DATED 18TH AUGUST 2000
(1) INTER LOTTO (UK) LIMITED
(2) GTL MANAGEMENT LIMITED
(3) GLOBAL TECHNOLOGIES LIMITED
(4) GLOBALTECH HOLDINGS LIMITED
(5) THE RIGHT HONOURABLE THE LORD MANCROFT
(6) ROY FISHER
(7) DOUGLAS SMTH
DEED
RELATING TO THE TERMINATION OF THE OPERATING AGREEMENTS DATED 29TH APRIL 1999
AND 13TH JANUARY 2000
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CONTENTS
CLAUSE
1. GLOBAL PAYMENT TO INTER LOTTO........................................... 3
2. EXTERNAL LOTTERY MANAGER'S CERTIFICATE.................................. 4
3. WAIVER OF CLAIMS - GLOBAL HOLDINGS & GTL................................ 6
4. WAIVER OF CLAIMS - INTER LOTTO.......................................... 6
5. INDEMNITIES............................................................. 7
6. TERMINATION OF OPERATING AGREEMENTS..................................... 7
7. COMMUNICATIONS WITH THE GAMING BOARD.................................... 8
8. MANCROFT, FISHER AND SMITH.............................................. 8
9. SALARIES AND RESIGNATIONS............................................... 11
10. COMPETITION............................................................. 12
11. GENERAL................................................................. 12
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THIS DEED is made the 18th day of August 2000.
BETWEEN:
1. INTER LOTTO (UK) LIMITED a Company incorporated in England and Wales with
registration number 3036866 whose registered office is situated at Oakley
Building, Broad Lane, Bracknell, Berkshire RG129GU ("Inter Lotto")
2. GTL MANAGEMENT LIMITED a Company incorporated in England and Wales with
registration number 3721405 whose registered office is situated at Oakley
Building, Broad Lane, Bracknell, Berkshire RG129GU ("GTL")
3. GLOBAL TECHNOLOGIES LIMITED a Company incorporated in the United States
under the laws of Delaware with headquarters at The Belgravia, 1811
Chestnut Street, Suite 120, Philadelphia PA 19103 (IRS ID No. 86-0970492)
("Global")
4. GLOBALTECH HOLDINGS LIMITED a Company incorporated in England and Wales
with registration number 3721699 whose registered office situated at Oakley
Building, Broad Lane, Bracknell, Berkshire RG129GU ("Holdings")
5. THE RIGHT HONOURABLE THE LORD MANCROFT of the School House, Badminton,
Gloucestershire GL9 1EJ ("Mancroft")
6. ROY FISHER of 502 Drake House, Dolphin Square, London, SW1V 3NW ("Fisher")
7. DOUGLAS SMITH of The Buckstone House, Stauton, Coleford, Gloucestershire
GL16 8PD ("Smith")
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RECITALS
A Inter Lotto manages Lotteries in the United Kingdom pursuant to an External
Lottery Manager's Certificate issued by the Gaming Board;
B Inter Lotto entered into Operating Agreements with GTL dated 29th April 1999
("the Initial Operating Agreement") and 13th January 2000 ("the Further
Operating Agreement") (collectively "the Operating Agreements") whereby GTL
agreed to provide the services described in the Operating Agreements to Inter
Lotto;
C Inter Lotto entered into separate Service Agreements with each of Mancroft,
Fisher and Smith dated 29th April 1999;
D The Parties have agreed to enter into this Deed in order to compromise the
claims which each party has against the other, to record the termination of the
Operating Agreements and the terms upon which the termination shall take place.
IT IS AGREED as follows:
1. GLOBAL PAYMENT TO INTER LOTTO
1.1 Inter Lotto shall pay to GTL the sum of(pound)751,064.87 (being the
balance remaining from the Value Added Tax rebate plus interest
accrued currently held by Inter Lotto and which Inter Lotto hereby
acknowledges and agrees it holds for GTL after retention by Inter
Lotto of the sum of(pound)220,000) upon the signing of this Deed by
cleared funds, subject to 1.2 below. Such payment shall be made by
CHAPS payment to the account of GTL at Barclays Bank Plc, London
Corporate Banking, PO Box 544, 1st Floor, 54 Lombard Street, London
EC3V 9EX sort code 20 67 59, account number 30373621.
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1.2 Mancroft shall ensure that the winding up petition presented to the
court on 11th August 2000 under action number 4997 of 2000 shall be
withdrawn on 18th August 2000. Inter Lotto, Mancroft, Smith and
Fisher shall ensure that (1) immediate notice is given to Inter
Lotto's bank, Barclays Bank Plc of 54 Lombard Street, London EC3V
9EX of the withdrawal of the winding up petition and (2) all steps
are taken to ensure that the (pound) 751,064.87 referred to in
paragraph 1.1 above is credited to the account of GTL aforesaid by
close of banking business on 18th August 2000.
2. EXTERNAL LOTTERY MANAGER'S CERTIFICATE ("ELMC")
2.1 Inter Lotto and GTL shall do all that is reasonably necessary to
manage lotteries operated by GTL under Inter Lotto's ELMC until
close of business on 31st December 2000 or when GTL cease to operate
the Games if sooner (collectively "the Games" or, individually, a
"Game"). Inter Lotto and each of Mancroft, Fisher and Smith shall,
subject to compulsion of law and regulatory requirements of the
Gaming Board: (i) take all reasonable steps to ensure that the ELMC
remains in full force and effect until 31st December 2000 or the
date on which GTL cease to operate the Games if sooner and (ii)
shall not make any act or omission which would or may jeopardise the
continuance of the ELMC or cause any conditions attached thereto to
be changed or varied in any material respect.
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2.2 For as long as Inter Lotto continues to manage and report to the
Gaming Board on the Games Global shall promptly reimburse and pay to
Inter Lotto all Gaming Board filing fees and all other reasonable
proper expenses relating to such management and reporting including,
without prejudice to the generality of the foregoing, postage,
courier charges and bank charges which relate solely to the
operation of the Games incurred before or during this Agreement upon
receipt of appropriate receipts, statements or invoices evidencing
these expenses. Expenses shall however specifically exclude any and
all travelling, entertainment and mobile telephone expenses save
that in relation to travel expenses the reasonable cost of
travelling between the Dover Street premises and the Bracknell
premises on Inter Lotto/Global business shall be met by Global
subject to presentation of relevant receipts.
2.3 All monies received from the sale of lottery tickets in relation to
the Games ("the Revenue") shall be paid into the Inter Lotto Society
Suspense Account at Barclays Bank account no. 00444642 ("the Society
Suspense Account").
2.4 GTL shall prepare Inter Lotto statements showing the Revenue to be
received into the Society Suspense Account and disbursements from
that account and shall submit the same to Inter Lotto at such
intervals and in such a media as the Parties may determine, and with
hard copy at such times and for such period as the Parties deem
appropriate. The format of the statements shall be in accordance
with current practise.
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2.5 20% of the Revenue shall be paid to GTL after payment of 50% thereof
to the Prize Fund Trust Account, 20% to the Society Trust Account
and 10% to Lottery Sales Company Limited ("LSC") (which includes 6%
already paid to retailers).
2.6 The 20% payable to GTL as referred to above and the 10% payable to
LSC shall be paid by Inter Lotto to GTL and LSC respectively by way
of CHAPS payment on the same day as the Revenue is received into the
Society Suspense Account or no later than 24 hours thereafter. LSC
undertakes to repay to Inter Lotto the total value of all direct
debit monies credited initially to the Society Suspense Account that
are subsequently dishonoured.
3. WAIVER OF CLAIMS - GLOBAL AND GTL
Save as expressly provided otherwise in this Agreement, Global, GTL and
Holdings (for itself and as trustee for the benefit of every other member
of its group from time to time), their associates and subsidiaries and all
directors, officers, employees and agents thereof hereby waive and provide
an indemnity in respect of all claims whether actual or contingent which
they may have against Inter Lotto its associates and subsidiaries and all
directors, officers and employees thereof of whatever nature and howsoever
arising which exist at the date of this Deed.
4. WAIVER OF CLAIMS - INTER LOTTO
Save as expressly provided otherwise in this Deed, Inter Lotto (for itself
and as trustee for the benefit of every member of its group from time to
time) associates and subsidiaries and all directors, officers, employees
and agents thereof hereby waive and provide an indemnity in respect of all
claims whether actual or contingent which they may have against Global,
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GTL, Holdings, their associates and subsidiaries and all directors,
officers and employees thereof of whatever nature and howsoever arising
which exist at the date of this Agreement.
5. INDEMNITIES
5.1 Each of Inter Lotto, Mancroft, Fisher and Smith and GTL, Global and
Holdings hereby irrevocably and unconditionally -
(a) release and discharge the other from all liabilities and
obligations (present or future) under or pursuant to the Operating
Agreements and from all actions, claims, proceedings, demands, costs
and expenses in respect thereof;
(b) undertakes to the other not to raise, pursue or make any claim
under the Operating Agreements against the other; and
(c) waives any claim which it has or may at any time have against
the other arising out of or in connection with the Operating
Agreements.
6. TERMINATION OF OPERATING AGREEMENTS
6.1 The Operating Agreements are hereby terminated.
6.2 Each of Global, GTL and Holdings, their associates or subsidiaries
warrants and provides an indemnity to Inter Lotto as a condition of
this Deed being executed that no liabilities of Inter Lotto have
been created by them as a consequence of their dealings with persons
other than the parties to this Deed including, without prejudice to
the generality of the foregoing, any bank instruments.
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6.3 Each of Mancroft, Fisher and Smith, and Inter Lotto and its
associates or subsidiaries warrants and provides an indemnity to
GTL, Global, Holdings and its associates or subsidiaries as a
condition of this Deed being executed that no liabilities of GTL,
Global, Holdings and its associates or subsidiaries have been
created by them as a consequence of their dealings with persons
other than the parties to this Deed including, without prejudice to
the generality of the foregoing, any bank instruments.
7. COMMUNICATIONS WITH THE GAMING BOARD
Global and Inter Lotto (and their respective directors, officers,
employees and agents) will each provide the other promptly with minutes of
any discussion (in any form or context) with the Gaming Board concerning
the Games and which has taken place in the absence of the other party,
together with copies of any correspondence or other documentation sent to
or received from the Gaming Board in relation to the said Games.
8. MANCROFT, FISHER AND SMITH
8.1 Holdings shall transfer all shares held or to which it may be
entitled in Inter Lotto to each of Mancroft, Fisher and Smith in the
proportions set out in Schedule 1 (or as directed) for (pound)1. A
date will be inserted into the stock transfer forms upon vacation by
Inter Lotto of the Dover Street premises. Global, Inter Lotto,
Mancroft, Smith and Fisher will use their reasonable endeavours to
obtain any consents, agreements, certificates or other documents
that may be required to implement and give effect to this transfer.
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8.2 Holdings undertakes to deliver to Mancroft, Fisher and Smith or as
they may direct upon Completion of this Deed duly executed stock
transfer forms in relation to the transfer at Clause 8.1 together
with the original share certificates as soon as reasonably
practicable thereafter and not later than Tuesday 22nd August 2000.
8.3 Each of the parties to this Agreement agrees that they shall not
make any adverse or prejudicial comments either verbally or in
writing, and either directly or indirectly by any means whatsoever
about any other party to this Agreement, their associates or
subsidiaries or any directors, officers, employees, agents or
subcontractors thereof to the Gaming Board or any of their
employees, representatives, directors and members thereof from time
to time or to any third parties save only to the extent demanded by
compulsion of law or to comply with regulatory requirements of the
Gaming Board.
8.4 Global, GTL and Holdings their associates and subsidiaries hereby
agree to assign all right title and benefit to all such debts as may
be owed or claimed to be owing to them by Inter Lotto at the time of
this Deed to Mancroft, Fisher, Smith for the sum of (pound)1 which
sum is payable upon signing this Deed.
8.5 Inter Lotto agrees and accepts GTL credit notes IL001CN, IL002CN,
IL003CN and IL004CN totalling (pound)1,490,318.31 plus VAT and will
accept a further final credit note for (pound)103,201.20 invoiced
for June 2000 plus VAT.
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8.6 Mancroft, Fisher and Smith undertake that they will properly and
effectively manage the affairs of Inter Lotto.
8.7 In the event that (1) Inter Lotto shall be placed into any form of
insolvency proceeding be that liquidation (whether voluntary or
compulsory) receivership, administrative receivership, voluntary
receivership, administration, company voluntary arrangement or
arrangement with creditors before 1st January 2001 or the date, if
earlier, on which GTL cease to operate the Games or (2) the Gaming
Board does not permit the ELMC to be used in the manner outlined in
this Deed through action taken by Inter Lotto, Mancroft, Fisher
and/or Smith, Global, GTL, Holdings (as trustees for the benefit of
every other member of its group from time to time) or any of their
associates and subsidiaries, shall be entitled to call for the
immediate reassignment of all rights, title and benefit of the debts
assigned under clause 7.3 of this Deed for the sum of(pound)1.
8.8 The parties hereby agree that each of Mancroft, Fisher and Smith
shall be:
(i) permitted to retain three 64MB personal computers which are
currently used at Inter Lotto's Dover Street premises together with
a printer common to all personal computers and all necessary
cabling.
(ii) be given access to or provided with copies of all relevant
documentation, data or information strictly necessary for the
purpose of managing and reporting to the Gaming Board on the Games.
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8.9 The parties hereby agree that each of Mancroft, Fisher and Smith
shall be permitted to remain at Inter Lotto's Dover Street premises
until 30th September 2000 at which time they and any other
employees, directors or representatives of Inter Lotto will vacate
the premises. Prior to vacation of the premises GTL confirms that it
will have responsibility for and pay all rent, rates, service
charges, dilapidations (excluding wilful damage) and other ordinary
and reasonable costs relating to the said premises but excluding,
for the avoidance of doubt, those costs and other office overheads
which have routinely been invoiced by Inter Lotto to GTL prior to
this Agreement and for which Global is now responsible under Clause
2.2 of this Agreement.
9. SALARIES AND RESIGNATIONS
9.1 GTL shall be responsible for paying the salaries of Tim Sargeant and
Celia Treacy prior to and from the date of this Agreement until 31st
August 2000.
9.2 GTL shall be responsible for the payment of the following sums net
to PAYE and NIC (to be paid by GTL) to each of Mancroft
((pound)3,738.45), Fisher ((pound)3,742.05) and Smith
((pound)3,792.05) representing their salaries to the signing of this
Agreement to be paid as part of the August payroll in the usual
manner.
9.3 Holdings shall procure upon this Agreement being signed that:
(i) Messrs Gross, Fox, Condy and Steat shall have resigned as
directors of Inter Lotto by executing notice in the form attached to
this Deed at Schedule 2 and will obtain or provide all necessary
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consents, agreements or other documentation necessary to give full
legal effect to the above matters.
(ii) That Messrs Gross and Fox are fully authorised to executed such
powers of attorney as may be necessary or appropriate to facilitate
execution of stock transfer forms to give effect to the transfer at
clause 8.1 above.
10. COMPETITION
10.1 In consideration of the share transfer at clause 8.1 each of Inter
Lotto, Mancroft, Fisher and Smith undertakes with GTL, Holdings and
Global (for itself and as trustee for the benefit of every other
member of its group from time to time) that it will comply with the
provisions of Schedule 3.
10.2 GTL, Holdings and Global and each of Inter Lotto, Mancroft, Fisher
and Smith acknowledge and agree that the restrictions contained in
Schedule 3 (each of which shall be construed as a separate
undertaking) are fair and reasonable in all the circumstances.
11. GENERAL
11.1 Each party shall pay its own costs and expenses in connection with
and incidental to this Agreement.
11.2 Except as required by law or the requirements of any securities
exchange or regulatory or governmental body (including the Gaming
Board for Great Britain) each party shall keep the terms of this
Deed confidential.
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11.3 This Agreement together with any documents referred to in it
constitutes to the fullest extent permitted by law the whole
agreement of the parties in relation to its subject matter and
supersedes any previous agreement, representation, statement,
warranty or arrangement (whether in writing or oral) between any of
them in relation to that matter. Each of the parties agrees and
acknowledges that in entering into this Agreement it has not relied
on any agreement, representation, statement or warranty not set out
in this Agreement (or the other documents referred to herein) and
that, in the absence of fraud, it will not have any right or remedy
arising out of any of such agreement, representation, statement or
warranty.
11.4 No modification or variation of this Agreement shall be effective
unless it is made in writing and signed by or on behalf of each of
the parties hereto.
11.5 The exercise, or partial exercise, of or any delay or omission in
exercising any right conferred by this Agreement or any party shall
not constitute a waiver of that or any other right or remedy
available to that party and the rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
11.6 If any provision of this Agreement is held by a competent authority
to be invalid or unenforceable in whole or in part, this Agreement
shall continue to be valid as to its other provisions and the
remainder of the affected provision. If, at any time any provision
of this Agreement is or becomes invalid, illegal or unenforceable in
any respect under any law but would be or become valid, illegal or
enforceable if some part of the provision were deleted or amended,
the provision in question shall remain in force with such deletion
or with such amendment as may be necessary to make the provision
valid, legal and enforceable.
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11.7 This Agreement may be executed in more than one counterpart and
shall come into force once each party has executed such a
counterpart in identical form and exchanged it with the other
parties.
11.8 This Agreement is personal to the parties and none of the parties
may assign, mortgage, charge or seek to deal or purport to deal in
any way with any of its rights or obligations under this Agreement.
11.9 This Agreement shall be binding on and shall ensure for the benefit
of the respective successors in title of each party to this
Agreement.
11.10 The rights of any party hereto shall not be prejudiced or restricted
by any indulgence or forbearance extended to any other party.
11.11 A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of
this Agreement but this does not affect any right or remedy of a
third party which exists or is available apart from that Act.
11.12 The obligations of GTL, Global and Holdings hereunder shall be joint
and several.
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11.13 The obligations of Inter Lotto, Mancroft, Fisher and Smith hereunder
shall be joint and several.
11.14 The provisions of this Agreement insofar as they have not been
performed at or are capable of taking effect after completion shall
remain in full force and effect notwithstanding completion and shall
not merge on completion.
11.15 The headings to the clauses of this Agreement are for convenience of
reference only and shall not affect its meaning or construction.
11.16 This Agreement shall be interpreted and operated in accordance with
the Law of England and the parties to this Agreement submit
themselves to the non-exclusive jurisdiction of the English Courts.
11.17 This Agreement supersedes any previous arrangement between the
parties in relation to the matters dealt with in and represents the
entire understanding between the parties in relation to them.
11.18 Any notice given under or pursuant to this Agreement shall be
effectively served on each of the parties if given to each of the
parties or to the solicitor acting for the relevant party at
completion.
11.19 Any such notice will be deemed well served on the person to whom it
is addressed if it is served personally or sent by first class
recorded delivery post addressed to such person at his or its usual
or last known address in England and in the case of service of any
notice on any person by recorded delivery first class post the date
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of service of that notice on that person shall be the day following
the date of posting (unless such following day be a Saturday or
Sunday or public holiday) when service shall be deemed to be
effected on the first day after the date of posting which is not a
Saturday, Sunday or public holiday).
11.20 Each of Global, GTL, Holdings and Inter Lotto undertakes to procure
and provides an indemnity that the terms of this Deed will be
honoured by their associates, and subsidiaries and all directors,
officers, employees and agents thereof.
11.21 In this Deed references to "group companies" shall have meaning
given by the Companies Act 1989 and "associates" or "subsidiaries"
shall have the meaning given in Section 736 of the Companies Act
1985.
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IN WITNESS of which the parties have executed and delivered this document as a
Deed the year and date stated above:
Signed by Globaltech Holdings )
Limited by two directors or a )
director and secretary )
and witnessed by )
SIGNED by Inter Lotto (UK) )
Limited by two directors or a )
director and secretary and witnessed )
by )
SIGNED by GTL Management )
Limited by two directors or a )
director and secretary and witnessed )
by )
SIGNED by Global Technologies )
Limited by two directors or a )
director and secretary and witnessed )
by )
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SIGNED by the Right Honourable )
The Lord Mancroft and )
witnessed by )
by )
SIGNED by Roy Fisher )
and witnessed )
by )
SIGNED by Douglas Smith )
and witnessed )
by )
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SCHEDULE 1
"B" Shares Deferred Shares
---------- ---------------
Mancroft 1,264 2,069
Fisher 1,264 2,069
Smith 1,265 2,069
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SCHEDULE 2
To the Directors, Inter Lotto (UK) Limited (`the Company')
In consideration of the agreement to terminate the Operating Agreements made
between (1) Inter Lotto (2) Global Technologies Limited and (3) GTL Management
Limited (4) Globaltech Holdings Limited I hereby resign from the office of
director of the Company and confirm that I have no claim against the Company or
its officers directors employees or agents whether for loss of office or
otherwise.
Dated: August 2000
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SCHEDULE 3
COMPETITION
PART 1 - INTERPRETATION
In this Schedule -
`Restricted Business' means the Daily Number Game or any similar 3
or 4 digit lottery game and
`the Restricted Territory' means the United Kingdom of Great
Britain.
PART 2 - RESTRICTIONS
Inter Lotto, Mancroft, Fisher and Smith will not and in the case of Inter Lotto
will procure that every other member of its group from time to time will not -
within the Restricted Territory and for a period of 2 (two) years
from the date of this Deed within the Restricted Territory directly
or indirectly carry on or be engaged or interested in any way
(whether as a director, shareholder or consultant or by agreement or
otherwise) in any Restricted Business;
for a period of 2 years from the date of this Deed directly or
indirectly (whether in conjunction with or on behalf of some other
person) solicit or entice, or endeavour to solicit or entice, away
from GTL and Global or any other member of its group any of its or
their directors or employees.
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