Ziria Enterprises Limited and PacificNet Games International Corporation and PacificNet Inc. and Octavian International Limited and Emperor Holdings Limited Deed of Amendment in respect of an acquisition agreement relating to the entire issued share...
and
PacificNet
Games International Corporation
and
PacificNet
Inc.
and
Octavian
International Limited
and
Emperor
Holdings Limited
Deed
of Amendment
in
respect of an acquisition agreement relating to the entire issued share capital
of Emperor Holdings Limited
Contents
|
1
|
Definitions
and interpretation
|
2
|
|
2
|
Consideration
|
2
|
|
3
|
Termination
of the Agreement
|
3
|
|
4
|
Waiver
|
3
|
|
5
|
Acknowledgement
of Receipt
|
3
|
|
6
|
Resignation
of Xxxxxx Xxxxxxxxxxxxxx
|
3
|
|
7
|
Ongoing
relationship
|
4
|
|
8
|
Notices
|
5
|
|
9
|
Further
assurance
|
7
|
|
10
|
Variation
|
7
|
|
11
|
Counterparts
|
7
|
|
12
|
Governing
law and jurisdiction
|
7
|
Deed
Dated May
14, 2008
Between:
|
(1)
|
Ziria
Enterprises Limited a
company incorporated in Cyprus whose office is at 319, 28th October
Street, Xxxxxx Business Ctr. 2nd Floor, Limassol, Cyprus (Ziria);
and
|
| (2) |
PacificNet
Games International Corporation,
a
company existing under the laws of the British Virgin Islands whose
principal executive office is situated at Floor 23rd, Tower A, TimeCourt,
Xx.0 Xxxxxxxxxxxx, Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx (PacificNet
Games);
and
|
| (3) |
PacificNet
Inc.
a
company incorporated under the laws of the State of Delaware in the
United
States of America whose principal executive office is situate at
Floor
23rd, Tower A, TimeCourt, Xx.0 Xxxxxxxxxxxx, Xxxxxxxx Xxxxxxxx Xxxxxxx,
Xxxxx (PACT);
and
|
| (4) |
| (5) |
(each
a
Party
and
together the Parties).
Background
| (A) |
The
Parties entered into a sale and purchase agreement on 7 December
2007
(Agreement)
for the acquisition by PacificNet Games of the entire issued share
capital
of Emperor which owns the entire issued share capital of the Company
(the
Transaction).
The Completion Date (as defined in the Agreement) was 22 January
2008.
|
| (B) |
Neither
PACT nor PacificNet Games have received a share certificate in respect
of
the shares in Emperor to be acquired pursuant to the Agreement and
which
is a right of PacificNet Games under the
Agreement.
|
| (C) |
There
has been no appointment of any director from either of PACT or PacificNet
Games to the board of either of Emperor or the
Company.
|
| (D) |
The
Parties now consider that the Transaction contemplated by the Agreement
will not benefit their respective businesses and consider that it
would be
beneficial to operate separately and
independently.
|
| (E) |
The
Parties have renegotiated the Agreement and Terms of the Transaction
as
set out in a letter of intent dated 28 March 2008 and in accordance
with
such letter now wish to set out the renegotiated terms in this
Agreement.
|
| (F) |
It
is acknowledged that this agreement is to be executed as a Deed on
the
basis that not all the Parties are receiving consideration for entry
into
it.
|
It
is agreed as follows:
| 1 |
Definitions
and interpretation
|
| 1.1 |
In
this Deed, unless the context otherwise
requires:
|
| 1.1.1 |
words
in the singular include the plural and vice versa and words importing
any
gender include every gender;
|
| 1.1.2 |
references
to persons include individuals, firms, partnerships, limited liability
partnerships, companies, corporations, unincorporated associations,
governments, authorities, agencies and trusts (in each case, whether
or
not having separate legal
personality);
|
| 1.1.3 |
any
phrase introduced by the terms including, include, in particular
or any
similar expression shall be construed as illustrative and shall not
limit
the sense of the words preceding those
terms;
|
| 1.1.4 |
the
table of contents and clause headings are included for ease of reference
only and shall not affect the interpretation of this Agreement;
and
|
| 1.1.5 |
the
Background forms part of this Deed and shall have effect as if set
out in
full in the body of this Deed and any reference to this Deed includes
the
Background.
|
|
1.2
|
In
this Deed:
|
| 1.2.1 |
Closing
means the closing by Octavian of a transaction pursuant to which
it raises
funds from external investors;
|
| 1.2.2 |
Emperor
Shares
means the entire issued share capital of Emperor (as transferred
to PACT
pursuant to the Agreement);
|
| 1.2.3 |
Octavian
Separation Conditions
means the:
|
| (a) |
the
execution of any share transfer document by PACT required to transfer
the
Emperor Shares back to Ziria (it being acknowledged that the share
certificates for such shares remain in Cyprus and have not been delivered
to PACT);
|
| 1.2.4 |
PACT
Separation Conditions
means the:
|
| (a) |
delivery
by the Company to PACT of the share certificates for the PACT Shares
(or
equivalent title documents) and the execution of any share transfer
document; and
|
| (b) |
completion
of the resignation of Xxxxxx Xxxxxxxxxxxxxx from the board of PACT;
and
|
| 1.2.5 |
PACT
Shares
means the shares in PACT issued to Ziria pursuant to the
Agreement.
|
| 2 |
Consideration
|
In
consideration of Ziria returning to PacificNet Games the 1,200,000 shares in
PACT issued pursuant to the Agreement (the Consideration
Shares)
each
Party agrees that the Agreement shall be terminated in accordance with the
terms
of this Deed.
2
PART
A - termination of Agreement and reversing transfer of shares in PACT and
Octavian
| 3 |
Termination
of the Agreement
|
| 3.1 |
Upon
the execution of this Deed:
|
| (a) |
the
Agreement and the other rights and obligations of each Party as set
out in
the Agreement shall be terminated and cease to have effect save in
respect
of the provisions of Clauses 1 (Interpretation), 14 (Notices), 16
(Settlement of Disputes) and 17 (Governing Law and Jurisdiction)
which
shall continue in full force and effect;
and
|
| (b) |
Ziria,
Emperor and the Company shall cease to be part of the PACT group
and shall
operate separately and independently of PACT and PacificNet
Games.
|
| 3.2 |
All
Parties agree that there shall be no further obligation to make any
payments under the Agreement, whether in the form of shares in PACT
or
otherwise including, without
limitation:
|
| (a) |
the
30,000 shares in PACT to which Ziria was, immediately prior to the
date of
this Deed, entitled to receive (and had directed to be issued to
Sterne
Agee); and
|
| (b) |
the
further 1,100,000 shares in PACT which were to be issued to Ziria
in
accordance with clause 3.4.2 of the
Agreement.
|
| 4 |
Waiver
and separation conditions
|
Octavian
shall reimburse PACT for all the costs and expenses incurred by PACT related
to
acquisition of Octavian, including due diligence, assistance on annual audit,
etc, up to a maximum of US$30,000. Payment shall be made upon the Company
carrying out its proposed funding transaction.
On
satisfaction of the PACT Separation Conditions and the Octavian Separation
Conditions (or their waiver by, respectively, PACT or Octavian), each Party
agrees absolutely and unconditionally to waive any claims, rights or other
actions it may have pursuant to the terms of the Agreement or as a result of
termination of the Agreement pursuant to this Deed, as at the date of this
Deed
against any Party or other party (including, but not limited to the failure
of
Ziria to deliver to PACT or PacificNet Games, the shares in Emperor).
| 5 |
Acknowledgement
of Receipt
|
PacificNet
Games acknowledges receipt of the certificates relating to the Consideration
Shares and satisfied its obligations in relation to the return of the shares
in
PACT pursuant to clause
1.1.
| 6 |
Resignation
of Xxxxxx Xxxxxxxxxxxxxx
|
Ziria,
Emperor and the Company agree to procure that Xxxxxx Xxxxxxxxxxxxxx will,
promptly after the date of this Deed, resign from the board of directors of
PACT.
3
PART
B - terms for ongoing relationship
| 7 |
Ongoing
relationship
- corporate matters
|
| 7.1 |
PACT
and the Company agree to use all reasonable endeavours to sign the
following agreements within 3 months of the date of this
Deed:
|
| (a) |
a
non-exclusive distribution agreement and licence whereby PACT will
be
appointed as a distributor of the Company's products in Macau provided
that, subject to the agreement of the terms of the licence, the only
other
distributor of the Company products shall be eBet Limited;
and
|
| (b) |
a
joint venture agreement relating to future business development in
Macau
and, subject to agreement, other territories in
Asia.
|
| 7.2 |
It
is acknowledged that the Company is negotiating terms with investors,
following completion of such negotiations the Company and PACT shall
agree
a document to effect the simultaneous completion of the following
transactions on or before Closing:
|
| (a) |
the
Company shall issue to PACT or its nominee an amount of shares in
the
Company so that following such issue PACT or its nominee shall own
an
amount of share in the Company equal to 5 per cent (5%) of the issued
share capital (Octavian shall, to the extent permitted to do so,
advise
PACT of the terms of the Closing (including by providing the proposed
share ownership structure with new investor names, share number and
ownership %); and
|
| (b) |
PACT
shall issue 500,000 newly issued PACT restricted shares (PACT
Restricted Shares)
credited as fully paid to the Company or its nominee.
These PACT shares shall be subject to one year lock up and sale
restriction: any share sale shall be communicated to PACT at least
7 days
prior to the sale including intended sales price, number of sale
shares,
buyer names, and PACT shall have a first right of refusal to arrange
buyers to buy at the same terms as other buyers, and PACT shall be
allowed
to assist with the PACT share sale process including arranging the
broker
and account and PACT shall be entitled to share half (50%) of net
gain
(profit from price appreciation, ie. sales price - original issuance
price
on the date of issuance) with any partial sale of PACT shares.
|
| 7.3 |
For
a period of 12 months from the date of this Deed (or such longer
period as
the Parties may both agree to), PACT shall have the option to subscribe
for ordinary shares in the Company so to retain PACT’s 5% ownership in
Octavian and not to be diluted on the following
terms:
|
| (a) |
The
subscription price shall be equal to 85% of the subscription price
last
paid by external investors in the Company prior to the date at which
PACT
exercise this option but after the date of this
Deed;
|
| (b) |
PACT
may exercise the option by notice in writing to the Company at any
time
within such 12 month period but may only exercise the option
once;
|
| (c) |
The
option is for a maximum amount of shares in the Company equal to
5% of the
issued share capital of the Company on the date of receipt of notice
from
PACT exercising the option (and PACT may specify any amount between
1% and
5%); and
|
| (d) |
The
subscription price shall be paid in cash in full on the day of completion
of the subscription, failing which the option will
lapse.
|
4
| 7.4 |
The
status and conclusion of such negotiations shall not in any way affect
the
terms of this Deed or the termination of the Agreement and the rights
and
obligations under it.
|
| 8 |
Ongoing
relationship - commercial
matters
|
| 8.1 |
Product
localisation /translation
project
|
The
Parties acknowledge that to develop the Company's products in the future it
will
need to carry out product localisation and translation work and PACT has stated
that it is willing to carry out this work on commercial terms to benefit both
parties (and in the case of PACT, to benefit it both as a supplier providing
a
service on commercial terms and as a shareholder in the Company). Accordingly
the Parties agree to discuss opportunities to work together in the future in
this regard and will, where each Party deems it appropriate, actively seek
to
enter into commercial agreements, on terms to be agreed, for the provision
by
PACT to the Company of product localisation and translation
services.
Within
the later of 60 days from the signing of this Agreement or upon receipt of
funding, Octavian will pay US$200,000 to PACT for localization and language
translation for Octavian’s products into Chinese language (including ACP,
Symphony, Marverik, ExtraCash,…). The terms of this agreement will be documented
in a definitive agreement. This will include ownership terms and payment terms
(which will include US$100,000 down-payment, US$50,000 on half completion and
US$50,000 on completion). PACT should have an equal opportunity to bid on any
software development project within Octavian and its subsidiaries and investees.
| 8.2 |
Product
Marketing project
|
In
relation to Macau, PACT will assist the Company in the marketing of the
Company's products. The Company shall be responsible for up to US$50,000 of
marketing expenses incurred by PACT within 3 months of the signing of this
Agreement provided that no sum shall be payable by the Company unless both
the
actual amount and the reason for the expense was previously approved of in
writing by a director of the Company with reference to this
provision.
| 8.3 |
Sale
of PACT gaming machines
|
The
Parties shall work together to actively maximise the sale of PACT gaming
machines by the Company. In particular the Company will work with PACT to put
together a sales plan, with a schedule forecasting sales for the first year
(current target of US$2 million) and second year (current target of US$4
million). Subject to the following sentence, Octavian shall be committed to
the
following sales revenue target on the sale of PACT’s products: First year sales
commitment: US$2 million minimum sales revenue commitment (with US$4 million
sales target); Second year sales commitment: US$4 million minimum sales revenue
commitment (with US$6 million sales target) The Company shall use all reasonable
endeavours to comply with the sales targets set out in the plan and PACT shall
provide appropriate support to assist in the achievement of the targets in
the
sales plan.
| 8.4 |
Product
co-development, co-marketing and distribution agreements for Asian
markets: Macau, China, Taiwan, Philippines, Cambodia, Vietnam, Laos,
Myanamar and Thailand
|
The
Parties undertake to each other to use all reasonable endeavours to agree terms
for the above agreements within 60 days of the date of this Deed. In particular,
the Parties shall use all reasonable endeavours to agree the terms of a
non-exclusive distribution agreement within such period and, if the Company
receives an offer from another party within such period on better terms than
those offered by PACT, it shall not enter into an agreement with such other
Party without first notifying PACT and inviting PACT to match those
terms.
5
PART
C - General
| 9 |
Warranties
|
| 9.1 |
Each
Party represents, warrants and undertakes to the other that it has
and
will have full power and authority to enter into and perform this
Deed
which constitutes or when executed will constitute binding obligations
on
them
in accordance with their respective
terms
|
| 9.2 |
The
Company warrants that it is an “accredited investor” as defined pursuant
to Regulation D of the Securities Act of 1933, as amended. The Company
acknowledges that the PACT Restricted Shares have not been registered
and
are “restricted securities.”
|
| 9.3 |
The
Company undertakes that for so long as PACT holds not less than 5%
of the
issued share capital of Octavian, it shall comply with any reasonable
request to provide PACT with any required management accounts or
audited
financial reports, if required by PACT’s management, audit committee,
independent auditor, the SEC, NASDAQ or any respective governments.
|
| 9.4 |
The
Company agrees to provide all required cooperation efforts, documentation,
disclosure filings (including SEC 8K, 10K, 10Q), and financial reports
in
support of the completion of this Deed, if reasonably required by
PACT.
|
| 10 |
Notices
|
| 10.1 |
Any
notice required to be given under this Agreement shall be sufficiently
given if delivered in person, forwarded by registered post or sent
by
overnight international couriers or facsimile transmission to the
relevant
party at its address, or fax number set out below (or such other
address
as the addressee has by five days prior written notice specified
to the
other parties):
|
| 10.1.1 |
To
PACT / PacificNet Games:
|
Attn: Xxxxxx
Xxxx
President
Floor
23rd, Tower A, TimeCourt,
Xx.0
Xxxxxxxxxxxx
Xxxxxxxx
Xxxxxxxx Xxxxxxx
Xxxxx
| 10.1.2 |
To
the Company/ZIRIA/Emperor:
|
Attn: Xx.
Xxxxxx Brenninkmeijer
Octavian
International Limited
Xxxx
Xxxxx
0-0
Xxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
XX0 4 AW
United
Kingdom
With
a
copy to: 00 Xxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxx
6
| 11 |
Further
assurance
|
Each
of
the Parties shall use its reasonable endeavours to do or procure to be done
all
such further acts and things and execute or procure the execution of all such
other documents as may from time to time be required for the purpose of giving
the full benefit of the provisions of this Agreement.
| 12 |
Variation
|
No
variation of this Agreement or any of the documents referred to in it shall
be
effective unless it is in writing and signed by or on behalf of each of the
parties to this Agreement.
| 13 |
Counterparts
|
This
Deed
may be executed in any number of counterparts each of which when executed shall
be an original but all the counterparts shall together constitute one and the
same instrument.
| 14 |
Governing
law and jurisdiction
|
| 14.1 |
This
Deed shall be governed by and construed in accordance with the laws
of
England.
|
| 14.2 |
Each
party irrevocably agrees to submit to the exclusive jurisdiction
of the
courts of England and Wales over any claim or matter arising under
or in
connection with this Agreement.
|
In
witness
of which
this document has been executed by the Parties as a Deed
and
delivered
on the
date set out at the beginning of this Deed.
|
Executed
as
a Deed
by
Ziria
Enterprises Limited
acting
by its duly authorised representatives
|
)
)
)
)
|
sign
here:
/s/
Harmen Benninkmeijer
|
|
Director
print
name: Xxxxxx Xxxxxxxxxxxxxx
|
||
|
sign
here:
/s/
Harmen Benninkmeijer
|
||
|
Director
/ Secretary
print
name: Xxxxxx Xxxxxxxxxxxxxx
|
7
|
Executed
as
a Deed
by
PacificNet
Inc.
acting by duly authorised representatives
|
)
)
)
)
|
sign
here:
/s/
Xxxx Xxxx
|
|
Title:
CEO
print
name: Xxxx Xxxx
|
||
|
sign
here:
/s/
Chen Xxxx Xxx
|
||
|
Title:
print
name: Chen Xxxx Xxx
|
|
Executed
as
a Deed
by
PacificNet
Games International Corporation
acting by duly authorised representatives
|
)
)
)
)
|
sign
here:
/s/
Xxxx Xxxx
|
|
Title:
CEO
print
name: Xxxx Xxxx
|
||
|
sign
here:
/s/
Chen Xxxx Xxx
|
||
|
Title:
print
name: Chen Xxxx Xxx
|
|
Executed
as
a Deed
by
Octavian
International Limited
acting
by:
|
)
)
)
|
sign
here:
/s/
Xxxxxx Xxxxxxxxxxxxxx
|
|
Director
print
name: Xxxxxx Xxxxxxxxxxxxxx
|
||
|
In
the presence of:
Witness
signature:
|
Witness
sign here:
/s/
Xxxxx Xxxxxxx
|
|
|
Witness
name:
|
print
name: Xxxxx Xxxxxxx
|
|
|
Witness
address:
|
Xxxx
Xxxxx
|
|
|
0-0
Xxxx Xx.
|
||
|
Xxxxxxxxx
XX0 0XX
|
||
|
Xxxxxx
Xxxxxxx
|
||
|
Witness
occupation:
|
Company
President
|
8
|
Executed
as
a Deed
by
Emperor
Holdings Limited
acting
by:
|
)
)
)
|
sign
here:
/s/
Xxxxxx Xxxxxxxxxxxxxx
|
|
Director
print
name: Xxxxxx Xxxxxxxxxxxxxx
|
||
|
In
the presence of:
Witness
signature:
|
Witness
sign here:
/s/
Xxxxx Xxxxxxx
|
|
|
Witness
name:
|
print
name: Xxxxx Xxxxxxx
|
|
|
Witness
address:
|
Xxxx
Xxxxx
|
|
|
0-0
Xxxx Xx.
|
||
|
Xxxxxxxxx
XX0 0XX
|
||
|
Xxxxxx
Xxxxxxx
|
||
|
Witness
occupation:
|
Company
President
|
9
