DATED: 16th January, 2008 EBET LIMITED (“eBet”) and OCTAVIAN INTERNATIONAL LIMITED (“Octavian”) DEED OF AGREEMENT to restructure and resolve the status of outstanding debts and other liabilities
DATED:
16th
January,
2008
EBET
LIMITED
(“eBet”)
and
OCTAVIAN
INTERNATIONAL LIMITED
(“Octavian”)
to
restructure and resolve the status of
outstanding
debts and other liabilities
This
Agreement is made on 16th
January,
2008
| PARTIES: |
EBET
LIMITED
(ACN ▇▇▇ ▇▇▇ ▇▇▇) of Suite 13, ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ (“eBet”);
|
OCTAVIAN
INTERNATIONAL LIMITED incorporated
in the United Kingdom (Company No. 04185988) of
Bury
House, ▇-▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇ (“Octavian”).
RECITALS:
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A.
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eBet
and Octavian have decided not to proceed with eBet’s proposed acquisition
of Octavian.
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B.
|
Octavian
has elected to be acquired by PacificNet Inc of the
USA.
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C.
|
eBet
and Octavian entered into a letter agreement on 11th
January 2008 (the "Letter")
dealing with the outstanding debt owed by Octavian to eBet and the
related
charge granted by Octavian to eBet over its intellectual property.
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D.
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The
Letter requires agreement to be reached on various matters connected
with
the Loan Agreement and the Charge.
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E.
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This
Agreement sets out the terms and conditions of such agreement on
all
outstanding issues between eBet and Octavian.
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1.
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DEFINITIONS
AND INTERPRETATION
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1.1
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In
this Agreement:
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Business
Day has
the
same meaning as in the Charge.
Charge
means
the deed of charge dated 15 August, 2007 as referred to in recital C.
Charged
Property has
the
same meaning as in the Charge.
Event
of Default has
the
same meaning as in the Charge.
Facility
has the
same meaning as in the Loan Agreement.
Loan
Agreement means
the
loan agreement dated 20 June, 2007 made between eBet (as lender) and Octavian
(as borrower).
Officer
has the
same meaning as in the Charge.
Project
Status Report
means
the report on work undertaken on a proposed replacement machine monitoring
systems for Odyssey to be set out at Schedule 2.
Page
2 of
13
Reconciliation
Amount means
the
sum of US$173,722.53, as set out in paragraph 10 of the Letter
and
Schedule 1, Part B.
Secured
Moneys has
the
meaning given to that term in clause 3.1(a).
Secured
Obligations
has the
same meaning as in the Charge.
Standstill
Period has
the
same meaning as in the Charge.
Transaction
Documents
has the
same meaning as in the Charge, and includes the Letter, this Agreement when
executed, and any document or agreement so stipulated in this Agreement.
1.2 Interpretation
In
this
Agreement, unless the contrary intention appears:
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(a)
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a
document (including this Agreement) includes any variation or replacement
of it;
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(b)
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a
clause, Schedule, Annexure, Attachment or Exhibit is a reference
to a
clause in, or a Schedule, Annexure, Attachment or Exhibit to, this
Agreement.
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(c)
|
a
statute, ordinance, code or other law, includes regulations and other
instruments under it and consolidations, amendments, re-enactments
or
replacements of any of them;
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(d)
|
law
includes common law, principles of equity, and laws made by parliament
(including regulations and other instruments under them, and
consolidations, amendments, re-enactments or replacements of any
of
them);
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(e)
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the
singular includes the plural and vice versa;
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(f)
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the
word ‘person’ includes an individual, a firm, a body corporate, a
partnership, joint venture, an unincorporated body or association,
or any
government agency;
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(g)
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a
particular person includes a reference to the person’s executors,
administrators, successors and substitutes (including, persons taking
by
novation) and assigns;
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(h)
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a
period of time that dates from a given day or the day of an act or
event
is to be calculated exclusive of that day;
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(i)
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the
words ‘include’, ‘including’, ‘for example’ or ‘such as’ are not to be
interpreted as words of limitation, and when such words introduce
an
example, they do not limit the meaning of the words to which the
example
relates, or to examples of a similar kind.
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Page
3 of
13
1.3 NOT
USED
1.4 Conflicts
In
the
event of a conflict between the provisions of (a) the Letter and this Agreement
and (b) the Transaction Documents, the provisions of the Letter and this
Agreement will prevail (in that order as between the Letter and this Agreement).
The provisions of the Charge prevail over all other Transaction Documents.
2. TERMS
OF THE LETTER
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2.1
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Further
to the terms of the Letter, eBet hereby agrees for the duration of
the
period commencing with the date of this Agreement and ending on 30
June
2008 (the "Extension
Period").
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(i)
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to
waive the default potentially arising in connection with the breach
by
Octavian of clause 4.2 of the Loan
Agreement;
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(iI)
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not
to take steps to create an Event of Default in connection with the
default
referred to at clause 2.1(i) during the Extension
Period;
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(iii)
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to
waive all rights arising from the default referred to at clause 2.1(i)
pursuant to the Loan Agreement, the Charge or otherwise during the
Extension Period;
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(iv)
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that
the Facility has not been cancelled;
and
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(v)
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that
the Loan and Interest accrued thereon are not immediately due and
payable.
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3. VARIATIONS
TO LOAN AGREEMENT
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3.1
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Octavian
and eBet agree that the Loan Agreement is varied as follows:
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| (a) clause1.1 | - |
in
the definition of “Facility Period”, delete words
“the first to occur ... and 31 December
2007” and substitute “30 June 2008, with no further
extension”;
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-
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in
the definition of "Secured Moneys", add the following wording at
the end
of the clause "and the reconciliation amount of US$141,707.29, financing
costs incurred pursuant to clause 4.1(d) and payments due in respect
of
trademarks under clause 6.3 of the agreement between the Lender and
the
Borrower dated 9 January 2007, being AUS$158,641.59 and any outstanding
amounts agreed by the Borrower or determined as being due to the
Lender
under the Flatpack Sale and Distribution Agreement dated 26 January
2007".,
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Page
4 of
13
| (b) clause 4 | - |
the
insertion of new clauses 4.4 to 4.6 to read as
follows:
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“4.4
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The
Lender and the Borrower acknowledge that the Borrower is seeking
to
complete a capital raising in an amount of approximately US$5,000,000
as
soon as possible (the "Initial
Raising")
and in connection with the Initial Raising the Borrower undertakes
to the
Lender:
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(a)
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notify
the Lender as soon as reasonably practicable after the Initial Raising
has
been completed and provide the Lender with details of the amount
of the
Initial Raising;
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(b)
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to
ensure that no monies from the Initial Raising or any other source
are
paid to or retained by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ (other than normal salary
and
expense payments) or any entity controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
whilst
any Secured Monies remain outstanding ;
and
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(c)
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to
ensure that at least 10% of the Initial Raising is paid to the Lender
as
soon as practicable after the funds from the Initial Raising are
available
to either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ and/or the
Borrower.
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4.5
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The
Borrower notifies the Lender that it is seeking to complete a further
capital raising after the Initial Raising of an amount in excess
of
US$15,000,000, and it is intended that such further capital raising
be
completed during March or April 2008 (the "Further Raising").
The Borrower undertakes to the Lender to use funds from the Further
Raising to repay all Secured Moneys owing to the Lender pursuant
to the
Loan Agreement (as amended).
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Page
5 of
13
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4.6
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Nothing
in clauses 4.4 or 4.5 shall operate as a representation or warranty
by the
Borrower to the Lender regarding the terms of (including the amounts),
and/or completion of, either of the proposed Initial Raising or Further
Raising. ”
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3.2
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Octavian
and eBet acknowledge that:
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(a)
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the
Charge has been amended as set out in paragraph 8 of the Letter (relating
to the Standstill Period);
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(b)
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the
Loan Agreement has been amended as set out in
paragraphs:
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(i) 7.
(a)
(definition of Interest Rate);
(ii) 7.
(b)
(definition of Facility Period); and
(iii) 7.1
(c)
(amount drawn down)
of
the
Letter; and
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(c)
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clause
4.1 of the Loan Agreement is now subject to the payment of interest
provisions set out in paragraph 9 of the
Letter.
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4.
RECONCILIATION AND RE-FINANCING AMOUNTS AND ORDER OF
PAYMENT
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4.1
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The
parties acknowledge and agree that:
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(a)
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eBet
has been required to refinance current banking facilities with St.
▇▇▇▇▇▇
bank Ltd., and they will be taken over by MFS Causeway Financial
Services
Pty. Limited ACN 108 248782 .
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(b)
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this
financing will result in additional costs to eBet in the form of
fees,
stamp duty, legal costs, additional interest and other
items;
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(c)
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as
a sign of good faith, eBet will assume responsibility for 25% of
those
costs associated with sub clauses (a) & (b) above;
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Page
6 of
13
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(d)
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Octavian
is responsible for payment of the remaining 75% of those costs associated
with sub clauses (a) and (b) above, such amount being
AUS$158,641.59
as
set out in Schedule 1, Part C;
and
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(e)
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the
Reconciliation Amount and the sum payable pursuant to clause 4.1(d)
above
shall be due and payable by Octavian to eBet by the earlier to occur
of 30
days from the date of this Agreement and completion of the Initial
Raising
referred at clause 3.1(b). After the due date for payment, any unpaid
portion of the Reconciliation Amount only shall attract interest
at the
Interest Rate as defined in the Loan Agreement (provided that Octavian
has
on such date received a valid invoice in respect of such
costs).
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4.2
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Payment
of funds by Octavian to repay the Secured Moneys shall be applied
by eBet
as follows:
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(a)
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first,
in satisfying all sums due in respect of the financing costs referred
to
at clause 4.1(d) above, being
AUS$158,641.59;
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(b)
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second,
in satisfying all outstanding sums due in respect of the Reconciliation
Amount being US$173,722.53;
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(c)
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third,
in satisfying the amount of AUS$825,000.00 of the Loan (together
with all
unpaid interest accrued thereon);
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(d)
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fourth,
in satisfying any sums agreed by Octavian or determined as being
due to
eBet under the Flatpack Sale and Distribution Agreement dated 26
January
2007;
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| (e) |
fifth,
in satisfying all outstanding amounts due in respect of the trademarks
pursuant to clause 6.3 below; and
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| (f) |
sixth,
in satisfying all outstanding amounts of the Loan (together with
all
unpaid interest accrued thereon).
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5. NON
PURCHASE OF OCTAVIAN
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5.1
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The
parties agree not to take any action against each other in respect
of the
discontinuance of proposed purchase by eBet of 100% of the issued
share
capital of Octavian.
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5.2
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Accordingly,
except for the issues addressed in this Agreement, the parties release
and
discharge each other from and against all actions, claims, proceedings
and
other liabilities that have arisen in the period up to the date of
this
Agreement (whether directly or indirectly and whether or not known
or
disclosed) from the failed sale and purchase of 100% of the issued
share
capital of Octavian.
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Page
7 of
13
| 6. |
OCTAVIAN
EQUIPMENT AND INTELLECTUAL
PROPERTY
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6.1
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eBet
is currently holding 4 Liberty gaming machines, an ExtraCash sign
and
associated equipment at its warehouse in North Ryde (all the property
of
Octavian), which it cannot use.
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6.2
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As
a sign of good faith, eBet will, at its own cost, arrange for the
return
of this equipment to Octavian.
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6.3
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Octavian
acknowledges that eBet has registered the name "Octavian" as
a trademark in the jurisdictions set out in column 1 of the table
in
Schedule 1,
Part A
(the "Trademarks")
and incurred the costs set out in column 2 of the table in Schedule
1 (the
"Costs").
eBet hereby undertakes to Octavian to transfer the Trademarks to
Octavian
within 5 Business Days following the date of this Agreement and as
consideration for this transfer, Octavian undertakes to eBet to pay
to
eBet an amount equal to the total of the costs set out in column
2 of the
table in Schedule 1,
Part A
on
or before 30 June 2008.
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6.4
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eBet
undertakes to Octavian to do all such acts and things necessary (subject
to the payment by Octavian of eBets’s reasonable costs) to give effect to
the undertaking given at clause
6.3.
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7.
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OCTAVIAN
UNDERTAKINGS
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7.1
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Octavian
undertakes with eBet:
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(a)
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to
provide eBet with copies of the following:
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| (i) |
Octavian’s
monthly profit and loss account;
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(ii)
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Octavian’s
balance sheet as at the last day of each calendar month;
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(iii)
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Octavian’s
monthly cashflows
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within
20
Business Days after the end of each calendar month; and
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(iv)
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the
audited accounts as and when the same are filed with the Register
of
Companies.
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| (b) |
not
to give security over the Charged Property to any other
person;
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The
obligations in sub-clauses (a) and (b) above continue until full and final
payment of the Secured Moneys and discharge of the other Secured Obligations.
Octavian may elect to provide this information through its data room with MFS,
provided eBet has continuing access to this material. If it so elects, Octavian
must ensure that all the information in the data room is kept up to
date.
Page
8 of
13
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7.2
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eBet
undertakes to Octavian to keep all information provided under clause
7.1(a)(i) to (iii) confidential and to use such information only
for the
purpose of reviewing the financial position of Octavian, provided
that
eBet shall be permitted to disclose the information to any party
to whom
information may be disclosed by eBet pursuant to the Loan Agreement
and/or
the Charge (but no other party without Octavian's prior written consent)
and the obligations of this clause 7.2 shall not apply to any information
already in the public domain (other than by a breach by eBet or MFS
of
this clause or any other confidentiality obligation owed to
Octavian).
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7.3
|
Octavian
will ensure that all outstanding contracts entered into by its personnel
in the name of Octavian Global Technologies Limited (ACN ▇▇▇ ▇▇▇
▇▇▇) are
either terminated in accordance with their terms or novated to Octavian
as
soon as possible after the date of this
Agreement.
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7.4
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Octavian
advises that it has or will shortly commission an independent valuation
of
the Intellectual Property Rights comprised in the Charged Property,
and
undertakes to provide eBet with a copy upon
receipt.
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7.5
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Octavian
undertakes to eBet to ensure that all Intellectual Property Rights
deposited with the Software Escrow Agent in
or about October, 2007 are brought up to date as soon as practicable
after
the date of this Agreement, and thereafter kept materially complete,
up to
date and in full working order on an ongoing basis while the Secured
Moneys remain outstanding.
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7.6
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Octavian
will provide eBet with all information reasonably required by eBet
in
respect of the 218 Mavericks owned by eBet which Octavian has placed
into
the Latin America market. Octavian consents to eBet endeavouring
to place
the remaining 32 Mavericks which it owns into the Asian market, on
terms
to be agreed.
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7.7
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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:
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(a)
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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;
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(b)
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Octavian
is appointed as non-exclusive distributor of eBet's gaming system
products
in Central and South America, Eastern Europe and
CIS;
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(c)
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eBet
is appointed as Octavian's non-exclusive distributor of Logismos
table
management products in the Asia area (excluding Japan, China and
India)
with effect from the date when Octavian's appointment as Logismos'
distributor comes into effect.
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Page
9 of
13
These
appointments shall include other required terms to be agreed, including in
relation to 7.7(c), terms relating to price structure and competition (subject
to compliance with all applicable law and regulation).
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7.8
|
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, nor to undertake any further work on the proposed machine
monitoring system for Odyssey, while any Secured Moneys remain
outstanding. The terms of a Project Status Report (summarising the
work
undertaken to date on the proposed replacement machine monitoring
system
for Odyssey) is to be prepared and sent to eBet on or before 31 January
2008.
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8.
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STANDSTILL
PERIOD
|
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Octavian
and eBet acknowledge and agree that, as at the date of this Agreement,
a
Standstill Period has not commenced and that no Standstill Period
has come
into existence.
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| 9. |
GENERAL
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| 9.1 |
NOT
USED
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| 9.2 |
Octavian
to bear cost
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Any
thing
which must be done by Octavian under this Agreement is to be done at the cost
of
Octavian.
| 9.3 |
Notices
|
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(a)
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Any
notice or other communication, including any request, demand, consent
or
approval, to or by a party under or in connection with this
Agreement:
|
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(i)
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must
be in legible writing and in English addressed as shown
below:
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(ii)
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if
to the eBet:
|
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Address:
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Unit
13
112 –
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
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|
Facsimile:
|
▇▇▇
▇ ▇▇▇▇ ▇▇▇▇
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Attention:
|
▇▇▇▇
▇▇▇▇▇▇
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Page
10 of
13
| (A) if to Octavian: |
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Address:
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▇▇▇▇
▇▇▇▇▇, ▇-▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇
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|
Facsimile:
|
▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
|
|
Attention:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇▇
|
or
as
specified to the sender by either party by notice;
| (iii) |
must
be signed by an Officer of the sender or under the common seal of
the
sender;
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| (iv) |
is
regarded as being given by the sender and received by the
addressee:
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| (A) |
if
by delivery in person, when delivered to the
addressee;
|
|
(B)
|
if
by post, 7 days from
and including the date of postage;
or
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| (C) |
if
by facsimile transmission, whether or not legibly received, when
transmitted to the addressee, but if the delivery or receipt is on
a day
which is not a Business Day or is after 4.00 pm (addressee’s time), it is
regarded as received at 9.00 am on the following Business Day;
and
|
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(v)
|
can
be relied upon by the addressee and the addressee is not liable to
any
other person for any consequences of that reliance if the addressee
believes it to be genuine, correct and authorised by the
sender.
|
|
(b)
|
A
facsimile transmission is regarded as legible unless the addressee
telephones the sender within 2 hours after the transmission is received
or
regarded as received under Clause 9.3(a)(iii)(C) and informs the
sender
that it is not legible.
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(c)
|
In
this clause 9.3, a reference to an addressee includes a reference
to an
addressee’s Officers, agents or employees or any person reasonably
believed by the sender to be an Officer, agent or employee of the
addressee.
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9.4 Governing
law and jurisdiction
|
(a)
|
This
Agreement is governed by the laws of the State of New South
Wales.
|
|
(b)
|
Octavian
irrevocably submits to the non-exclusive jurisdiction of the courts
of the
State of New South Wales and courts of appeal from them, and appoints
▇▇▇▇▇▇▇ Winter & ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ as its agent to accept service of process on its behalf.
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Page
11 of
13
| 9.5 |
Prohibition
and enforceability
|
|
(a)
|
Any
provision of, or the application of any provision of, this Agreement
which
is prohibited in any jurisdiction is, in that jurisdiction, ineffective
only to the extent of that
prohibition.
|
|
(b)
|
Any
provision of, or the application of any provision of, this Agreement
which
is void, illegal or unenforceable in any jurisdiction does not affect
the
validity, legality or enforceability of that provision in any other
jurisdiction, or of the remaining provisions in that or any other
jurisdiction.
|
| 9.6 |
Waivers
|
|
(a)
|
Waiver
of any right arising from a breach of this Agreement or of any power
arising upon default under this Agreement or upon the occurrence
of an
Event of Default, must be in writing and signed by the party granting
the
waiver.
|
|
(b)
|
Except
as set out otherwise herein, a failure or delay in exercise, or partial
exercise, of:
|
|
(i)
|
a
right arising from a breach of this Agreement or the occurrence of
an
Event of Default; or
|
|
(ii)
|
a
power created or arising upon default under this Agreement or upon
the
occurrence of an Event of Default,
|
does
not
result in a waiver of that right or power.
|
(c)
|
A
party is not entitled to rely on a delay in the exercise or non-exercise
of a right or power arising from a breach of this Agreement or on
a
default under this Agreement or on the occurrence of an Event of
Default
as constituting a waiver of that right or
power.
|
|
(d)
|
A
party may not rely on any conduct of another party as a defence to
exercise of a right or power by that other
party.
|
| (e) |
This
clause 9.6 may not itself be waived except by
writing.
|
| 9.7 |
Variation
|
|
(a)
|
A
variation of any term of this Agreement must be in writing and signed
by
the parties.
|
|
(b)
|
This
Agreement (and the Letter as noted in paragraph 12 of the Letter)
is
supplementary to the Agreement and
Charge.
|
| 9.8 |
Cumulative
Rights
|
The
powers conferred by this Agreement are cumulative and do not exclude any other
right, power, authority, discretion or remedy of eBet.
Page
12 of
13
| 9.9 |
Assignment
|
|
(a)
|
Subject
to any Transaction Document, eBet may assign its rights under this
Agreement, without the consent of Octavian, where required to do
so by one
of its financiers which is a financial institution (subject to the
production of evidence of the same). Otherwise, assignment may only
take
place with the prior written consent of
Octavian.
|
|
(b)
|
Octavian
must not assign any of its rights under this Agreement without
the prior written consent of eBet.
|
| 9.10 |
Further
assurances
|
Octavian
must execute any document and take any other action required by eBet to give
effect to this Agreement and to give effect to the transactions the subject
of
this Agreement.
Page
13 of
13
EXECUTED
AS A DEED
|
SIGNED
AS A DEED by
OCTAVIAN
INTERNATIONAL LIMITED
by
its duly authorised officers:
|
)
)
)
|
|
|
Director
|
Director/Secretary
|
|
|
Name
(please print)
|
Name
(please print)
|
|
SIGNED,
SEALED AND DELIVERED by
EBET
LIMITED
(ACN
▇▇▇ ▇▇▇ ▇▇▇)
in
accordance with section 127 of the Corporations Act:
|
)
)
)
)
)
|
|
|
|
||
|
Director
|
Director
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
▇▇▇
▇▇▇▇▇
|
|
|
Name
(please print)
|
Name
(please print)
|