completed in order to finance a portion of the purchase price payable for the Contemplated Acquisition; and

(vi)

approving the potential material effect on control of the Company that may result from the participation by a key investor in the Financings;

the whole as will be more fully set out in the Company Circular.

In connection with the foregoing, subject to this Section 3.1(b), the Shareholder hereby agrees to deposit a proxy, duly completed and executed in respect of all of the Common Shares held by it promptly following the mailing of the Company Circular, and in any event at least 10 days prior to the Company Meeting, voting all such Common Shares in accordance with the Board Recommendations to be set out in the Company Circular. The Shareholder hereby agrees that neither it nor any Person on its behalf will take any action to withdraw, amend, revoke or invalidate any proxy deposited by the Shareholder pursuant to this Agreement notwithstanding any statutory or other rights or otherwise which the Shareholder might have unless this Agreement has at such time been previously terminated in accordance with Section 4.1.

(c)

The Shareholder hereby consents to:

(i)

details of this Agreement being set out in any press release, information circular, including the Company Circular produced by the Company, or any of its affiliates in connection with the transactions contemplated by this Agreement and the Purchase Agreement, provided that to the extent any such filing contains disclosure regarding the Shareholder or its affiliates, the Shareholder has been provided with a reasonable opportunity to review and comment on such disclosure and reasonable consideration has been given by the Company to any such comments; and; and

(ii)

this Agreement being made publicly available, including by filing on SEDAR.

(d)

Except as required by applicable Law or applicable stock exchange requirements, the Shareholder shall not make any public announcement or statement with respect to the transactions contemplated herein or pursuant to the Purchase Agreement without the prior written approval of the Company.

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ARTICLE 4

GENERAL

4.1

Termination

This Agreement shall terminate and be of no further force or effect upon the earliest of:

(a)

the mutual agreement in writing of the Company and the Shareholder;

(b)

the termination of the Purchase Agreement in accordance with its terms; or

(c)

automatically, without further action by the parties, 60 days following the date of the Company Meeting.

4.2

Time of the Essence

Time is of the essence in this Agreement.

4.3

Effect of Termination

If this Agreement is terminated in accordance with the provisions of Section 4.1, no party shall have any further liability to perform its obligations under this Agreement except as expressly contemplated by this Agreement, and provided that neither the termination of this Agreement nor anything contained in Section 4.1 shall relieve any party from any liability for any breach by it of this Agreement, including from any inaccuracy in its representations and warranties and any non-performance by it of its covenants made herein.

4.4

Fiduciary Duty

Notwithstanding any provision of this Agreement to the contrary, the Shareholder or a shareholder, officer or director of the Shareholder that is a director or officer of the Company shall not be limited or restricted in any way whatsoever in the exercise of his fiduciary duties as a director or officer of the Company. The Company further agrees that the Shareholder is not making any agreement or understanding herein in any capacity other than in his or its capacity as a Shareholder of the Company.

4.5

Waiver; Amendment

No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the party to be bound by the waiver. A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right. Each party hereto agrees and confirms that any provision of this Agreement may be amended if, and only if, such amendment is in writing and signed by the Shareholder and the Company.

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4.6

Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the transactions contemplated by this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties.

4.7

Notices

Any notice, or other communication given regarding the matters contemplated by this Agreement must be in writing, sent by personal delivery, courier or facsimile (but not by electronic mail) and addressed:

(a)

if to the Company:

Amaya Gaming Group Inc.

7600 TransCanada Hwy

Pointe-Claire, QC

H9R 1C8

Attention: David Baazov

Facsimile: (514) 744-5114

with a copy (which shall not constitute notice) to:

Osler, Hoskin & Harcourt LLP

1000 De La Gauchetière St. W.

Suite 2100

Montreal, QC

H3B 4W5

Attention: Eric Levy

Telephone: (514) 904-8177

Facsimile: (514) 904-8101

(b)

if to the Shareholder:

Daniel Sebag

[INTENTIONALLY DELETED]

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Sending a copy of a notice or other communication to a party’s legal counsel as contemplated above is for information purposes only and does not constitute delivery of the notice or other communication to that party. The failure to send a copy of a notice or other communication to legal counsel does not invalidate delivery of that notice or other communication to a party.

4.8

Severability

If any provision of this Agreement is determined to be illegal, invalid or unenforceable by any court of competent jurisdiction, that provision will be severed from this Agreement and the remaining provisions shall remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

4.9

Successors and Assigns

(a)

This Agreement becomes effective only when executed by the Company and the Shareholder. After that time, it will be binding upon and enure to the benefit of the Company and the Shareholder and their respective successors, permitted assigns and legal personal representatives.

(b)

Neither this Agreement nor any of the rights or obligations under this Agreement are assignable or transferable by any party without the prior written consent of the other parties.

4.10

Expenses

Each party shall pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement.

4.11

Independent Legal Advice

Each of the parties hereby acknowledges that it has been afforded the opportunity to obtain independent legal advice and confirms by the execution and delivery of this Agreement that they have either done so or waived their right to do so in connection with the entering into of this Agreement.

4.12

Further Assurances

The parties hereto shall, with reasonable diligence, do all things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each party shall provide such further documents or instruments required by the other party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.

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4.13

Language

The parties expressly acknowledge that they have requested that this Agreement and all ancillary and related documents thereto be drafted in the English language only. Les parties aux présentes reconnaissent avoir exigé que la présente entente et tous les documents qui y sont accessoires soient rédigés en anglais seulement.

4.14

Execution and Delivery

This Agreement may be executed by the parties in counterparts (including counterparts by facsimile or other electronic means) and all such counterparts taken together shall be deemed to constitute one and the same instrument. The parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the parties.

[Remainder of page intentionally left blank. Signature page follows.]

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IN WITNESS OF WHICH the parties have executed this Agreement as of the date first written above.


COMPANY:

	AMAYA GAMING GROUP INC.

	By:	(s) Robert Mincoff
		Name:	Robert Mincoff

		Title:	Assistant Secretary

SHAREHOLDER:

	By:	(s) Daniel Sebag
		Name:	Daniel Sebag

		Title:	Chief Financial Officer

[Signature Page to Voting Support Agreement]

Voting Support Agreement

S-1

SCHEDULE A

SUBJECT SECURITIES


REGISTERED OWNER	BENEFICIAL OWNER	COMMON SHARES		OPTIONS
Daniel Sebag	Daniel Sebag		350,000		400,000

EX-99.51

Exhibit 99.51

EXECUTION VERSION

VOTING SUPPORT AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of June 12, 2014

BETWEEN:

AMAYA GAMING GROUP INC., a corporation existing under the laws of the Province of Québec (the “Company”)

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MARLON GOLDSTEIN (the “Shareholder”)

RECITALS:

A.	The Shareholder is the beneficial owner of, or has control or direction over, the Subject Securities.

C.	This Agreement sets out the terms and conditions of the agreement of the Shareholder to abide by the covenants in respect of the Subject Securities and the other restrictions and covenants set forth herein.