Exhibit 4.9
GENERAL SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of the First day of August, 2002.
BETWEEN:
STARNET SYSTEMS INTERNATIONAL INC., a company incorporated under
the laws of Antigua and Barbuda and having an address at The
CIBC Banking Centre, Old Parham Road, St John's, Antigua, West
Indies (the "Chargor")
AND:
SPORTINGBET plc and Internet Opportunity Entertainment Limited
whose registered office is at, of, care of, 6th Floor,
Transworld House, 82-100 City Road, London EC1Y 2BJ (the
"Secured Party")
ARTICLE 1
DEFINITIONS
1.1 Unless otherwise specifically defined in this General Security
Agreement (the "Security Agreement"), capitalized terms have the
meaning assigned to them under the agreement entered into between the
Secured Party and World Gaming PLC and the Chargor and others on July
2002 (the "Principal Agreement").
ARTICLE 2
SECURITY INTEREST
2.1 As general and continuing security for the due, prompt and complete
payment, performance and satisfaction of the Obligations, as defined in
Article 4 hereof, the Chargor hereby grants to the Secured Party a
security interest in all of the Hardware called the "Collateral" ).
ARTICLE 3
OBLIGATIONS SECURED
3.1 This Security Agreement and the security interests hereby created shall
be general and continuing security for the due, prompt and complete
performance and payment of all obligations, indebtedness and liability
of World Gaming PLC and the Chargor to the Secured Party under the
Principal Agreement (the "Obligations").
ARTICLE 4
PROHIBITIONS
4.1 The Chargor shall not create or incur or suffer to be created or
incurred any mortgage, pledge, hypothecation, lien, charge, encumbrance,
assignment or other security interest of any kind whatsoever upon the
Collateral or any part thereof ranking or purporting to rank in priority
or pari passu to this Security Agreement and the charges and security
interests created and secured hereby without the prior consent of
Secured Party except:
(a) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by
appropriate proceedings, and as to which the Chargor shall have
set aside on its books reserves;
(b) deposits under worker's compensation, unemployment insurance and
social security laws, or to secure the performance of bids,
tenders, contracts (other than for the repayment of borrowed
money) or leases, or to secure statutory obligations or surety
or appeal bonds, or to secure indemnity, performance or other
similar bonds in the ordinary course of business; and
(c) liens imposed by law, such as carriers', warehousemen's or
mechanics' liens, incurred by the Chargor in good faith in the
ordinary course of business, and liens arising out of a judgment
or award against them with respect to which the Chargor shall
currently be prosecuting an appeal, a stay of execution pending
such appeal having been secured.
4.2 The Chargor shall not sell, assign, transfer, lease or otherwise dispose
of the Collateral or any part thereof otherwise than in the ordinary
course of business without the prior written consent of the Secured
Party.
ARTICLE 5
ATTACHMENT
5.1 The Chargor acknowledges that the security interests hereby created
attach upon the execution of this Security Agreement (or in the case of
any after acquired property, upon the date of acquisition thereof), that
value has been given, and that the Chargor has, or in the case of after
acquired property will have, rights in the Collateral.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 The Chargor represents and warrants that this Security Agreement is
granted in accordance with resolutions of the directors of the Chargor
and all other matters and things have been done and performed so as to
authorize and make the execution and delivery of this Security
Agreement, and the performance of the Chargor's obligations hereunder,
legal, valid and binding.
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6.2 The Chargor represents and warrants that the Chargor, directly or
indirectly, lawfully owns, and possesses all presently held Collateral
and has good title thereto, free from all security interests, charges,
encumbrances, liens and claims and the Chargor has good right and lawful
authority to grant a security interest in the Collateral as provided by
this Security Agreement.
ARTICLE 7
COVENANTS OF THE CHARGOR
7.1 The Chargor covenants with the Secured Party while this Security
Agreement remains in effect that:
(a) the Chargor will perform and observe all of the obligations,
covenants and conditions to be performed and observed by it as
provided in this Security Agreement;
(b) the Chargor shall keep the Collateral insured against loss or
damage and provide the Secured Party with evidence of such
insurance upon written request;
(c) the Chargor will carry on business in the manner previously
carried on, will keep or cause to be kept proper books of
account in relation to its business and make therein true and
faithful entries of all dealings and transactions in relation to
the Collateral and, subject to the other provisions of this
Security Agreement, will do or cause to be done all things
necessary to preserve and keep in full force and effect the
corporate existence of the Chargor;
(d) the Chargor shall pay all taxes, rates, government fees and dues
levied, assessed or imposed upon the Collateral or any part
thereof, as and when the same become due and payable, save and
except when and so long as the validity of any such taxes,
rates, fees, dues, levies or assessments is in good faith
contested by the Chargor; and
(e) the Chargor shall notify the Secured Party forthwith upon the
occurrence, or the possibility of an occurrence, of any of the
Trigger Events (as defined in Clause 4.2.1 of the Principal
Agreement);
7.2 The Chargor covenants and agrees that, while this Security Agreement is
in effect, it will not, without the prior written consent of the Secured
Party, directly or indirectly dissolve, liquidate, merge, consolidate or
otherwise alter or modify its structure.
7.3 The Chargor covenants and agrees that it will promptly effect all
registrations, filings and recordings in all offices in all
jurisdictions and at such times as may be necessary in protecting the
validity, effectiveness and priority of this Security Agreement and the
security interest created hereunder;
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7.4 The Chargor covenants and agrees that it shall (at the Secured Party's
expense) execute and deliver to the Secured Party such further
assurances and documents as the Secured Party may require to register,
file or otherwise perfect the Secured Party's security on all or any
part of the Collateral.
ARTICLE 8
PERFORMANCE OF OBLIGATIONS
8.1 If the Chargor fails to perform any of its obligations under this
Security Agreement, the Secured Party may, but shall not be obliged to,
perform any or all of such obligations without prejudice to any other
rights and remedies of the Secured Party hereunder, and any payments
made and any costs, charges, expenses and legal fees and disbursements
(on a solicitor and his own client basis) incurred in connection
therewith shall be payable by the Chargor to the Secured Party and such
amounts shall be a charge upon and security interests in the Collateral
in favour of the Secured Party prior to all claims subsequent to this
Security Agreement.
ARTICLE 9
ENFORCEMENT
9.1 The Collateral becomes immediately enforceable and the power of sale and
other powers as conferred (expressly or by reference) by this Security
Agreement shall be immediately exercisable by the Secured Party at any
time after the occurrence of a trigger event (as described in Clauses
3.4 and 3.5.2 of the Principal Agreement save that with regard to such
material breaches described in clause 3.5.2, the Chargor or any company
within its group shall have a period of 28 days to rectify (during such
period the Collateral will not become enforceable and exercisable by the
Secured Party) after which the Collateral shall become immediately
enforceable and exercisable by the Secured Party if such breaches remain
outstanding).
9.2 At any time after a trigger event (as described in Clause 3.4 and 3.5.2
(subject to the proviso set out in clause 9.1 above) of the Principal
Agreement) has occurred, the Secured Party, in the exercise of its
discretion and in addition to any other rights or remedies permitted by
law or by equity, may exercise one or more of the following rights,
powers and remedies:
(d) subject to any restrictions or requirements imposed by law, take
possession of all or any part of the Collateral with power to
exclude the Chargor and its officers, employees and agents
therefrom;
(e) take all such steps as the Secured Party may consider necessary
or desirable for the purposes of preserving, maintaining and
completing all or any part of the Collateral and making such
replacements thereof and improvements and additions thereto as
the Secured Party shall consider expedient;
(f) subject to any restrictions or requirements imposed by law, sell
or lease or dispose of all or any part of the Collateral in such
manner and on such terms as the Secured Party may deem
reasonable, including, without limitation, terms that provide
time for payment on credit;
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(g) subject to any restrictions or requirements imposed by law,
elect to retain all or any part of the Collateral such that
(subject to any period of time provided by law) the Chargor
shall have no rights to such Collateral thereafter;
(h) enjoy and exercise all rights and remedies of a secured party
under any legislation which is applicable to the realization of
security by the Secured Party against the Collateral;
(i) upon any sale of the Collateral, deliver, assign and transfer to
the purchaser thereof the Collateral so sold;
(j) exercise, to the extent permitted by law, all or any of the
following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due
upon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, in
accordance with the provisions of this Article 10 as
fully and effectually as if the Secured Party were the
absolute owner thereof; and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with
reference thereto.
The Secured Party shall exercise all rights, powers and remedies
provided to it under this Security Agreement or under any applicable law
in good faith and in a commercially reasonable manner.
ARTICLE 10
RIGHTS CUMULATIVE
10.1 All rights and remedies of the Secured Party set out in this Security
Agreement are cumulative and no right or remedy contained herein is
intended to be exclusive but each will be in addition to every other
right or remedy contained herein or in any existing or future security
agreement or now or hereafter existing at law, in equity or by statute,
or pursuant to any other agreement between the Chargor and the Secured
Party that may be in effect from time to time.
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ARTICLE 11
WAIVER
11.1 The Secured Party may, from time to time and at any time waive in whole
or in part any right, benefit or default under any clause of this
Security Agreement but any such waiver of any right, benefit or default
on any occasion shall be deemed not to be a waiver of any such right,
benefit or default thereafter, or of any other right, benefit or
default, as the case may be.
ARTICLE 12
NOTICE
12.1 All notices, consents, approval, requests, demands and other
communications under this Security Agreement shall be in writing and
shall be deemed to have been duly given on the date of delivery if
personally delivered to the party to whom notice is to be given, or on
the second (2nd) business day after mailing if mailed by first class
mail, registered or certified, postage prepaid, or twelve (12) hours
after the time of delivery if sent by facsimile at the address set forth
below.
If to the Secured Party:
Sportingbet Plc
Transworld House
92 - 100 City Road
London EC1Y 2BJ
Attention: Daniel Talisman
Group Legal Counsel and
Company Secretary
Facsimile: 020 7251 7270
If to the Chargor:
As stated in the Principal Agreement
Any party may change its address for purposes of this Article 13 by
giving the other parties written notice of the new address in the manner
set forth above.
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ARTICLE 13
EXTENSIONS
13.1 The Secured Party may grant extensions of time and other indulgences,
take and give up security, accept compositions, compound, compromise,
settle, grant releases and discharges, refrain from perfecting or
maintaining perfection of security interests, and otherwise deal with
the Chargor, account debtors of the Chargor, sureties and others and
with the Collateral and other security interests as the Secured Party
may see fit without prejudice to the liability of the Chargor or the
Secured Party's right to hold and realize on the security constituted by
this Security Agreement.
ARTICLE 14
ASSIGNMENT
14.1 The Secured Party may assign this Security Agreement and the security
interest created hereby to any member of its group but otherwise shall
not be permitted to make any assignment or transfer.
ARTICLE 17
SATISFACTION AND DISCHARGE
17.1 Any partial payment or satisfaction of amounts owing or discharge of
obligations pursuant to the Principal Agreement shall be deemed not to
be a redemption or discharge of this Security Agreement.
17.2 The Chargor shall be entitled to a release and discharge of this
Security Agreement and the security interest created thereby upon the
Principal Agreement ceasing to be of effect, in which event the Secured
Party shall, within ten (10) days of being requested in writing by the
Chargor to do so, make and do all such acts and things and execute and
deliver all such financing statements, instruments, agreements and
documents as the Chargor reasonably considers necessary or desirable to
discharge the security interest created by this Security Agreement, to
release and discharge the Collateral therefrom and to record such
release and discharge in all appropriate offices of public record.
ARTICLE 18
INTERPRETATION
18.1 The invalidity or unenforceability of the whole or any part of any
clause of this Security Agreement shall not affect the validity or
enforceability of any other clause or the remainder of such clause.
18.2 The headings of the clauses of this Security Agreement have been
inserted for reference only and do not define, limit, alter or enlarge
the meaning of any provision of this Security Agreement.
18.3 Wherever the Chargor or the Secured Party is referred to such reference
shall extend to the successors and permitted assigns of the Chargor, or
the Secured Party, as the case may be.
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18.4 This Security Agreement shall be governed by the laws of England and
Wales.
ARTICLE 19
COPY OF AGREEMENT AND FINANCING STATEMENT
19.1 The Chargor hereby acknowledges receiving a copy of this Security
Agreement and waives all rights to receive from the Secured Party a copy
of any financing statement, financing change statement or verification
statement filed at any time in respect of this Security Agreement.
IN WITNESS WHEREOF the parties have executed this Security Agreement as of the o
day of July, 2002.
STARNET SYSTEMS INTERNATIONAL INC.
Per: ________________________
SPORTINGBET PLC
Per: ________________________
INTERNET OPPORTUNITY ENTERTAINMENT
LIMITED
Per: ________________________
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