Exhibit 4.8
DATED 2002
WORLD GAMING PLC (1)
- and -
STARNET SYSTEMS INTERNATIONAL INC. (2)
- and -
SPORTINGBET PLC (3)
______________________________________________________
LOAN AGREEMENT
______________________________________________________
berwinleightonpaisner
Xxxxxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxx XX0X 0XX
tel x00 (0)00 0000 0000
fax x00 (0)00 0000 0000
DATED 2002
PARTIES
(1) WORLD GAMING PLC, a company registered in England whose registered
office is at 00 Xxxxxx Xxxxxx, Xxxxxxx XX0 0XX ("WG"); and
(2) STARNET SYSTEMS INTERNATIONAL INC., a company registered in Antigua
whose registered office is at The CIBC Banking Centre, Old Parlham
Road, St Xxxxx, Antigua ("Starnet"), (together the WG Group" and each a
member of the WG Group); and
(3) SPORTINGBET PLC, a company registered in England whose registered
office is at 6th Floor, Transworld House, 00-000 Xxxx Xxxx, Xxxxxx XX0X
0XX ("Sportingbet").
INTRODUCTION
(A) Sportingbet has agreed to make available to the WG Group a loan
facility on the terms set out in this Agreement.
(B) The WG Group has agreed to provide certain services to Sportingbet on
the terms set out in this Agreement.
OPERATIVE PROVISIONS
1 DEFINITIONS
1.1 In this Agreement the following expressions shall have the meanings set
out below, save as the context otherwise requires. All other defined
terms in this Agreement shall have the meanings given to them in the
Licence Agreement, Charge Agreement and/or Escrow Agreement as
applicable.
"Charge Agreement" the agreement creating a first charge over
the Hardware entered into between Starnet
Systems International Inc and Sportingbet
plc;
"Change of Control" the occurrence of any of the following:
(i) in any transaction or series of
transactions a person or group unaffiliated
with the WG Group acquires securities
representing more than 50% of the
shareholder voting power in any member of
the WG Group; or
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(ii) a merger or consolidation involving any
member of the WG Group being consummated and
resulting in less than 50% of the
outstanding voting securities of the
surviving or resulting entity being owned by
the existing shareholders; or
(iii) WG or any member of the WG Group
selling all or substantially all of its
assets to a person or entity which is not a
subsidiary of WG.
"Escrow Account" the account held by Xxxxxx Xxxxxxxx Innocent
solicitors of 000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxx X0X 0XX in the names of WG and
Sportingbet;
"Escrow Agreement" the agreement lodging the source code to the
Software in escrow between Starnet Systems
International Inc. and Internet Opportunity
Entertainment Limited and the NCC Escrow
International Limited;
"Hardware" the hardware used by the WG Group to provide
the services to Sportingbet as referred to
in the Licence Agreement and which the WG
Group agrees shall not be used for any other
purpose or in respect of any other licensees
of the WG Group;
"Licence Agreement" the licence agreement entered into between
Internet Opportunity Antigua (a subsidiary
of Sportingbet) and Softec Systems
Carribbean Inc. (now Starnet) dated 19 March
1998 for the provision of certain software
and related services by the WG Group to
Sportingbet;
"Loan" the maximum aggregate principal amount of
US$1.5 million;
"Net Monthly Revenue" the monthly revenue derived by Sportingbet
under the Licence Agreement;
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"Percentage of the Net the percentage of Net Monthly Revenue paid
Monthly Revenue" by Sportingbet to the WG Group pursuant to
the Licence Agreement;
"Secure Site" the physical site at which the Hardware and
Software shall be located and operated,
which shall be separate from other hardware,
software or kit under the control of the WG
Group and which shall be found and
maintained at the secure offices or
facilities of Cable and Wireless at Xxxxx
Xxxx, St John's Antigua, West Indies;
"Security Interest" means any debenture, mortgage, fixed or
floating charge, hypothecation, pledge, lien
or other encumbrance or security of any kind
whatsoever over the whole or any part of the
goodwill, undertaking, property, assets or
revenues (including uncalled capital)
present or future of any member of the WG
Group but excluding any lien arising in the
usual course of the day to day trading as
now conducted securing monetary obligations
not more than sixty days overdue or which
are being contested in good faith and any
lien or banker's right of set-off arising
solely by operation of law in the ordinary
course of trading.
"Software" the software referred to as the Licensed
Software in the Licence Agreement;
"subsidiary or have the meaning ascribed to them
subsidiaries" respectively by Section 736 of the Companies
Xxx 0000 (as amended by Section 144 and 21
and Schedule 9 of the Companies Xxx 0000 but
irrespective of any further amendments or
re-enactments thereof);
"System" the Software and the Hardware located at the
Secure Site.
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1.2 Unless the context otherwise requires:
1.2.1 words (including words and expressions defined herein) denoting the
singular shall include the plural and vice versa;
1.2.2 any reference in this Agreement to this Agreement or any other
agreement or document shall be construed as a reference to this
Agreement or, as the case may be, such other agreement or document as
the same may have been, or may from time to time be, amended, varied,
novated or supplemented;
1.2.3 any reference in this Agreement to a statute shall be construed as a
reference to such statute as the same may have been, or may from time
to time be, amended or re-enacted;
1.2.4 any reference herein to a "Clause" shall be construed as a reference to
a Clause hereof; and
1.2.5 clause headings are for ease of reference only.
2 ADVANCE OF THE LOAN
2.1 Subject to the terms and conditions of this Agreement Sportingbet shall
make the Loan available to the WG Group on signature of this Agreement
at Sportingbet's option by transferring the Loan to the Escrow Account
and at such date the WG Group shall furnish appropriate bank account
details to Sportingbet for this purpose. If the Loan is paid into the
Escrow Account the parties will agree within 24 hours what proportion
of the Loan will be immediately released to the WG Group or its
creditors and the agreed timetable for payment of the balance of the
Loan. Should any event occur under this Agreement which will entitle
Sportingbet to demand full repayment of the Loan, it will be obliged to
first utilise any Loan monies in the Escrow Account to satisfy or
partially satisfy the WG Group's obligations.
2.2 It is a term of the Loan that prior to drawdown the WG Group procure
that Sportingbet receives the undermentioned security as a continuing
security for all moneys, obligations and liabilities certain or
contingent now or hereafter due, owing or incurred by WG Group to
Sportingbet, namely:
2.2.1 the Charge Agreement; and
2.2.2 the Escrow Agreement
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2.3 The Loan shall bear interest at the rate of 2% above LIBOR. All
interest shall accrue from day to day and be calculated on the basis of
the actual number of days elapsed and a 365 day year.
2.4 Sportingbet shall deduct from the Percentage of Net Monthly Revenue
US$225,000 per month from November 2002 to March 2003 inclusive and
US$62,500 per month from April 2003 to September 2003 inclusive as
repayment of the Loan by the WG Group provided that nothing in this
Agreement, the Licence Agreement, the Charge Agreement or the Escrow
Agreement shall prohibit or restrict the WG Group from repaying the
Loan in whole or in part in addition to making the monthly repayments
at any time. In any event, the WG Group shall repay 75% of the Loan no
later than 31 March 2003 (together with interest accrued to that date)
with the full amount of the Loan (together with interest accrued) being
repaid no later than 30 September 2003. No amount prepaid may be
redrawn.
2.5 Without prejudice to the provisions of clause 2.4, the WG Group shall
use its reasonable endeavours to repay the Loan in full together with
all accrued interest thereon as soon as possible after the date of this
Agreement and for this purpose Sportingbet shall be entitled to see,
and the WG Group hereby undertakes to provide, all information whether
financial, operating or otherwise as Sportingbet shall deem reasonably
necessary for the purpose of monitoring the ability of the WG Group to
make early repayment of the Loan provided that nothing shall oblige the
WG Group to provide information which it is restricted from making
available due to a legal or regulatory reason or information which is
otherwise confidential to its other customers.
2.6 All sums from time to time payable by the WG Group in connection with
the Loan whether principal interest or otherwise shall be paid to
Sportingbet on the due date no later than 12 noon in US Dollars in
London in cleared funds free and clear of any present or future taxes,
duties, charges, fees or withholdings and without any set off or
counter claim or any condition or deduction whatsoever. If the WG Group
is compelled by law to make any deduction or withholding the WG Group
will promptly pay to Sportingbet such additional amount as makes the
net amount received by Sportingbet equal to the full amount payable by
the WG Group had there been no deduction or withholding.
2.7 This Agreement and the Charge Agreement shall terminate with immediate
effect on the repayment of the Loan together with all accrued interest
thereon in full.
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2.8 The WG Group shall from the date hereof at all times maintain and keep
available the Secure Site.
2.9 The WG Group shall maintain throughout the term of this Agreement
appropriate insurance in respect of the System.
2.10 The WG Group hereby agrees that Sportingbet's representative, Xxxxx
Xxxxxxx, shall as from the date hereof have full and unfettered access
to the premises of Starnet and Inphinity (a subsidiary company within
the WG Group) and to the operations of such companies (and all relevant
documentation and processes) for a period of up to 31 August 2002 for
the purposes of monitoring the WG Group's operations and verifying the
adequacy of the Secure Site and thus protecting Sportingbet's position
provided that Sportingbet provides reasonable notice of such access to
Starnet and Inphinity and procures that Xxxxx Xxxxxxx indefinitely
maintains the confidentiality of all and any information to which he
has access as a result of this clause 2.10.
2.11 The WG Group shall provide to Sportingbet:
2.11.1 on the date hereof a certified true copy of a resolution of each of the
relevant members of the WG Group's Board of Directors accepting the
terms and conditions of this Agreement and approving and authorising
the execution, delivery and performance of this Agreement, the Escrow
Agreement and the Charge Agreement and authorising a specified person,
or persons, to countersign and return to Sportingbet the duplicate of
this Agreement and further authorising specified persons to execute in
the manner prescribed by law, the Escrow Agreement and the Charge
Agreement; and
2.11.2 within 7 days of the date hereof a legal opinion from Xxxxxxx & Co,
Starnet's Antiguan Counsel in a form acceptable to Sportingbet relating
to the due execution and enforceability of all relevant documentation.
3 RIGHTS OF SPORTINGBET
3.1 Sportingbet shall have the right (notwithstanding any other right or
remedy provided to Sportingbet hereunder or under the Charge Agreement,
the Escrow Agreement or otherwise) to immediately access the Secure
Site and use and operate the Hardware and Software as it sees fit for
the purpose of operating its business as envisaged under the Licence
Agreement on the occurrence of i) any of the Events of Default set out
in clause 3.4, or ii) clause 3.5 and, in respect of the events set out
in clause 3.5, such right shall endure until the relevant event comes
to an end whether by rectification by the WG Group or any third party
to the reasonable satisfaction of Sportingbet.
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Accordingly but subject as aforesaid, upon Sportingbet's reasonable
satisfaction that the event which allowed Sportingbet to activate its
right under this clause (as set out in clause 3.5) has been rectified,
Sportingbet shall vacate the Secured Site and return the keys and
passwords provided pursuant to clause 3.2 and cease use of the Hardware
and Software (save as permitted under the Licence Agreement) and the WG
Group shall resume provision of the services as set out in the Licence
Agreement. Upon receipt of the returned keys and passwords, the WG
Group shall re-lodge such keys and passwords (whether new versions or
not) in escrow as envisaged in clause 3.2.
3.2 The WG Group shall, within 7 days of the date of this Agreement, enter
into an escrow access agreement with a third party, Cable & Wireless
who is resident in Antigua for such third party to hold keys and
passwords necessary for access by Sportingbet to the System on the
basis that release to Sportingbet of such keys and passwords would be
made immediately if any of the events listed in clauses 3.4 or 3.5
occur.
3.3 The parties agree that the Secure Site will be located on premises
owned and/or operated by a third party, Cable & Wireless in Antigua and
the WG Group shall provide to such third party within 7 days of the
date of this Agreement such written authority for Sportingbet as it may
require to enable it to enter the Secured Site and use and operate the
Hardware and Software immediately on the occurrence of any of the
events set out in clauses 3.4 or 3.5 (and the WG Group shall provide a
copy of such authority to Sportingbet at the same time as it is given
to such third party).
3.4 The occurrence of any of the following shall be an Event of Default:
3.4.1 WG or any of its subsidiaries (i) voluntarily ceases to conduct its
business in the ordinary course; (ii) commences any insolvency or
equivalent or analogous proceeding with respect to itself in any
jurisdiction; or (iii) takes any action to effectuate or authorise any
of the foregoing save in relation to any arrangements or discussions
entered into with creditors prior to the date hereof of which WG has
notified Sportingbet in writing; or
3.4.2 a petition is presented for the winding up or administration of WG or
any member of the WG Group or an order is made or a resolution is
passed for the winding up of WG or any member of the WG Group or for
any equivalent or analogous proceeding under the law of the
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jurisdiction in which each such company is incorporated or any
jurisdiction in which it carries on business or has assets or
liabilities except for the purposes of a reconstruction or
amalgamation; or
3.4.3 a liquidator, administrator, administrative receiver, receiver,
trustee, or similar officer is appointed in respect of WG or any member
of the WG Group (or any equivalent or analogous proceeding) or in
respect of all or any of the assets of WG or any member of the WG
Group; or
3.4.4 any involuntary insolvency or equivalent or analogous proceeding is
commenced or filed against WG or any subsidiary; or WG or any
subsidiary admits the material allegations of a petition against it in
any insolvency or any equivalent or analogous proceeding, or an order
for relief (or similar order) is ordered in any insolvency or
equivalent or analogous proceeding; or WG or any of its subsidiaries
acquiesces in the appointment of a receiver, administrator, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar person (or equivalent or analogous
proceeding) for itself or a substantial portion of its property or
business; or
3.4.5 a Change of Control of the WG Group; or
3.4.6 at any time the Charge (as defined in the Charge Agreement) ceases to
create first ranking security interests over any of the property and
assets secured or intended to be secured thereby;
3.4.7 the WG Group fails to pay by the due date, in the currency and manner
provided in this Agreement, any sum payable by it under this Agreement;
or
3.4.8 the WG Group commits any breach of any provision of Clauses 3.2 or 3.3.
3.5 The occurrence of the following shall be an Event of Default:
3.5.1 the WG Group is unable or unwilling to perform an obligation or provide
a service pursuant to the Licence Agreement which has a material and
immediate adverse impact on the operation of the System save in
instances of force majeure (as described below) and pursuant to the
service levels to be agreed between the parties within 7 days of the
date hereof. For the avoidance of doubt the WG Group, for the purposes
of this clause, will be responsible for matters within its control
which have a material and immediate adverse impact on the operation of
the System and pursuant to the service levels agreed; or
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3.5.2 any material breach of any representation or warranty made pursuant to
this Agreement by any member of the WG Group hereunder.
3.6 The WG Group shall, so far as it is reasonably able and acting in good
faith at all times, promptly give notice to Sportingbet of the
occurrence of or the likelihood of the imminent occurrence of any of
the events set out in clauses 3.4 or 3.5. Prior to Sportingbet
exercising any of its rights set out in this clause 3, it shall give
notice in writing to the WG Group and shall so far as it is reasonably
able provide details of action it intends to take.
3.7 The System referred to in this clause 3 shall be held by the WG Group
on trust for Sportingbet until repayment of the Loan and all accrued
interest is made in full by the WG Group subject always to the Charge
Agreement and the Escrow Agreement.
3.8 Each of the WG Group hereby indemnifies Sportingbet on demand from and
against all claims, costs, losses and expenses certified by it as
incurred by it as a consequence of (i) default by the WG Group or any
member of the WG Group in the due performance of any of the obligations
expressed to be assumed by the WG Group or any member of the WG Group
in this Agreement, the Escrow Agreement and/or the Charge Agreement or
(ii) any other breach of this Agreement, the Escrow Agreement and/or
the Charge Agreement by the WG Group.
3.9 Sportingbet may (without prejudice to any of its rights) upon and at
any time after the happening of an Event of Default excluding such
Events of Default under clauses 3.5.1 and 3.5.2 by notice in writing to
the WG Group declare that the Loan has become immediately due and
payable, whereupon the WG Group shall forthwith repay the same together
with all interest accrued and all other sums payable under this
Agreement save that with regard to material breaches of representation
and warranty pursuant to clause 3.5.2 the WG Group shall have a period
of 28 days to rectify after which the Loan will become immediately due
and payable if such breaches remain outstanding.
4 WARRANTIES
4.1 Each party warrants and represents to the other that:-
4.1.1 it is a company duly organised, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
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4.1.2 by entering into this Agreement it does not contravene any applicable
law, regulations or code of conduct and that it will continue to comply
with all applicable laws, regulations or codes of conduct;
4.1.3 it or its subsidiaries have the power and authority and governmental
licences, authorisations, consents and approvals to own its assets,
carry on its business and to execute, deliver, and perform its
obligations under this Agreement, the Licence Agreement, the Escrow
Agreement and the Charge Agreement;
4.1.4 it is duly qualified and is licensed and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification or
licence;
4.1.5 each of this Agreement, the Licence Agreement, the Escrow Agreement and
the Charge Agreement constitute the legal, valid and binding
obligations enforceable against each party in accordance with their
respective terms, except as the enforcement thereof may be limited by
applicable bankruptcy or other similar laws affecting creditors' rights
generally or by general equitable principals.
4.2 Each of the WG Group hereby warrants and represents to Sportingbet that
the execution, delivery and performance of this Agreement, the Licence
Agreement, the Escrow Agreement and the Charge Agreement have been duly
authorised by all necessary action and do not and will not:
4.2.1 contravene the terms of any of that person's constitutional documents;
4.2.2 conflict with or result in a material breach or contravention of, or
the creation of any security interest under, any document evidencing
any contractual obligation to which such person is a party or any
order, injunction, writ or decree of any governmental authority to
which such person or its property is subject; or
4.2.3 violate any legal requirement.
4.3 Each of the WG Group hereby jointly and severally warrants and
represents to Sportingbet that:
4.3.1 it has good and marketable title to all assets and property necessary
or used in the ordinary conduct of its business and that the assets and
property of WG and each of its subsidiaries are not subject to any
Security Interests and in particular but without prejudice to the
generality of the forgoing, the Hardware is not subject to any such
Security Interests, liens, vendor or other third party rights;
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4.3.2 the WG Group comprises all those companies sufficient and required to
operate the System;
4.3.3 the charge referred to in the Charge Agreement is the first ranking
charge over the Hardware;
4.3.4 it and each of its subsidiaries own or are licensed or otherwise have
the right to use all of the patents, trademarks, service marks, trade
names, copyrights, contractual franchises, authorisations and other
rights that are reasonably necessary for the operation of their
respective businesses, without material conflict with the rights of any
other person. To the best knowledge of the WG Group and each of its
subsidiaries, no slogan or other advertising device, product, process,
method, substance, part or other material now employed by such company
infringes in any material respect upon any rights held by any other
person; and
4.3.5 so far as the WG Group is aware after due and careful enquiry, no claim
or litigation in respect of clause 4.3.4 is pending or known to be
threatened and no patent, invention, device, application, principle,
statute, law, rule, regulation, standard or code is pending or
proposed.
4.4 The warranties and representations made by WG and Starnet in this
Clause 4 will be deemed to be repeated by each of them on and as of
each day during which the Loan or any part thereof is outstanding.
5 FURTHER ASSURANCE
The parties agree to execute, do and perform such further acts, things,
deeds and documents as may from time to time be required to full legal
and practical effect to this Agreement.
6 THIRD PARTY RIGHTS
Except as otherwise expressly stated herein, nothing in this Agreement
confers any rights on any person (other than the parties hereto)
pursuant to the Contract (Rights of Third Parties) Xxx 0000.
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7 WAIVER AND REMEDIES
7.1 No waiver by either party of any requirement of this Agreement, or of
any remedy or right under this Agreement, shall have effect unless
given in writing signed by that party. No waiver of any particular
breach of the provisions of this Agreement shall operate as a waiver of
any repetition of such breach.
7.2 Failure or delay by either party to exercise any right or remedy under
this Agreement does not constitute a waiver or bar to exercise of that
right or remedy.
8 ENTIRE AGREEMENT
The terms and conditions of this Agreement represent the entire
agreement between the parties relating to its subject matter and the
parties agree that insofar as inconsistencies arise between this
Agreement and the Licence Agreement, the terms of this Agreement shall
prevail.
9 FORCE MAJEURE
Neither party shall be deemed to be in breach of this Agreement or
otherwise be liable to the other party for any delay in performance of
any failure to perform any obligations under this Agreement ( and time
for performance shall be extended accordingly) if and to the extent
that such failure or delay is due to circumstances beyond its
reasonable control including without limitation flood, fire, hurricane,
earthquake, riots industrial dispute not involving employees of such
party, power cuts, and network or systemic viruses. In relation to
power cuts, network or systemic viruses the terms of the service level
agreement referred to in clause 3.5.1 will apply.
10 NATURE OF OBLIGATIONS
The obligations, liabilities and covenants on the part of the WG Group
contained in this Agreement shall be joint and several.
11 ASSIGNMENT
This Agreement is personal to the parties and may not be assigned by
either party without the prior written consent of the other party (such
consent not to be unreasonably withheld or delayed).
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12 NOTICES
12.1 Any communication or notice to be made or given by one person to
another in connection with the Agreement shall be in writing in English
and shall be sent by first class mail or air mail, or by fax or email
and (unless that person has by fifteen days' prior notice to the other
specified another address, fax number or email address) shall be made
or given to that person at the address, fax number or email address
specified in this Agreement, each communication or notice being deemed
to have been made or given in the absence of earlier receipt upon hand
delivery to such address or, as the case may be, two business days
after being posted to it in an envelope addressed to it at that
address, or one hour after transmission (in the case of fax messages,
only if a transmission report is generated by the sender's fax machine
recording a message from the recipient's fax machine, confirming that
the fax was sent to the number indicated below and confirming that all
pages were successfully transmitted).
12.2 The WG Group hereby appoints and authorises Law Debenture Corporate
Services Limited of Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX to
accept service on behalf of the WG Group of all legal process and
notices and service on such firm (or such substitute) shall be deemed
to be service on the WG Group and agrees no later than by Wednesday 31
July 2002 to execute the standard form appointment of process agent
authority agreement provided by Law Debenture provided that Sportingbet
simultaneously delivers a copy of any such legal process to the
solicitors to the WG Group found at Xxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxxx, Xxxxxx Xxxxxx XX0X 0XX for the attention of Xxxxxx
Xxxxxxx-Xxxxx.
13 COSTS
Each party shall bear its own costs in the preparation and negotiation
of this Agreement, the Escrow Agreement and the Charge Agreement.
14 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of England and the parties submit to the exclusive
jurisdiction of the English Courts.
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Signed for and on behalf of )
WORLD GAMING PLC ) ....................................
Signed for and on behalf of )
STARNET SYSTEMS INTERNATIONAL INC ) ....................................
Signed for and on behalf of )
SPORTINGBET PLC ) ....................................
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