EX-10.8
MEMORANDUM OF UNDERSTANDING
MEMORANDUM OF UNDERSTANDING
Parties
Game Base Nevada, Inc. ("GBI") having offices at 0000 Xxxxxx Xxxxxx Xxxxxxx,
Xxxxx 000, Xxx Xxxxx, XX, 00000 being the agent for Gamebase International
Inc. And Freestar Technologies, Inc. ("FSTI") a Nevada corporation having
offices at 1140 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
Effective Date
July 17, 2002
Term
This Agreement shall commence on the Effective Date and shall continue until
the earlier of August 31st, 2002 or (ii) the date on which the parties execute
an Acquisition Agreement to replace this Agreement and otherwise finalize any
outstanding issues relating to the subject matter hereof.
Terms
WHEREAS FSTI is in the business of designing and licensing software that is
used in connection with facilitating and verifying financial transactions.
AND WHEREAS GBI is building an end-to-end solution for gaming processing that
includes a private debit card system. GBI also represents it's business
includes 60% of SSPG's share of the Venetian interactive joint venture; 100%
ownership of SandBox; Strategic alliance with Center 7; a Professional
management team and a board of Directors with a minimum of two Gaming
licencees; operational cash and the expectation to be cash flow
positive by August 2002. GBI also owns 75% of CurrenC (TBI), which presently
has 3.5 billion dollars in signed processing contracts and a signed
strategic alliance agreement with Storms Commerce. GBI is presently in
negotiations to make strategic investment in IGCA and GET Technologies.
AND WHEREAS FSTI is desirous GBI to assume the development, marketing and
financial aspects of FSTI
AND WHEREAS GBI is desirous to integrate FSTI technology into its gaming
portal and market FSTI authentication solution to GBI costumers and the
costumers of GBI affiliates and strategic partners.
AND WHEREAS GBI warrants they have the ability and desire to assume the
development, marketing and financial aspects of FSTI Business.
AND WHEREAS FSTI warrants that VISANET approval of its devices and software in
imminent.
AND WHEREAS the parties desire to enter into this memorandum of understanding
for the purposes of setting out their respective rights and obligations
with respect to the discovery necessary to finalize an agreement.
NOW, THEREFORE, THIS MOU WITNESSES that the Parties agree as follows:
GBI and FSTI will enter into an agreement whereby GBI agrees to assume the
development, integration, sales and marketing and financial administration of
the agreement, effective Xxxxxx 0xx, 0000.
XXX and FSTI agree to share gross margin on the sale of authentication devices
on a 50/50 basis. Gross margin is defined as net sales revenue minus direct
cost of the devices.
FSTI agrees to commit to invest US$3,500,000 into GBI and or GBI affiliates for
12.5% of GBI and or affiliates with the exception of Rahaxi in which
FSTI will earn an initial 35% interest. GBI warrants it has raised $2.6
million in cash to date and secured 100% of the assets of SandBox and is
seeking an additional $3.5 million in addition to the $3.5 million contemplated
to be invested by FSTI. FSTI will have until August 31st, 2002 to
complete its Due Diligence and execute final contract.
GBI will guarantee the debenture with vFinance Investments. In the interim FSTI
will use the proceeds of the debenture to fund operations.
FSTI will grant GBI and or GBI management options on 25% off FSTI stock fully
diluted, to be earn as follows:
25% after signed formal agreement. Option price to be $0.20 per share.
25% on fully executing the guarantee of vFinance debenture. Option price to be
$0.40 per share.
25% after four (4) consecutives month of providing managements services as
defined above. Option price to be $0.60 per share.
25% when the stock price of FSTI is $0.75 or higher for a period of two (2)
consecutives months. Option price to be $0.75 per share.
If all options are exercise FSTI will receive an investment of $5.85 million at
the current authorize and issued capitalization. Further increase in FSTI
capitalization will result in GBI being allowed further options to protect
their 25% fully diluted position.
Xxxx Xxxx to be given a seat on GBI's board.
GBI will have the right to claw back 22.5% of FSTI's interest in Rahaxi based
on GBI delivering $10,000,000 sustainable monthly increments of gross
processing revenue to Rahaxi. FSTI percentage interest will decline by 2.25%
per $10,000,000 increments to a floor of 12.5%.
GBI agrees to draft all legal contracts relating to the above for the review of
FSTI attorneys. Both parties to be responsible for the respective to legal
cost.
This agreement subject only to FSTI's Due Diligence (to be completed by August
31st, 2002) and formal contract.
All amount are in US dollars
Time shall be of the essence.
Marketing Activities/Publicity
Unless otherwise expressly stated herein, each party shall be solely
responsible for all costs and expenses in performing its respective discovery
activities pursuant to this Agreement.
Neither party may issue a press release nor may it make any public reference to
this Agreement or the other Party hereto without the prior approval of such.
Exclusive or Non-Exclusive Relationship
This Agreement is exclusive for gaming and strategic partners of GBI and non-
exclusive for GBI in all other aspects.
Confidentiality
"Confidential Information" means (whether disclosed orally or in writing and
whether or not marked or designated as confidential) all technical and non-
technical information including patent, copyright, trade secret, and
proprietary information, techniques, sketches, models, inventions, know-how,
processes, software programs and formulae related to the current, future and
proposed products and services of a party, a party's suppliers and
customers, and includes, without limitation, a party's information concerning
research, development, financial information, manufacturing, customer lists,
business forecasts, sales, merchandising, marketing and business plans. The
terms of this Agreement are also Confidential Information.
Neither party (the "Receiving Party") shall use nor disclose the Confidential
Information of the other party (the "Disclosing Party") to any third party
except as necessary to perform its obligations under this Agreement. The
Receiving Party agrees that it shall treat all Confidential Information of the
Disclosing Party with the same degree of care as the Receiving Party accords to
its own Confidential Information, but in no case less than reasonable
care. The Receiving Party may disclose Confidential Information only to those
of its employees and contractors who need to know such information, and
the Receiving Party certifies that such employees and contractors have
previously agreed, either as a condition of employment or in order to obtain
the Confidential Information, to be bound by terms and conditions substantially
similar to those terms and conditions applicable to the Receiving Party under
this Agreement. In the event of a breach of these confidentiality provisions,
the Disclosing Party shall be entitled to seek injunctive relief, in
addition to its legal and other equitable remedies. The confidentiality
obligations in this Agreement shall survive any expiration or termination of
this Agreement.
The Receiving Party's obligations under this Agreement with respect to any
portion of the Confidential Information shall not apply to any such
portion which the Receiving Party can demonstrate (i) was in the public domain
through no fault of the Receiving Party at or subsequent to the time such
portion was communicated to the Receiving Party; (ii) was rightfully in the
Receiving Party's possession free of any obligation of confidence at
or subsequent to the time such portion was communicated to the Receiving Party;
or (iii) was developed by employees of the Receiving Party independently of and
without reference to any information communicated to the Receiving Party by
the Disclosing Party. A disclosure of Confidential Information by the
Receiving Party in response to a valid order by a court or as otherwise
required by law shall not be considered to be a breach of this
Agreement or a waiver of confidentiality for other purposes.
Governing Law
This Agreement will be governed by and construed in accordance with the laws of
Nevada. Any dispute, controversy or claim arising out of or in connection
with this Agreement, or the breach, termination or invalidity thereof, shall be
finally settled through arbitration in accordance with the State of Nevada.
The award shall be final and binding on the Parties.
Assignment
Neither party may assign its rights or obligations under this Agreement without
the express written consent of the other party, which consent shall not
be unreasonably withheld.
Independent Contractors
Nothing in this Agreement shall be construed to make the parties partners,
joint ventures, representatives or agents of each other, nor shall
either party so represent to any third person. Neither party shall have the
right to obligate or bind the other party in any manner whatsoever, and
nothing contained in this Agreement shall give or is intended to give any
rights of any kind to any third parties. The parties hereunder are acting in
performance of this Agreement as independent contractors engaged in the
operation of their own respective businesses.
Waiver
Either party's failure to enforce any provision of this Agreement shall not in
any way be construed as a waiver of any such provision, or prevent that
party thereafter from enforcing each and every other provision of this
Agreement.
Entire Agreement
This Agreement constitutes the entire agreement between the parties relating to
this subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations, and agreements, whether written or oral. This
Agreement may be amended or modified only in a writing signed
by the parties. No oral waiver, amendment or modification will be effective
under any circumstances whatsoever.
IN WITNESS WHEREOF, the duly authorized representatives of the
parties have executed this Agreement as of the Effective Date.
Game Base, Nevada Inc (GBI) FreeStar Technologies, Inc. (FSTI)
By: /s/ Xxx Xxxxxxx By: /s/ Xxxx Xxxx
Xxx Xxxxxxx Xxxx Xxxx
President and CEO President and CEO.
Date: July 17, 2002 Date: July 17, 2002
