sc13dza

0000950137-09-001911.txt : 20090316 0000950137-09-001911.hdr.sgml : 20090316 20090316172918 ACCESSION NUMBER: 0000950137-09-001911 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20090316 DATE AS OF CHANGE: 20090316 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Aziz Javaid CENTRAL INDEX KEY: 0001452070 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: APARTMENT 426, 6TH FLOOR, BLOCK D CITY: 6 IMPASSE DE LA FONTAINE STATE: O9 ZIP: 052917 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CRYPTOLOGIC LTD CENTRAL INDEX KEY: 0001094036 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59141 FILM NUMBER: 09685620 BUSINESS ADDRESS: STREET 1: MARINE HOUSE, 3RD FLOOR STREET 2: CLANWILLIAM PLACE CITY: DUBLIN STATE: L2 ZIP: 2 BUSINESS PHONE: 416-545-1455 MAIL ADDRESS: STREET 1: MARINE HOUSE, 3RD FLOOR STREET 2: CLANWILLIAM PLACE CITY: DUBLIN STATE: L2 ZIP: 2 FORMER COMPANY: FORMER CONFORMED NAME: CRYPTOLOGIC INC DATE OF NAME CHANGE: 19990827 SC 13D/A 1 c50117sc13dza.htm SC 13D/A sc13dza

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)

(Amendment No. 5 )*

Cryptologic Limited

(Name of Issuer)

Common Shares

(Title of Class of Securities)

G3159C109

(CUSIP Number)

Michael M. Froy
Sonnonschein Nath & Rosenthal LLP
7800 Sears Tower
Chicago, Illinois 60606
(312) 876-8000

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

March 16, 2009

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		G3159C109


1	NAMES OF REPORTING PERSONS Javaid Aziz


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	PF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	UK

		7	SOLE VOTING POWER

NUMBER OF			1,388,994

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			0

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			1,388,994

WITH		10	SHARED DISPOSITIVE POWER

			0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	1,388,994

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	10.9%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	IN

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CUSIP No. G3159C109

ITEM 1. SECURITY AND ISSUER

This Amendment No. 5 to this statement on Schedule 13D (this “Schedule 13D”) relates to the Common Shares, no par value per share (the “Common Shares”), of Cryptologic Limited, a Guernsey, Channel Islands corporation (the “Issuer” or the “Company”), the principal executive offices of which are located at Marine House, 3rd Floor, Clanwilliam Place, Dublin 2, Ireland. This Amendment No. 5 amends and restates in full each of the items set forth below. Terms used but not defined in this Amendment No. 5 shall have the respective meanings given to such terms in the Schedule 13D as originally filed with the Securities and Exchange Commission on December 15, 2008 (“Original 13D”).

ITEM 4. PURPOSE OF TRANSACTION

The Reporting Person acquired beneficial ownership of the Common Shares disclosed herein as part of his investment activities.

On December 4, 2008, Mr. Aziz entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Pabrai Investment Fund 4, L.P. (“PIF4”), Pabrai Investment Fund II, L.P. (“PIF2”), Pabrai Investment Fund 3, Ltd. (“PIF3”) and Dalal Street LLC (“Dalal Street”, and collectively with PIF4, PIF3 and PIF2, the “Sellers”). Pursuant to the Stock Purchase Agreement, Mr. Aziz acquired from the Sellers 550,000 Common Shares and the option described in the following sentence for an aggregate purchase price of $1,265,000. Mr. Aziz also acquired an option (the “Option”) to purchase up to 489,394 Common Shares of the Company (collectively, the “Option Shares”) from the Sellers on the following terms and conditions: (a) beginning on December 4, 2008 and continuing through December 17, 2008, Mr. Aziz had the option to purchase all or a portion of the Option Shares, in increments of 10,000 shares, at a price equal to $2.12 per share; and (b) beginning on December 18, 2008 and continuing through the termination of the parties’ obligations under the Stock Purchase Agreement on January 30, 2009, Mr. Aziz had the option to purchase all or a portion of any remaining Option Shares, in increments of 10,000 shares, at a price equal to $2.12 per share; provided, however , that if Mr. Aziz exercised such option on a date when the closing sale price per share of the Common Shares as reported on the NASDAQ on such date (the “Closing Price”) was greater than $2.12 per share (the amount of such difference being called the “Excess Amount”), then the purchase price per share would be equal to (i) $2.12 plus (ii) 50% of the Excess Amount. In addition, beginning on December 18, 2008 and continuing through the termination of the parties’ obligations under the Stock Purchase Agreement on January 30, 2009, the Sellers were required, prior to selling any such Common Shares to any individual or entity other than Mr. Aziz, to first provide Mr. Aziz with an opportunity to purchase such shares on terms and conditions satisfactory to the Sellers. The foregoing summary of the Stock Purchase Agreement is qualified in its entirety by reference to that document, a copy of which is filed as Exhibit 1 to this Schedule 13D and is incorporated by reference herein.

On December 17, 2008, the Reporting Person partially exercised the Option and acquired 320,000 Common Shares from the Sellers for an aggregate purchase price of $678,400. Immediately following such exercise, the Option remained exercisable for 169,394 Option Shares on the terms summarized above.

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CUSIP No. G3159C109

On January 30, 2009, in accordance with Section (3)(b) of the Stock Purchase Agreement, the Reporting Persons acquired 168,994 Common Shares from the Sellers for an aggregate purchase price of $625,278. The Reporting Person and the Sellers also agreed to terminate all rights, obligations and agreements under the Stock Purchase Agreement (including the Option) as of that date.

The Reporting Person expects to continuously review his investment in the Issuer and, depending on various factors, including but not limited to, his evaluation of the business and prospects of the Issuer, the price of the Common Shares, the terms and conditions of the transaction, prevailing market conditions and such other considerations as the Reporting Person deems relevant, may at any time or from time to time, and subject to any applicable regulatory requirements, acquire additional Common Shares or other securities convertible into or exercisable or exchangeable for Common Shares from time to time on the open market, in privately-negotiated transactions, or upon the exercise or conversion of securities convertible into or exercisable or exchangeable for Common Shares.

The Reporting Person also may, at any time, subject to compliance with any applicable regulatory requirements, dispose of some or all of his Common Shares, or such other securities he owns or may subsequently acquire depending on various factors, including but not limited to, his evaluation of the business and prospects of the Issuer, the price of the shares, the terms and conditions of the transaction and prevailing market conditions, as well as liquidity and diversification objectives. In addition, the Reporting Person may, from time to time, enter into stock trading plans intended to satisfy the requirements of Securities and Exchange Commission Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (“Exchange Act”).

The Reporting Person, together with his representatives, intends, at any time and from time to time, to engage in a proactive dialogue with members of the Board of Directors and management of the Issuer, as well as with other stockholders and other interested parties, regarding the undervaluation and strategic configuration of the Issuer, potential strategic alternatives available to the Issuer to increase stockholder value and other matters relating to the Reporting Persons’ investment in the Common Shares of the Issuer, including, without limitation, the business, operations, governance, management, strategy and future plans of the Issuer. The Reporting Person also intends to participate in and influence the affairs of the Issuer through the exercise of his voting rights with respect to his shares of Issuer stock.

On December 4 and 5, 2008, the Reporting Person sent the Chairman of the Board of the Issuer correspondence, a copy of which is attached as Exhibit 2 hereto and incorporated herein by reference, expressing his view that the Company should promptly execute on a recovery plan designed to stabilize revenues, streamline the Issuer’s size and operations, achieve significant cost reductions, more effectively manage cash flows, review and simplify the Issuer’s legal, tax and management structure, reduce the number of locations from which the Issuer conducts its operations, reduce the number of exchanges on which the Common Shares are traded, and take other steps to improve the Issuer’s operating and financial performance. The Reporting Person also expressed his desire, as of that date, to serve on the Board of Directors of the Issuer along with a second appointee, with such persons replacing two existing directors. On December 23, 2008, the Company issued a press release expressing its belief that many of the issues raised by the Reporting Person were being addressed by the Issuer’s management and indicating that the Issuer’s Board of Directors had determined to reject the request for greater shareholder representation on the Board via the proposed addition of the Reporting Person and a second

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CUSIP No. G3159C109

appointee. The Reporting Person intends to continue this dialogue and closely monitor his investment in the Issuer.

On January 9, 2009, the Reporting Person sent the Chairman of the Board of the Issuer correspondence, a copy of which is attached as Exhibit 3 hereto and incorporated herein by reference, updating and expanding his views and analysis with respect to the Company’s operations and strategic direction. The Reporting Person also reiterated his desire to serve on the Board of Directors of the Issuer along with a second appointee, with such persons to replace two existing directors.

On February 18, 2009, the Reporting Person sent correspondence and notices to the Board of Directors of the Issuer, copies of which are attached as Exhibit 4 hereto and incorporated herein by reference. The notices were sent pursuant to Guernsey law and request that the Board of Directors of the Issuer call an extraordinary general meeting (“EGM”) of the stockholders of the Issuer, for the purposes of considering and voting on certain resolutions specified in the notices, including resolutions to (1) remove an existing director (Mr. Yap Wai Ming) effective immediately, (2) appoint the Reporting Person as a director of the Issuer, (3) have the Board of Directors of the Issuer promptly implement arrangements to improve corporate governance and independence, including that the Board of Directors of the Issuer be comprised of a majority of directors who are independent and unrelated to the Issuer and that the existing Chairman of the Board resign from such position and be replaced by a director who is independent and unrelated to the Company and (4) cancel immediately employee share options returned to the Company following the end of an individual’s employment (and/or notice period) with the Company with no such returned share options to be recycled back into the share option pool for re-use.

On February 23, 2009, the Company issued a press release expressing its belief that the Reporting Person’s requisitions for an EGM of the shareholders appear insufficient to cause an EGM to be called due to Issuer’s belief that such requisitions do not relate to shares equaling a minimum of 10% of the issued and outstanding voting stock of the Issuer. The Company also announced that it had sent a letter to the Reporting Person regarding such requisitions. On February 24, 2009, the Company issued a press release and filed with the U.S. and Canadian regulatory authorities a copy of such letter. On March 4, 2009, the Reporting Person notified the Board of Directors of the Company that he does not seek to rely on the requisitions for an EGM which he sent on February 18, 2009. On March 5, 2009, the Company issued a press release stating that it would not be calling an EGM pursuant to the Reporting Person’s requisitions.

On March 16, 2009, the Reporting Person sent the Chairman of the Board of Directors of the Company correspondence, a copy of which is attached as Exhibit 5 hereto and incorporated herein by reference, expressing his view that while he owns in excess of 10% of the Common Stock of the Issuer and is able to lawfully requisition an EGM, he no longer believes an accelerated timescale for an EGM is necessary. The Reporting Person also waived his right to the EUR1.5M bonus payment payable to him in the event there is a change of control of the Company on or before April 30, 2009. The Reporting Person also updated and expanded his views and analysis with respect to the Company’s operations, strategic direction and corporate governance. The Reporting Person also reiterated his desire that the Board of Directors of the Issuer be composed of a majority of independent directors, suggesting this be accomplished through the resignation of two existing directors followed by the confirmation of replacement

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CUSIP No. G3159C109

directors at the next annual general meeting of shareholders. The Reporting Person intends to continue this dialogue and closely monitor his investment in the Issuer.

Except as indicated herein, the Reporting Person does not have any plan or proposal that related to or would result in any of the transactions or other matters specified in clauses (a) through (j) of Item 4 of Schedule 13D. The Reporting Person may, at any time and from time to time, review or reconsider his position and/or change his purpose and/or formulate plans or proposals with respect thereto.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

(a) - (b) The following table sets forth the number of Common Shares beneficially owned by the Reporting Person as of March 15, 2009, and the percentage of the outstanding Common Shares that such number represents. Beneficial ownership is determined according to the rules of the SEC and generally includes any shares over which a person possesses sole or shared voting or investment power as well as any shares that such person has the right to acquire within 60 days of the applicable date, including through the exercise of options or other rights. Common Shares not currently outstanding which are subject to options, warrants or other rights that are exercisable or convertible within 60 days after the applicable date are deemed outstanding for the purpose of calculating the percentage ownership of the person holding those options, warrants or other rights but are not treated as outstanding for the purpose of calculating the percentage ownership of any other person. Accordingly, the applicable percentage ownership for the Reporting Person is based upon the 12,719,777 Common Shares outstanding as of November 21, 2008 as reported by the Issuer in its Form 6-K filed with the SEC on December 1, 2008. Such calculation does not reflect Exchangeable Shares of the Issuer, shares subject to options held by the Reporting Person that are not exercisable within 60 days of the date of this Schedule 13D, or shares subject to options or rights held by any other person. Except as disclosed herein, the Reporting Person has sole investment and voting power with respect to the shares described below.


	Common Shares Beneficially Owned
Reporting Person	Common Shares			Option Shares		Total		Percent

Javaid Aziz		1,388,994	(1)		0		1,624,410		10.9	%


(1)		Includes 350,000 Common Shares held by the self-invested personal pension of the Reporting Person.

(c) There have been no transactions with respect to the Common Stock during the past 60 days or since the most recent filing on Schedule 13D (whichever is less) by the Reporting Person.

(d) Except as described herein, no one other than the Reporting Person has the right to receive dividends from, or the proceeds from the sale of, any of the securities of the Issuer reported on this Schedule 13D.

(e) Not applicable.

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CUSIP No. G3159C109

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

See Exhibit Index appearing following the signature page hereto, which is incorporated herein by reference.

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CUSIP No. G3159C109

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete, and correct.



Date: March 16, 2009	By:	/s/ JAVAID AZIZ
		Name:	Javaid Aziz

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CUSIP No. G3159C109

EXHIBIT INDEX


Number		Description

1.		Stock Purchase Agreement, dated as of December 4, 2008, by and between the Reporting Person and Pabrai Investment Fund 4, L.P., Pabrai Investment Fund II, L.P., Pabrai Investment Fund 3, Ltd. and Dalal Street LLC (incorporated by reference to Exhibit 1 to the Original 13D filed on December 15, 2008).

2.		Correspondence, dated December 4 and 5, 2008, from the Reporting Person to the Issuer (incorporated by reference to Exhibit 2 to the Original 13D filed on December 15, 2008).

3.		Letter, dated January 9, 2009, from the Reporting Person to the Board of Directors of the Issuer (incorporated by reference to Exhibit 3 to Amendment No. 2 to the Original 13D filed on January 9, 2009).

4.		Correspondence dated February 18, 2009, delivered by and on behalf of the Reporting Person to the Board of Directors of the Issuer (incorporated by reference to Exhibit 4 to Amendment No. 4 to the Original 13D filed on February 18, 2009).

5.		Correspondence, dated March 16, 2009, from the Reporting Person to the Issuer.

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EX-99.5 2 c50117exv99w5.htm EX-99.5 exv99w5

EXHIBIT 5

Correspondence, dated March 16, 2009, from the Reporting Person to the Issuer

16^th March 2009

Board of Directors
Cryptologic
Dublin.

Gentlemen,

I am surprised that you have not responded to my emails dated 10^th March 2009 (copied below) which is unfortunate.

There are three subjects, which would have merited a common and unified approach, which would have been to the benefit of the Company and its shareholders, which are:

	a)		The Board of Cryptologic has fuelled speculation that I do not own 10% of the voting shares of Cryptologic thus prompting the view that I was in the market as a buyer to make good on my statement that I owned 10%. As you know I do own 10% of the voting shares of Cryptologic.

	b)		As being able to requisition an EGM I can do so lawfully at any time in the future as I own in excess of 10% of the voting shares of Cryptologic.

	c)		To put me on an equal footing with all other shareholders, and not to have either real or perceived motivations which are asymmetric with other shareholders, I have decided, as a goodwill gesture, to waive the EUR 1.5M bonus payment which is payable to me in the event there is a change of control of Cryptologic on or before 30^th April 2009.

I would like to reiterate that, notwithstanding the unjustified and deplorable personal attacks on me by the Board of Cryptologic, which were devised to deflect attention from the central issue of corporate governance and board independence, I remain committed to my objective to establish best in class corporate governance at Cryptologic and to the installation of an independent Board chaired by an independent Chairman. This is of the utmost importance especially for an online gaming software company which seeks the trust of players and the general public globally, who in the past have placed bets worth $60Billion.

From my letter to you dated 9^th January 2009 the following key issues still need to be addressed by the Board of Cryptologic.

The business performance of the Company has to improve. The Board of Cryptologic have presided over three consecutive quarters of revenue decline, expense increase, operational losses and cash burn. The first quarter of 2009 has to be profitable with the second quarter

			2009 showing revenue growth and profit. Anything less is unacceptable especially as an independent Board would have ensured that appropriate actions were taken earlier to stage a recovery.

	2.		There should be immediate write-offs of failed investments and technology platforms. These non-cash write-offs could generate profits of $1M per quarter with a significant impact on earnings per share. It is regrettable but an independent Board, with no legacy interest, would have made these decisions a year ago.

	3.		There needs to be a drastic simplification of the business. The legal, tax and management structures need to be demolished and replaced with structures more in keeping with the Company’s size and volume of business. An independent Board, with no conflict of interest in terms of potential fees, would have done this earlier as part of a recovery plan.

	4.		From my email to you dated 18^th February 2009 there needs to be an independent audit of the fees for 2006 and 2007 (and potentially 2008) charged to the Company by Stikeman Keely Spiegal Pasternak to determine whether they were necessary when considered in relation to the annual fees paid to the chairman for duties performed according to his director’s contract. For this audit to have integrity it will require input from myself, which I have offered. An independent Board with an independent Chairman would not have flinched from doing this a year ago as it was requested to do.

	5.		The Board needs to be composed of a majority of Independent Directors. This requires two of the non-Independent (and non-executive directors) to leave the Board. I would suggest that the most elegant solution for the Board to consider would be to announce that these Directors (Robert Stikeman and Yap Wai Ming) have decided to retire and not to seek re-election at the next AGM, which would then give the Board the opportunity to seek appropriate replacements for confirmation at the next AGM.

In writing I would stress that my motivation for this and previous correspondence is well intentioned and is aimed to benefit the Company, its staff and shareholders.

Javaid Aziz

Email:javaid_aziz@hotmail.com

From: javaid_aziz@hotmail.com
To: bob@stikeman.to
Subject: Cryptologic Shares
Date: Tue, 10 Mar 2009 17:55:45 +0000

Bob,

I visited my bank today in Monaco to get definitive proof on the ownership of 870,000 Cryptologic shares. I attach a copy of their letter.

Moving forward, in the interests of harmony and the wider Company and shareholders interests, I would suggest we issue a jointly agreed press release to close out this chapter.

In the meantime I will hold off disclosing my email that I sent to you this morning.

Regards, Javaid.

From: javaid_aziz@hotmail.com
To: bob@stikeman.to
Subject: Email To The Board Of Cryptologic — 10th March 2009
Date: Tue, 10 Mar 2009 08:22:09 +0000

Dear Bob,

I am in receipt of your letter dated 23rd February 2009.

Firstly, I can confirm that I own beneficially, directly or indirectly, 1,388,994 voting shares (10.05%) of Cryptologic. The difference on the share register is as a result of my bank transferring 870,000 shares, that were purchased by me in December 2008 and registered in my name on the share register, from certificated form to electronic form during the period 9th February - 24th February 2009. You are aware of this change on the share register, and have acknowledged this movement of the shares on the share register. As a consequence I believe I am lawfully able to requisition an EGM, as appropriate, at any time in the future.

Secondly, all the shares that have been purchased by either myself or by my retirement/pension fund (through the trustees) have been done so properly and according to the relevant law and have been disclosed appropriately to the London Stock Exchange and Nasdaq. Many of the assumptions that you have made in your letter with regards to this activity are unfortunately erroneous and have no basis. You will appreciate, no doubt, that the affairs of Cryptologic are unnecessarily complex with listings on three exchanges, a registered office in Guernsey and an administrative HQ in Dublin.

Thirdly, you have made allegations about myself in what appears to me to be an effort to deflect attention away from the key and perfectly reasonable issues that I have raised, regarding corporate governance. I am reserving my position in relation to those allegations, as I do not wish to distract the Board and management’s attention from the task of putting the business of the Company on a sound financial footing, and addressing the problems faced by the Company in the interests of the staff and shareholders alike.

Moving forward, it would appear from the various conference calls and press comments from the management that the message that operational performance is of the utmost importance is now well understood. There have lately been several encouraging examples and visible actions e.g. the removal and non-replacement of the CTO, the reduction in the workforce of 30% and the termination of the legal services provided by Stikeman Keeley Spiegel Pasternak. I would hope that further actions will be taken, as detailed in my letter dated 9th January 2009, to accelerate the recovery of the Company.

We now need to see results, and the next few months will be crucial. The first major milestone will be whether or not the first quarter 2009 results will show that the cash burn has been stemmed. The second will be the enthusiasm and confidence with which the management will seek to persuade the shareholders and analysts that the second quarter 2009 will be a revenue growth and profitable quarter. I would hope that these will be subjects covered by the management during the forthcoming conference call on Tuesday 17th March 2009.

Notwithstanding the above, I remain of the view that the wider world needs to be convinced that the Board of Cryptologic are committed to improving corporate governance which is of the utmost importance, especially in the current economic and financial environment, and cannot be compromised. It is imperative that the Board of Cryptologic have a majority of independent directors and be chaired by a director who is demonstrably independent and “unrelated” to Cryptologic with no hint whatsoever of a potential conflict of interest.

Given the above I have decided that the objectives I had of instilling a sense of urgency into the pace of change of the operations of Cryptologic have been met and therefore an accelerated timescale for an EGM is no longer necessary. Accordingly, I do not expect the Board to convene an EGM on the basis of the requisitions lodged dated 18 February 2009.

However, the corporate governance issues that I have raised will need be addressed at the forthcoming AGM in June, in a constructive manner, for which I will put forward valid resolutions. This delay until June should enable the management to focus 100%

on the operations of the business and to deliver results, and also enable the Board of Cryptologic to have the time to take the necessary actions to become truly independent in a timely way such that the AGM is the forum where they are adopted without any major upset.

Meanwhile, to put myself on an equal footing with all other shareholders, and not to have either real or perceived motivations which are asymmetric with other shareholders, I have decided, as a goodwill gesture, to waive the EUR 1.5M bonus payment which is payable to me in the event there is a change of control of Cryptologic on or before 30th April 2009. To this end I have instructed my lawyers in Dublin to complete the necessary paperwork to reflect my decision.

This will enable all parties to focus unequivocally on the most important issues facing Cryptologic, which are operational execution and excellence, corporate governance, and the independence of the board and its chairman.

I am prepared to enter into a dialogue with the Board on these and other issues as and when appropriate and necessary, and reiterate that my motivation for this and previous correspondence is the well being of the Company.

Regards, Javaid.