Octavian International Limited ("Octavian")
▇▇▇▇
▇▇▇▇▇
▇-▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
The
Directors
eBet
Limited ("eBet")
▇▇▇▇
▇▇,
▇▇▇- ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇
11
January 2008
Dear
Sirs
Loan
Agreement between eBet and Octavian dated 20 June 2007 (the "Agreement")
and
Deed of Charge between eBet and Octavian dated 15 August 2007 (the
"Charge")
|
1.
|
With
reference to the Agreement and the Charge, and in consideration of
the
payment of AUS$l by Octavian to eBet and other valuable consideration,
please sign, date and return the acknowledgement on the copy letter
by way
of agreement to the terms of this
letter.
|
| 2. |
Terms
defined in this letter shall have the same meaning as set out in
the
Agreement
and the Charge, unless the context requires
otherwise.
|
|
3.
|
Octavian
and eBet acknowledge that Octavian has not complied with clause 4.2
of the
Agreement as at 31 December, 2007 and, in
connection with this breach, there is
the possibility for there being an Event of Default pursuant to clause
7.1.1
of
the Agreement and clause 7.1(a) of the Charge if notice is given
to
Octavian by eBet to that effect,
|
|
4.
|
The
parties agree that, in addition to the above breach of the Agreement,
there are other outstanding issues between them (including, without
limitation, as provided in the draft Deed of Agreement
emailed by eBet to Octavian on 19 December, 2007) (the "Outstanding
Issues").
Each party undertakes to the other to use its reasonable endeavours
to
enter into a binding agreement with the other settling the terms
of the
Outstanding Issues by no later than 14 January, 2008 (the period
from 31
December 2007 to 14 January 2008 being the "Rectification
Period").
For the avoidance of doubt, if agreement on the Outstanding Issues
is not
made by the expiry of the Rectification Period, either party may
exercise
its rights under the Agreement and/or Charge (as amended by this
letter),
subject to the waiver of rights set out in paragraph 5 below and
the
release in para 6 below.
|
|
5.
|
eBet
hereby agrees, for the duration of the Rectification Period, to waive
(i)
the default referred to in paragraph 3 above and not take steps to
create
an Event of Default in connection with that default during
this period; and (ii) all rights arising from that default pursuant
to the
Agreement, Charge or otherwise during this period. Without prejudice
to
the generality of
the foregoing, it is further acknowledged
and agreed by eBet that during the Rectification
Period;
|
|
(a)
|
the
Facility has not been cancelled;
and
|
| (b) |
the
Loan and Interest
accrued thereon are not immediately due and
payable.
|
|
6.
|
Octavian
and eBet further acknowledge that pursuant to clause 2.4 of the Charge,
the
floating charge has become or could become crystallised and become
fixed.
eBet
hereby agrees that pursuant to clause 2.5 of the Charge and to the
extent
the floating charge has become fixed, the Charged Property is released
from the fixed charge during the Rectification Period and the
acknowledgement on the copy letter constitutes notice in writing
by eBet
of this release as required by clause 2.5(a) of the
Charge. Octavian acknowledges that the Charged Property remains subject
to
the provisions of clause 2.5(b) of the
Charge.
|
|
7.
|
Octavian
and eBet agree that (separate and distinct from, and not subject
to, the
other provisions of this letter) the Agreement should be amended
as
follows:
|
| (a) |
The
definition of "Interest Rate" shall be amended to read as
follows:
|
"means
during the period from the first Drawdown Date to the date
3
months after
that date, 13% per annum and thereafter, the corresponding
interest rate charged to eBet under the MFS Causeway Loan
Agreement";
| (b) |
The
definition of "Facility Period" shall be amended to read as
follows:
|
"means
the period starting on the date of this Agreement and ending on 9 January 2008
subject to possible extension out to 30 June, 2008 as may be agreed between
the
parties as part of the negotiations envisaged under paragraph 4 of the letter
dated 11 January 2008 made between the parties (and the other provisions of
that
Letter)";
| (c) |
Clause
2.1 shall be amended to read as
follows
|
'Subject
to the terms
of
this Agreement, the Lender has made available to the Borrower under this
Facility, a total amount of AUS$3,242,500, such amount having
been
drawn down in full by the Borrower. This amount constitutes Secured Moneys
for
the purposes of the Charge".
|
8.
|
Octavian
and eBet agree that Clause 6.3 of the Charge shall be amended by
replacing
the words "I80 days" in the first sentence with the words ", subject
to
the provision at the end of this clause 6.3, 30 days" and by the
addition
of a sentence in clause 6.3 at the end after (e), as follows: "The
following provisions shall apply in respect of any Standstill
Period:
|
| (a) |
a
Standstill Period shall expire no later than 30 July, 2008 regardless
of
when it commences;
|
| (b) |
where
a Standstill Period would commence at the expiry of the Facility
Period by
reason of a default in the repayment of the Secured Moneys, no such
Standstill
Period shall commence unless, by the date of the
default, the Chargor
has
repaid
to
the Chargee,
in total,
a
sum equal
to
AUS$1,621, 250
of the Secured Moneys; and
|
|
(c)
|
there
shall be a maximum of two Standstill Periods, being one at any time
during
the Facility Period and one at or around the expiry of the Facility
Period".
|
|
9.
|
Octavian
is liable for payment of default interest at the default
specified in the MFS Causeway Loan Agreement (currently 3% above
the rate
specified in paragraph 7(a) above) on all overdue interest payments
and on
the principal amount of the Loan in the event that such amount is
not
repaid on or before 30 June 2008. Such interest shall be capitalised
monthly or as applicable under the MSF Causeway Loan
Agreement.
|
|
10.
|
The
reconciliation amount of USD$ 137,499.52 as per the attached spreadsheet
(marked "Reconcillation
Amounts"),
financing costs referred to in clause 4.1 and payments in respect
of
trademarks under clause 6.3 of the deed of agreement to be entered
into on
or before 14 January 2008 pursuant to paragraph 4 above and all
outstanding amounts agreed by Octavian or determined as being due
to eBet
under the Flatpack Sale and Distribution Agreement dated 26 January,
2007
constitute Secured Moneys for the purposes of the
Charge.
|
|
11.
|
Each
party undertakes to the other to use its reasonable endeavours in
good
faith to enter into a binding agreement with the other by no later
than 31
January 2008, whereby:
|
|
a)
|
eBet
is appointed as Octavian's non-exclusive distributor in the Asia/Pacific
area (excluding Japan, China and India) of products comprised in,
or
derived from, the Charged Property;
|
|
b)
|
Octavian
is appointed as non-exclusive distributor of eBet's gaming system
products
in Central and South America, Eastern Europe and
CIS;
|
|
c)
|
eBet
is appointed as Octavian's non-exclusive distributor of Logismos
table
management products in Australia, New Zealand and the Pacific Islands
with
effect from the date when Octavian's appointment as Logismos' distributor
comes into effect.
|
These
appointments shall include other required terms to be agreed, including in
relation to 11(c), terms relating to price structure and competition (subject
to
compliance with all applicable law and regulation.)
Both
parties agree that:
|
a)
|
they
shall respond to any draft agreements within 3 working days in London
and
Sydney of receipt of the same;
|
|
b)
|
they
shall be available for conference calls at least 3 times a week to
be held
on working days in London and Sydney at mutually agreed times;
and
|
|
c)
|
the
agreements shall be on the same terms in all material respects except
where the context requires
otherwise.
|
|
12.
|
Octavian
agrees not to have any further discussions or other communication
or
contact with employees or representatives of Odyssey Gaming Limited
(ACN
074 735 452) (or any of its subsidiaries or related companies) in
relation
to the introduction of gaming system products into the Queensland
gaming
market, while any Secured Moneys remain outstanding. The terms of
a
Project Status Report (summarising the work undertaken on a proposed
replacement machine monitoring system for Odyssey to date) are to
be
settled and included in the deed of agreement to be entered into
before 31
January 2008 pursuant to paragraph 4
above.
|
|
13.
|
Octavian
undertakes to provide a copy of this letter and the subsequent deed
of
agreement to be entered into between Octavian and eBet to PacificNet
Inc
and eBet consents to the provision of this information to PacificNet
Inc.
|
|
14.
|
The
parties agree to a copy of this letter being provided to the Software
Escrow Agent.
|
|
15.
|
This
letter is supplementary to the Agreement and Charge, is governed
by ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ courts have exclusive jurisdiction
to settle any dispute in connection with
it.
|
Please
sign, date and return the copy letter by way of acknowledgment and agreement
of
its terms.
/s/
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
Signed,
sealed and delivered
For
and on behalf of Octavian International
Limited
We
hereby
acknowledge and agree to the terms of this letter
/s/
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
Signed,
sealed and delivered
For
and on behalf of eBet Limited
Dated:
January 11, 2008