DATED 3 November, 1998
EARTH LTD.
ELECTRONIC FUNDRAISING COMPANY PLC
INFINEX INTERNATIONAL LTD
AGREEMENT
Xxxxxxxx Xxxxx Xxxxxx Xxxxxx Xxxxxx XX0X 0XX
Telephone x00 000 000 0000 Fax x00 000 000 0000
DATED day of 1998
PARTIES
1 EFC ELECTRONIC FUNDRAISLNG COMPANY PLC a
company incorporated in England and Wales;
and
2 Infinex INFINEX INTERNATIONAL LTD a Bermuda Exempt
Company;
3 Xxxxxxxx XxxXxxxxx XXXXXXXX XXXXXXXXX
3 Parties EFC, INFINEX and XXXXXXXX XXXXXXXXX
OPERATIVE PROVISIONS
1 Infinex has developed at significant expense a project known as the
"Earth Lottery" and has petitioned the Bermuda Government to pass a
special Act of Parliament entitled the "Earth Ltd. Xxx 0000" pursuant
to which Infinex established "Earth Ltd." in 1997 and transferred to
Earth Ltd. all right title and interest to said "Earth Lottery" project
and US$51,000 cash in return for 51,000 shares of Earth Ltd. being the
entire issued share capital of Earth Ltd. Earth Ltd. is solvent and has
no significant debts.
2 The President of Infinex, Xxxxxxxx XxxXxxxxx, has been the project
leader of the Earth Lottery(tm) project. Infinex is prepared to become
a consultant to EFC for the purpose of "seconding" Xxxxxxxx XxxXxxxxx
to EFC for a period of time in return for a further Option,
compensation contribution and other understandings as principally set
forth herein.
3 The shares of EFC referred to herein rank pari passu in all respects
with the ordinary shares of EFC referred to in EFC's prospectus issued
in July 1998.
4 The Parties fully understand the merits of having EFC acquire Earth
Ltd. and having essentially the full time and attention of Xxxxxxxx
XxxXxxxxx dedicated to the success of EFC, and therefore, the Parties
have agreed as follows:
5 Warranties
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5.1 Infinex and Xxxxxxxx XxxXxxxxx jointly and severally covenant to EFC
that all information supplied and all accompanying documents supplied
by Infinex, Infinex' s Solicitors, Xxxxxxxx XxxXxxxxx or Xxxxxxxx
XxxXxxxxx`s Solicitors to EFC or EFC's Solicitors relating to the
businesses, activities, affairs, assets or liabilities of Earth Ltd.
was when given and is true and accurate in all material respects and
materially discloses full, clear and accurate descriptions of every
matter to which they relate.
5.2 There are no material facts or circumstances in relation to the assets,
business or Financial condition of Earth Ltd. which have not been fully
and fairly disclosed to EFC or EFC's Solicitors and which, if
disclosed, might reasonably have been expected to affect the decision
of EFC to enter into this Agreement. For the avoidance of doubt Infinex
and Xxxxxxxx XxxXxxxxx jointly and severally covenant to EFC that as of
the date hereof Earth Ltd. is solvent and able to pay all of its
existing debts and to the best of their knowledge and belief Earth Ltd.
has no significant liabilities nor are they aware of any claims of any
third parties.
5.3 Infinex and Xxxxxxxx XxxXxxxxx jointly and severally covenant to EFC
that Earth Ltd. has no outstanding tax liabilities and has no trading
or other receipts which are subject to taxation.
5.4 Infinex and Xxxxxxxx XxxXxxxxx jointly and severally covenant to EFC
that:
5.4.1 Earth Ltd., per the Earth Ltd. Xxx 0000 has obtained the
licence and consent required to run the Earth Lottery, a
non-Internet lottery; and
5.4.2 The licence and consent, as fully set out in the Earth Ltd.
Act 996, is valid and subsisting; and
5.4.3. No party is in breach of any of the licence or consent and
there is nothing in them that might prejudice their
continuation and renewal except for the conditions stated
within the Earth Ltd. Xxx 0000.
6. Earth Ltd. Acquisition Transaction
EFC hereby acquires from Infinex the entire share capital of Earth LTD.
for the purchase price of Five Hundred and Fifty Thousand (550,000)
fully paid up Ordinary Shares of EFC thereby making Earth Ltd. a wholly
owned subsidiary of EFC. For the avoidance of doubt EFC is not obliged
to issue any shares to Infinex hereunder until the Conditions
Subsequent contained in clause 13.1 are satisfied.
/S/ /S/ /S/ /S/
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7 Option
7.1 EFC hereby grants a non-cancellable Option to Infinex to acquire Two
Hundred Thousand (200,000) Ordinary Shares of EFC. For the avoidance of
doubt EFC is not obliged to issue any shares to Infinex hereunder until
the Conditions Subsequent contained in clause 13.1 are satisfied.
7.2 This Option is exercisable at any time from 16 December 1998 through to
26 April 2001(30 months).
7.3 The price paid shall be Two Pounds Fifty Xxxxx UK Sterling (2.50 GBP)
per share in cash upon exercise.
7.4 This Option may be assigned and/or exercised in whole or in part and in
multiple exercises of any lesser number of shares at any one time (but
never less than 10,000 shares for any one exercise) and not surpassing
the 200,000 share total stated herein above and not later than the
stated expiration date of said 26 April 2001.
7.5 Infinex undertakes that it shall not prior to 1 August 1999 dispose of
any of the shares issued to it under clauses 6- 7.4 inclusive.
8 Consulting Appointment of Infinex for "seconding" of Xxxxxxxx XxxXxxxxx
8.1 EFC shall pay Infinex a consulting payment of Five Thousand Pounds UK
Sterling (5,000 GBP) per month on the 15th day of each month the first
payment being made on 15 November 1998.
8.2 The consulting payment shall be payable until further notice to the
account of Infinex at UBS, Geneva Switzerland.
8.3 Subject to clause 9 and clause 10 this consulting appointment shall
automatically terminate not later than 15 May 2002 provided that EFC or
Infinex or Xxxxxxxx XxxXxxxxx may terminate this consulting appointment
on notice, such notice to be capable of taking effect at any time on or
after 15 January 2000.
/S/ /S/ /S/ /S/
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8.4 In consideration of such monthly payments Infinex hereby agrees to
"second" its Chairman and President, Xxxxxxxx XxxXxxxxx, to EFC as a
consultant at no salary or fee paid directly to Xxxxxxxx XxxXxxxxx.
8.5 Xxxxxxxx XxxXxxxxx will dedicate essentially full time to the general
non - UK managing of the global affairs of EFC along with the other
directors of EFC.
8.6 Infinex further authorises Xxxxxxxx XxxXxxxxx to become a non-Executive
Director of EFC.
8.7 Any expenses directly related to the affairs of EFC incurred by
Xxxxxxxx XxxXxxxxx concerning activities for and on behalf of EFC shall
be reimbursed to Xxxxxxxx XxxXxxxxx by EFC with the clear understanding
that all such expenses must be reasonable and either pre-approved or
subsequently approved by EFC.
8.8 Neither Infinex nor Xx XxxXxxxxx intends to become domiciled nor
resident in the UK for tax purposes. If either party does become
domiciled in the UK, then any tax payable as a consequence of such
action shall be paid in full by the recipient of the payment made under
clause 8.
8.9 It is further understood that substantially all activities of Xxxxxxxx
XxxXxxxxx concern the non-UK global activities of EFC.
9 Incapacity
9.1 If Xxxxxxxx XxxXxxxxx is prevented due to illness accident or any other
incapacity from properly performing his duties either for a period or
periods aggregating 10 working days in any 3 consecutive calendar
months resulting in an average of less than 134 hours of time per month
or for 30 consecutive working days, the consulting appointment shall
terminate on the option of Xxxxxxxx XxxXxxxxx or EFC by giving 30 days'
notice in writing. No compensation or further payment shall be made
under clause 8 after expiry of this notice.
10 Summary Termination of Employment
10.1 The consulting arrangement of Xxxxxxxx XxxXxxxxx may be terminated by
EFC without notice or payment in lieu of notice and without liability
for compensation in damages if Xxxxxxxx XxxXxxxxx:
/S/ /S/ /S/ /S/
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10.1.1 commits an act of gross misconduct or of gross neglect or a
material or repeated (following warnings) breach or
non-observance of an obligation in this agreement, or is
guilty of conduct tending to bring himself or a member of EFC
into disrepute; or
10.1.2 has an interim receiving order made against him, becomes
bankrupt or makes a composition or enters into any deed of
arrangement with his creditors; or
10.1.3 is convicted of an arrestable criminal offence (other than an
offence under road traffic legislation for which a fine or
non--custodial penalty is imposed); or
10.1.4 becomes of unsound mind or becomes a patient under the Mental
Health Xxx 0000; or
10.1.5 is convicted of an offence under the Part V of the Criminal
Justice Act 1 993 or under any other statutory enactment or
regulations relating to insider dealing; or
10.1.6 resigns as a director of EFC otherwise than at the request of
the Board; or
10.1.7 is disqualified from being a director of a company by reason
of an order made by a competent court; or
10.1.8 fails to reach performance requirements set by the Board after
receiving a written warning regarding poor performance from
the Company.
10.2 Following a termination under clause 10. 1, no further payment shall be
made to Infinex or expenses paid to Xxxxxxxx XxxXxxxxx as detailed in
clause 8.
10.3 The termination by EFC of the consultancy appointment shall be without
prejudice to any claim which EFC or Infinex or Xxxxxxxx XxxXxxxxx may
have for damages arising from breach this agreement.
/S/ /S/ /S/ /S/
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10.4 The termination by EFC or Xxxxxxxx XxxXxxxxx of the consultancy
appointment shall have no effect on the acquisition of Earth Ltd. for
EFC shares or on the Option granted under clause 7.
11 General Provisions
11.1 The Parties understand that Xxxxxxxx XxxXxxxxx shall continue to be
Chairman of the Board of Infinex and pursue certain projects for
Infinex none of which shall be full time nor when taken together
substantial time.
11.2 Of existing Infinex projects, several concern gaming (one of which has
been generally described and code named "ICB") but none are currently
active nor if they become active would they be directly competitive
with EFC's current activities nor would they be directly competitive
with a foreseeable implementation of the Earth Lottery.
12 Restrictive Agreement
12.1 To assure to EFC the full benefit of the business and goodwill of Earth
Ltd., Xxxxxxxx XxxXxxxxx undertakes by way of consideration for the
obligations of EFC under this Agreement, as separate and independent
agreements, that he will not without the prior written consent of EFC
(such consent to be withheld only in so far as may be reasonably
necessary to protect the legitimate interests of the company) directly
or indirectly:
12.1.1 disclose to another person, or himself use for any purpose,
and shall use all reasonable endeavours to prevent the
publication or disclosure of information concerning the
business, accounts or finances of Earth Ltd. except as
required by law or regulation of a competent authority, such
as Bermuda as concerns the Earth Ltd. Xxx, 0000, or their
client's or customer's transactions or affairs of which he has
knowledge; or
12.1.2 for two years after Completion, either alone or jointly with,
or as manager, agent for or employee of another person,
directly or indirectly carry on or be engaged, concerned or
interested in another lottery business similar to the business
now carried on by EFC or any other lottery business which is
competitive to the business of EFC.
/S/ /S/ /S/ /S/
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13 This Agreement is Subject to Conditions Subsequent
13.1 This Agreement in its entirety may be declared null and void by any of
the Parties if:
13.1.1 by 15 December 1998, or a subsequent date as may be mutually
agreed by the Parties, EFC has failed to raise at least half
of its current Phase 2 funds of at least Two Million Five
Hundred Thousand Pounds Sterling (2,500,000 GBP) either by the
issuance of Ordinary Shares of EFC or by alternative means,
such as debt financing or sponsorships at the entire
discretion of EFC acting reasonably: or
13.1.2 the relevant approval of the Bermuda Monetary Authority to
transfer the shares of Earth Ltd. is not granted within 21
days of its request.
13.2 If this Agreement is declared null and void, the fee payment due to
Infinex on 15 November 1998 and any subsequent monthly payments, if
any, prior to the funding condition having been met in circumstances
only where the date of 15 December 1998 as referred to in clause 13.1.1
is extended by mutual agreement shall be nevertheless paid and not
reimbursed.
14 Miscellaneous
14.1 This Agreement shall be interpreted under the Laws of England. The
Parties shall submit to the exclusive jurisdiction of the English
courts in case of a dispute not first resolvable by private commercial
arbitration in London.
14.2 The transfer of Earth Ltd. shares referred to at clause 6 above is
subject to approval of the Bermuda Monetary Authority which in the case
of a public company transferee should be approved without delay.
14.3 This Agreement represents the whole agreement between the Parties, and
shall not be removed, or varied in any way. No other express terms,
written or oral shall be incorporated in the contract.
IN WITNESS whereof the Parties have this day of 1998 executed this
Agreement
/S/ /S/ /S/ /S/
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ELECTRONIC FUNDRAISlNG COMPANY plc
/S/ Xxxx X. Xxxxxx /S/ Xxxxx X. X. Xxxxxxxx
--------------------------- ----------------------------
E. Xxxx X. Xxxxxx, Director Xxxxx X X Xxxxxxxx, Director
INFINEX INTERNATIONAL LTD
/S/ Xxxxxxxx X. XxxXxxxxx /S/ Xxxxxxx X. Xxxxxxx
------------------------------- ----------------------------
Xxxxxxxx X. XxxXxxxxx, Director Xxxxxxx X. Xxxxxxx, Director
Acknowledged:
/S/ Xxxxxxxx X. XxxXxxxxx
---------------------------------
Xxxxxxxx X. XxxXxxxxx, Personally
8
[ElectroFunco
Logo Here]
0 XX XXXX XXXXXX XXXXX
XXXXXX, X0 0XX
XXXXXX XXXXXXX
TELEPHONE: x00 000 000 0000
FACSIMILE: x00 000 000 0000
XXXX@XXXXXX.XXX
11 January 1999
Variation to the agreement of 3 November 1998 between Infinex International Ltd
(Infinex) and Electronic Fundraising Company plc (EFC).
1.0 In view of the fact that the minimum subscription in terms of the
previous variation of 13 November 1998 was not achieved by 25 December
1998, the parties have agreed that the terms of the agreement of 3
November should be varied as follows:
Clause 6 The purchase price of Five Hundred and Fifty Thousand (550000)
fully paid up Ordinary Shares of EFC is reduced to One Hundred
and Fifty Thousand (150,000) fully paid up Ordinary Shares.
Clause 7.1 The grant of options is increased by Four Hundred Thousand
(400,000) Ordinary Shares at an exercise price of Two Pounds
(2.00 GBP) per share, which is in addition to the option on
Two Hundred Thousand (200,000) Ordinary Shares at an exercise
price of Two Pounds 50 Xxxxx (2.50 GBP) per share.
2.0 It is further agreed that Xx Xxxxxxxx NewDelman will continue to
approach potential investors in terms of the current EFO Offer for
Subscription of 20 November 1998.
2.1 If investors introduced by Infinex invest at least (pound)2 million
under the current terms of the Offer for Subscription, the Four Hundred
Thousand Two Pound (2.00 GBP) options in terms of clause 7.1 shall be
automatically converted, without payment to EFC, into fully paid up
Ordinary Shares in the name of Infinex. Corporate sponsorships
introduced by Infinex during the period of the offer shall be treated
similarly, except that (pound)1 of corporate sponsorship shall be
regarded as having (pound)2 value for the purpose of this clause.
2.2 To the extent that investors introduced by Xx XxxXxxxxx invest less
than (pound)2 million, the number of options converted to shares in
terms of clause 2.1 above shall be reduced pro rata (for example, if
(pound)1 million is invested, or (pound)1/2 million of corporate
sponsorship is made, 200,000 options will be converted to fully paid up
shares).
On behalf of On behalf of
Infinex International Ltd Electronic Fundraising Company plc
/S/ /S/
2 November 1998
Dear Sirs
Side letter - to the Agreement between Infinex International Limited/Electronic
Fund raising Company plc/Xxxxxxxx XxxXxxxxx
1 Introduction
1.1 This letter is the Side Letter to the Agreement entered into between
Infinex International Limited, Electronic Fundraising Company plc and
Xxxxxxxx XxxXxxxxx entered into today.
2 Undertaking by Infinity
2.1 Infinity has given undertakings to the effect that it cannot sell any
of its shares in Electronic Fundraising Company plc before 31 July
1998.
2.2 Notwithstanding 2.1, if any of the Family Trusts controlled by either
of us sell any shares that they hold in Electronic Fundraising Company
plc, Infinex International Limited will be released from the obligation
contained in clause 7.5 to the Agreement in respect of shares which it
owns in Electronic Fundraising Company plc to the same extent pro rata
to the number of shares sold by such Family trusts as a percentage of
the whole of the issued share capital of Electronic Fundraising Company
plc.
3 Service Agreements
3.1 We agree to the insertion into our respective service agreements with
Electronic Fundraising Company plc from time to time provisions which
mirror exactly those constraints imposed on Xxxxxxxx XxxXxxxxx in
clause 10 of the Agreement.
3.2 We agree to the insertion into our respective service agreements with
Electronic Fundraising Company plc from time to time provisions in
respect of levels of compensation which mirror exactly those imposed on
Xxxxxxxx XxxXxxxxx in clause 8.1 of the Agreement.
/S/ /S/
To Infinex International Ltd
Date 2 November 1998
Page 2
Yours faithfully
/S/ Xxxx X. Xxxxxx /S/ Xxxxx X. X. Xxxxxxxx
---------------------------------- -----------------------------------
E Xxxx X Xxxxxx, Director, Xxxxx X X Xxxxxxxx, Director
Electronic Fundraising Company plc Electronic Fundraising Company plc
[ElectroFunco
Logo Here]
0 XX XXXX XXXXXX XXXXX
XXXXXX, X0 0XX
XXXXXX XXXXXXX
TELEPHONE: x00 000 000 0000
FACSIMILE: x00 000 000 0000
XXXX@XXXXXX.XXX
11 January 1999
Variation to the agreement of 3 November 1998 between Infinex International Ltd
(Infinex) and Electronic Fundraising Company plc (EFC).
1.0 In view of the fact that the minimum subscription in terms of the
previous variation of 13 November 1998 was not achieved by 25 December
1998, the parties have agreed that the terms of the agreement of 3
November should be varied as follows:
Clause 6 The purchase price of Five Hundred and Fifty
Thousand (550,000) fully paid up Ordinary
Shares of EFC is reduced to One Hundred and
Fifty Thousand (150,000) fully paid up
Ordinary Shares.
Clause 7.1 The grant of options is increased by Four
Hundred Thousand (400,000) Ordinary Shares at
an exercise price of Two Pounds (2.00 GBP) per
share, which is in addition to the option on
Two Hundred Thousand (200,000) Ordinary Shares
at an exercise price of Two Pounds 50 Xxxxx
(2.50 GBP) per share.
2.0 It is further agreed that Xx Xxxxxxxx NewDelman will continue to
approach potential investors in terms of the current EFC Offer for
Subscription of 20 November 1998.
2.1 If investors introduced by Infinex invest at least (pound)2 million
under the current terms of the Offer for Subscription, the Four Hundred
Thousand Two Pound (2.00 GBP) options in terms of clause 7.1 shall be
automatically converted, without payment to EFO, into fully paid up
Ordinary Shares in the name of Infinex. Corporate sponsorships
introduced by Infinex during the period of the offer shall be treated
similarly, except that (pound)1 of corporate sponsorship shall be
regarded as having (pound)2 value for the purpose of this clause.
2.2 To the extent that investors introduced by Xx XxxXxxxxx invest less
than (pound)2 million, the number of options converted to shares in
terms of clause 2.1 above shall be reduced pro rata (for example, if
(pound)1 million is invested, or (pound)1/2 million of corporate
sponsorship is made, 200,000 options will be converted to fully paid up
shares).
On behalf of On behalf of
Infinex International Limited Electronic Fundraising Company plc
/S/ /S/
