EXHIBIT 10.11
CONSULTING SERVICES AGREEMENT
THIS AGREEMENT made as of the 1st day of April, 1999
BETWEEN:
WOLF BERGELT, of Newgate Street, P.O. Box 3265, St. John's,
Antigua, West Indies,
(the "CONSULTANT")
AND:
STARNET COMMUNICATIONS INTERNATIONAL INC., a company incorporated
under the laws of the State of Delaware, U.S.A., and having a
registered office at Newgate Street, P.O. Box 3265, St. John's,
Antigua, West Indies.
("STARNET")
WHEREAS:
(A) Unless otherwise defined herein, terms denoted with initial capital
letters have the meanings assigned to them in Part 1;
(B) Starnet is a U.S. public company in the business of offering Internet
gaming services;
(C) the Consultant has extensive financial consulting experience with
public companies; and
(D) Starnet wishes to retain the Consultant upon the terms hereinafter
provided,
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
premises and the respective covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
PART 1
DEFINITIONS AND INTERPRETATION
DEFINITIONS
1.1 In this Agreement and the recitals hereto, unless the context otherwise
requires, the following terms shall have the meanings hereinafter set forth:
"BOARD" means the board of directors of Starnet;
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"BUSINESS DAY" means any day except Saturdays, Sundays or statutory
holidays in Antigua and/or the U.S.;
"CHANGE OF CONTROL" means any acquisition of more than fifty per cent
(50%) of the issued share capital (having full voting rights under all
circumstances) of Starnet by another corporation, business entity or
person, or if the current board of directors is no longer in the
majority;
"COMMENCEMENT DATE" means the commencement date of the Engagement
described in Section 4. 1.
"CONSULTING SERVICES" means the services described in Section 2.2;
"ENGAGEMENT" means the engagement of the Consultant by Starnet
pursuant to Section 2.1 to perform the Consulting Services in
accordance with this Agreement;
"STARNET REPRESENTATIVES" means the Chairman of the Board, and such
other officers of Starnet as the Chairman may designate from time to time;
INTERPRETATION
1.2 For the purposes of this Agreement, except as otherwise expressly provided:
(a) "THIS AGREEMENT" means this Agreement, and not any particular
part, section or other portion hereof, and includes any
agreement, document or instrument entered Into, made or delivered
pursuant to the terms hereof, as the same may, from time to time,
be supplemented or amended and in effect;
(b) all references in this Agreement to a designated "PART",
"SECTION", "SUBSECTION" or other subdivision or to a schedule are
references to the designated part, section, subsection or other
subdivision of, or schedule to, this Agreement;
(c) the words "HEREOF", "HEREIN", "HERETO" AND "HEREUNDER" and other
word of similar import refer to this Agreement as a whole and not
to any particular part, section, subsection or other subdivision
or schedule unless the context or subject matter otherwise requires;
(d) the division of this Agreement into parts, sections and other
portions and the insertion of headings are for convenience of
reference only and are not intended to interpret, define or limit
the scope, extent or intent of this Agreement or any provision hereof;
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(e) unless otherwise provided herein, all references to currency in
this Agreement are to lawful money of the United States of America;
(f) a reference to a statute in this Agreement includes all
regulations made thereunder, all amendments to the statute or
regulations in force from time to time, and any statute or
regulation that supplements or supersedes such statute or regulations;
(g) the singular of any term includes the plural, and vice versa, and
the use of any term is generally applicable to any gender and,
where applicable, a body corporate, firm or other entity, and the
word "or" is not exclusive and the word "including" is not
limiting (whether or not non-limiting language (such as "WITHOUT
LIMITATION" OR "BUT NOT LIMITED TO" or words of similar import)
is used with reference thereto;
(h) in the event that any date on which any action is required to be
taken hereunder by any of the parties hereto is not a Business
Day, such action shall be required to be taken on the next
succeeding day which Is a Business Day;
(i) all references to "APPROVAL", "AUTHORIZATION" or "CONSENT" in
this Agreement means written approval, authorization or consent.
1.3 In the event of any inconsistency between the provisions of this
Agreement and either the stock option agreement entered into by Starnet and
the Consultant or Starnet's 1999 Stock Option Plan (the "PLAN"), the
provisions of this Agreement will govern where not inconsistent with law.
PART 2
ENGAGEMENT AND DUTIES OF CONSULTANT
ENGAGEMENT
2.1 Starnet hereby engages the Consultant to domicile in the Caribbean and
perform the Consulting Services based in the Caribbean and other locations,
excluding Canada for the benefit and on behalf of Starnet and the
Consultant hereby accepts the Engagement on the terms and conditions
hereinafter provided. The Consultant undertakes to maintain his domicile in
the Caribbean during the term of this Agreement.
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CONSULTING SERVICES
2.2 The Consulting Services will include consulting services and advice to
Starnet in the following areas:
(a) international taxation;
(b) international banking and financial arrangements;
(c) Internet gaming industry; and
(d) such other services and advice as determined by the Starnet
Representatives from time to time.
PERFORMANCE
2.3 The Consultant will diligently perform the Consulting Services in the
Caribbean or such other places as Starnet may request on a timely basis and
agrees to devote up to 50 % per cent of his working time to the faithful,
diligent and proper performance of the Consulting Services, all as may be
determined from time to time by the Starnet Representative.
AUTHORITY
2.4 The Consultant understands and agrees that the Consultant has no
authority and is not authorized to enter into any arrangements, commitments
or agreements on behalf of Starnet without the prior consent of the Starnet
Representatives.
CONFIDENTIAL INFORMATION
2.5 The Consultant agrees that any information received by the Consultant
during the Engagement, which concerns the affairs of Starnet shall be
deemed to be confidential information, will be treated by the Consultant in
full confidence and will not be revealed to any other persons or entities,
except as otherwise authorized by the Starnet Representatives or unless
such disclosure is required by law or in compliance with regulatory
obligations. The provisions of this Section 2.5 shall survive the
termination of this Agreement and shall continue in full force and effect
according to its terms for a period of one (1) year thereafter.
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PART 3
REMUNERATION
RETAINER
3.1 In consideration for the Consulting Services, Starnet will retain the
Consultant and pay the Consultant an amount equal to US$8,000 per mouth,
payable monthly in Antigua, unless the Consultant elects to receive payment
elsewhere. The Consultant may elect to have any compensation payable
hereunder made in any jurisdiction of his choice or such jurisdiction which
is mutually agreeable. All amounts payable hereunder will be paid without
deductions for income or withholding taxes of any nature.
EXPENSES
3.2 Starnet will provide the Consultant with a vehicle and will reimburse
the Consultant for all reasonable travel, entertainment and other expenses
incurred or paid by the Consultant in the course of the performance of his
functions and duties under this Agreement, upon presentation by the
Consultant of documentation, expense statements, vouchers and/or such other
supporting information as Starnet may reasonably request.
STOCK OPTIONS
3.3 On the Commencement Date, the Consultant will be entitled to receive
50,000 options to purchase 50,000 common shares of Starnet under the Plan.
Subject to the terms and conditions of the Plan:
(a) 25,000 options will vest on the date of grant and be exercisable
thereafter at a price of US$1.44 for a period of ten years; and
(b) the remaining 25,000 options will vest on January 1, 2000 and be
exercisable thereafter at a price of US$1.44 for a period of ten
years,
3.4 In the second and third year of the Engagement, the Board will grant to
the Consultant additional options on terms and conditions agreed between
Starnet and the Consultant, based upon terms and conditions comparable to
those offered to executive officers of Starnet at the executive vice
president level.
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PART 4
CONSULTING TERM
TERM OF ENGAGEMENT
4.1 The Engagement will commence on the later of April 1, 1999 (the
"COMMENCEMENT DATE") or the date the Consultant is domiciled in the
Caribbean and will expire on the third anniversary of the Commencement
Date, subject to earlier termination as hereinafter provided, and may be
extended annually thereafter by mutual agreement in writing signed by the
parties hereto on such terms as the parties agree.
EARLY TERMINATION
4.2 The Engagement and this Agreement will be deemed to be immediately
terminated:
(a) upon a Change of Control;
(b) upon the death or disability of the Consultant; or
(c) for cause.
For purposes of this Agreement, "CAUSE" means: (i) the Consultant breaches
his obligations hereunder and fails to cure such breach within 30 days of
written notice by Starnet; or (ii) the existence of cause for termination
of the Engagement at common law resulting from any recognized grounds for
termination for cause, including but not limited to, fraud, dishonesty,
illegality, breach of statute or regulation, or gross incompetence.
CHANGE OF CONTROL
4.3 In the event of termination of this Agreement resulting from a Change
of Control, upon the effective date of termination of the Engagement, the
Consultant will be entitled to receive from Starnet, the aggregate retainer
(as set forth in Section 3.1) that would have been payable during the
period from the date of termination to the date of expiry of this Agreement
computed as if a Change of Control had not taken place.
4.4 Where a Change of Control occurs in the first year of the Engagement,
any options granted to the Consultant, if not vested at the time of the
Change of Control, will vest and all vested options will be exercisable
thereafter at their stipulated price for a period of six (6) months
following the Change of Control, and Starnet will grant to the Consultant
100,000 additional options with an exercise price equal to the lowest
exercise price permissible under applicable stock exchange rules, which
will vest on the date of grant and all vested options will be exercisable
thereafter by the Consultant, for a period of 24 months following the
Change of Control.
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4.5 Where a Change of Control occurs in the second year of the Engagement,
any options granted to the Consultant, if not vested at the time of the
Change of Control, will vest and all vested options will be exercisable
thereafter at their stipulated price for a period of six (6) months
following the Change of Control. To the extent that Starnet has not
granted to the Consultant at least 100,000 additional options (or the
equivalent value in other compensations, in lieu of options, based upon the
manner of bonus or other remuneration by Starnet to its other directors,
officers, employees and consultants during such year) in the second year of
the Engagement pursuant to Section 3.4 hereof at the time of the Change of
Control, Starnet will grant to the Consultant up to 100,000 options (such
that the Consultant shall have received an aggregate of at least 100,000
options in the second year of the Engagement) with an exercise price equal
to the lowest exercise price permissible under applicable stock exchange
rules, which will vest on the date of grant and all vested options will be
exercisable thereafter by the Consultant, for a period of 24 months
following the Change of Control.
4.6 Where a Change of Control occurs in the third year of the Engagement,
any options granted to the Consultant, if not vested at the time of the
Change of Control, will vest and all vested options will be exercisable
thereafter at their stipulated price for a period of six (6) months
following the Change of Control. To the extent that Starnet has not granted
to the Consultant at least 50,000 additional options (or the equivalent
value in other compensations, in lieu of options, based upon the manner of
bonus or other remuneration by Starnet to its other directors, officers,
employees and consultants during such year) in the third year of the
Engagement pursuant to Section 3.4 hereof at the time of the Change of
Control, Starnet will grant to the Consultant 50,000 options (such that the
Consultant shall have received an aggregate of at least 50,000 options in
the third year of the Engagement) with an exercise price equal to the
lowest exercise price permissible under applicable stock exchange rules,
which will vest on the date of grant and all vested options will be
exercisable thereafter by the Consultant, for a period of 12 months
following the Change of Control.
DEATH OR DISABILITY OF THE CONSULTANT
4.7 In the event of termination of this Agreement resulting from the death
or disability of the Consultant, any options granted to the Consultant, if
not vested at the time of his death or disability, will vest and all vested
options will be exercisable thereafter by the Consultant or his estate for
a period of 12 months after his death or disability.
SURVIVAL
4.8 The provisions under Section 3.2 and Part 4 hereof shall survive the
termination of this Agreement.
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PART 5
GENERAL
NOTICES
5.1 All notices which may or are required to be given pursuant to any
provision of this Agreement shall be given in writing and shall be
delivered personally or by telecopy, and in the case of the Consultant
addressed to:
Newgate Street
P.O. Box 3265
St. John's
Antigua, West Indies
Telecopier Number: (268) 480-1656
Attention: Wolf Bergelt
and in the case of Starnet addressed to:
Starnet Communications International Inc.
Newgate Street
P.O. Box 3265
St. John's
Antigua, West Indies
Telecopier Number: (268) 480-1656
with a copy to Starnet's Delaware office
or such other address or telecopier number of which a party may, from time
to time, advise the other parties hereto by notice in writing given in
accordance with the foregoing. Date of receipt of any such notice shall be
deemed to be the date of delivery thereof, if delivered, and on the day of
telecopying, if telecopied, in each such case provided such day is a
Business Day and, if not, on the first Business Day thereafter.
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BINDING EFFECT
5.2 This Agreement shall be binding upon and shall enure to the benefit of
the parties hereto and their respective successors and permitted assigns.
WAIVER
5. 3 Any waiver or release of any of the provisions of this Agreement, to
be effective, must be in writing executed by the party granting the same.
TIME OF ESSENCE
5.4 Time is of the essence of this Agreement.
ASSIGNMENT
5.5 Neither of the parties may assign its rights or obligations under this
Agreement without the prior written consent of the other, such consent not
to be unreasonably withheld.
FURTHER ASSURANCES
5.6 Each of the parties, upon the request of any other party, shall do,
execute, acknowledge and deliver or cause to be done, executed,
acknowledged or delivered all such further acts, deeds, documents and
assurances as may be reasonably necessary or desirable to effect complete
consummation of the transactions contemplated by this Agreement.
COUNTERPARTS
5.7 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
ENTIRE AGREEMENT
5.8 This Agreement, together with the agreements herein referred to,
constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, between the parties
with respect to the subject matter hereof.
GOVERNING LAW
5.9 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, U.S.A.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
// Witness' Signature // // Consultant's Signature //
______________________________ _____________________________________
WITNESS WOLF BERGELT
STARNET COMMUNICATIONS
INTERNATIONAL INC.
// Authorized Signature //
Per: _______________________________
AUTHORIZED SIGNATORY