Document:

Unassociated Document

    
       
Octavian
      International Limited ("Octavian")

    Bury
      House

    1-3
      Bury
      Street

    Guildford

    Surrey
      GU2 4AW

    

    The
      Directors

    eBet
      Limited ("eBet")

    Unit
      13,
      112- 118 Talavera Road

    Macquarie
      Park

    NSW
      2113

    Australia

    

    11
      January 2008

     

    Dear
      Sirs

    

    Loan
      Agreement between eBet and Octavian dated 20 June 2007 (the "Agreement")
      and
      Deed of Charge between eBet and Octavian dated 15 August 2007 (the
      "Charge")

    

    
      	 	
              1.

            	
              With
                reference to the Agreement and the Charge, and in consideration of
                the
                payment of AUS$l by Octavian to eBet and other valuable consideration,
                please sign, date and return the acknowledgement on the copy letter
                by way
                of agreement to the terms of this
                letter.

            

    

    

    
      	
            	2.	
              Terms
                defined in this letter shall have the same meaning as set out in
                the
                Agreement
                and the Charge, unless the context requires
                otherwise.

            

    

    

    
      	 	
              3.

            	
              Octavian
                and eBet acknowledge that Octavian has not complied with clause 4.2
                of the
                Agreement as at 31 December, 2007 and, in
                connection with this breach, there is
                the possibility for there being an Event of Default pursuant to clause
                7.1.1
                of
                the Agreement and clause 7.1(a) of the Charge if notice is given
                to
                Octavian by eBet to that effect,

            

    

    

    
      	 	
              4.

            	
              The
                parties agree that, in addition to the above breach of the Agreement,
                there are other outstanding issues between them (including, without
                limitation, as provided in the draft Deed of Agreement
                emailed by eBet to Octavian on 19 December, 2007) (the "Outstanding
                Issues").
                Each party undertakes to the other to use its reasonable endeavours
                to
                enter into a binding agreement with the other settling the terms
                of the
                Outstanding Issues by no later than 14 January, 2008 (the period
                from 31
                December 2007 to 14 January 2008 being the "Rectification
                Period").
                For the avoidance of doubt, if agreement on the Outstanding Issues
                is not
                made by the expiry of the Rectification Period, either party may
                exercise
                its rights under the Agreement and/or Charge (as amended by this
                letter),
                subject to the waiver of rights set out in paragraph 5 below and
                the
                release in para 6 below.

            

    

    

    
      	 	
              5.

            	
              eBet
                hereby agrees, for the duration of the Rectification Period, to waive
                (i)
                the default referred to in paragraph 3 above and not take steps to
                create
                an Event of Default in connection with that default during
                this period; and (ii) all rights arising from that default pursuant
                to the
                Agreement, Charge or otherwise during this period. Without prejudice
                to
                the generality of
                the foregoing, it is further acknowledged
                and agreed by eBet that during the Rectification
                Period;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

            	
              the
                Facility has not been cancelled;
                and

            

    

     

    
      	
            	(b)	
              the
                Loan and Interest
                accrued thereon are not immediately due and
                payable.

            

    

    

    
      	 	
              6.

            	
              Octavian
                and eBet further acknowledge that pursuant to clause 2.4 of the Charge,
                the
                floating charge has become or could become crystallised and become
                fixed.
                eBet
                hereby agrees that pursuant to clause 2.5 of the Charge and to the
                extent
                the floating charge has become fixed, the Charged Property is released
                from the fixed charge during the Rectification Period and the
                acknowledgement on the copy letter constitutes notice in writing
                by eBet
                of this release as required by clause 2.5(a) of the
                Charge. Octavian acknowledges that the Charged Property remains subject
                to
                the provisions of clause 2.5(b) of the
                Charge.

            

    

    

    
      	 	
              7.

            	
              Octavian
                and eBet agree that (separate and distinct from, and not subject
                to, the
                other provisions of this letter) the Agreement should be amended
                as
                follows:

            

    

    

    
      	
            	(a)	
              The
                definition of "Interest Rate" shall be amended to read as
                follows:

            

    

    

    "means
      during the period from the first Drawdown Date to the date
      3
      months after
      that date, 13% per annum and thereafter, the corresponding
      interest rate charged to eBet under the MFS Causeway Loan
      Agreement";

    

    
      	
            	(b)	
              The
                definition of "Facility Period" shall be amended to read as
                follows:

            

    

    

    "means
      the period starting on the date of this Agreement and ending on 9 January 2008
      subject to possible extension out to 30 June, 2008 as may be agreed between
      the
      parties as part of the negotiations envisaged under paragraph 4 of the letter
      dated 11 January 2008 made between the parties (and the other provisions of
      that
      Letter)";

    

    
      	
            	(c)	
              Clause
                2.1 shall be amended to read as
                follows

            

    

    

    'Subject
      to the terms
      of
      this Agreement, the Lender has made available to the Borrower under this
      Facility, a total amount of AUS$3,242,500, such amount having
      been
      drawn down in full by the Borrower. This amount constitutes Secured Moneys
      for
      the purposes of the Charge".

    

    
      	 	
              8.

            	
              Octavian
                and eBet agree that Clause 6.3 of the Charge shall be amended by
                replacing
                the words "I80 days" in the first sentence with the words ", subject
                to
                the provision at the end of this clause 6.3, 30 days" and by the
                addition
                of a sentence in clause 6.3 at the end after (e), as follows: "The
                following provisions shall apply in respect of any Standstill
                Period:

            

    

    

    
      	
            	(a)	
              a
                Standstill Period shall expire no later than 30 July, 2008 regardless
                of
                when it commences;

            

    

    

    
      	
            	(b)	
              where
                a Standstill Period would commence at the expiry of the Facility
                Period by
                reason of a default in the repayment of the Secured Moneys, no such
                Standstill
                Period shall commence unless, by the date of the
                default, the Chargor
                has
                repaid
                to
                the Chargee,
                in total,
                a
                sum equal
                to
                AUS$1,621, 250
                of the Secured Moneys; and

            

    

     

    
      	 	
              (c)

            	
              there
                shall be a maximum of two Standstill Periods, being one at any time
                during
                the Facility Period and one at or around the expiry of the Facility
                Period".

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.

            	
              Octavian
                is liable for payment of default interest at the default
                specified in the MFS Causeway Loan Agreement (currently 3% above
                the rate
                specified in paragraph 7(a) above) on all overdue interest payments
                and on
                the principal amount of the Loan in the event that such amount is
                not
                repaid on or before 30 June 2008. Such interest shall be capitalised
                monthly or as applicable under the MSF Causeway Loan
                Agreement.

            

    

     

    
      	 	
              10.

            	
              The
                reconciliation amount of USD$ 137,499.52 as per the attached spreadsheet
                (marked "Reconcillation
                Amounts"),
                financing costs referred to in clause 4.1 and payments in respect
                of
                trademarks under clause 6.3 of the deed of agreement to be entered
                into on
                or before 14 January 2008 pursuant to paragraph 4 above and all
                outstanding amounts agreed by Octavian or determined as being due
                to eBet
                under the Flatpack Sale and Distribution Agreement dated 26 January,
                2007
                constitute Secured Moneys for the purposes of the
                Charge.

            

    

     

    
      	 	
              11.

            	
              Each
                party undertakes to the other to use its reasonable endeavours in
                good
                faith to enter into a binding agreement with the other by no later
                than 31
                January 2008, whereby:

            

    

     

    
      	 	
              a)

            	
              eBet
                is appointed as Octavian's non-exclusive distributor in the Asia/Pacific
                area (excluding Japan, China and India) of products comprised in,
                or
                derived from, the Charged Property;

            

    

     

    
      	 	
              b)

            	
              Octavian
                is appointed as non-exclusive distributor of eBet's gaming system
                products
                in Central and South America, Eastern Europe and
                CIS;

            

    

     

    
      	 	
              c)

            	
              eBet
                is appointed as Octavian's non-exclusive distributor of Logismos
                table
                management products in Australia, New Zealand and the Pacific Islands
                with
                effect from the date when Octavian's appointment as Logismos' distributor
                comes into effect.

            

    

     

    These
      appointments shall include other required terms to be agreed, including in
      relation to 11(c), terms relating to price structure and competition (subject
      to
      compliance with all applicable law and regulation.)

     

    Both
      parties agree that:

     

    
      	 	
              a)

            	
              they
                shall respond to any draft agreements within 3 working days in London
                and
                Sydney of receipt of the same;

            

    

     

    
      	 	
              b)

            	
              they
                shall be available for conference calls at least 3 times a week to
                be held
                on working days in London and Sydney at mutually agreed times;
                and

            

    

     

    
      	 	
              c)

            	
              the
                agreements shall be on the same terms in all material respects except
                where the context requires
                otherwise.

            

    

     

    
      	 	
              12.

            	
              Octavian
                agrees not to have any further discussions or other communication
                or
                contact with employees or representatives of Odyssey Gaming Limited
                (ACN
                074 735 452) (or any of its subsidiaries or related companies) in
                relation
                to the introduction of gaming system products into the Queensland
                gaming
                market, while any Secured Moneys remain outstanding. The terms of
                a
                Project Status Report (summarising the work undertaken on a proposed
                replacement machine monitoring system for Odyssey to date) are to
                be
                settled and included in the deed of agreement to be entered into
                before 31
                January 2008 pursuant to paragraph 4
                above.

            

    

     

    
      	 	
              13.

            	
              Octavian
                undertakes to provide a copy of this letter and the subsequent deed
                of
                agreement to be entered into between Octavian and eBet to PacificNet
                Inc
                and eBet consents to the provision of this information to PacificNet
                Inc.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.

            	
              The
                parties agree to a copy of this letter being provided to the Software
                Escrow Agent.

            

    

     

    
      	 	
              15.

            	
              This
                letter is supplementary to the Agreement and Charge, is governed
                by New
                South Wales law and the New South Wales courts have exclusive jurisdiction
                to settle any dispute in connection with
                it.

            

    

     

    Please
      sign, date and return the copy letter by way of acknowledgment and agreement
      of
      its terms.

     

    /s/
      Hans Zeidler 
      
        

      

    

    HANS
      ZIEDLER

    Signed,
      sealed and delivered

    For
      and on behalf of Octavian International
      Limited

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    We
      hereby
      acknowledge and agree to the terms of this letter

     

     

    /s/
      Tony Toohey

    
      
        

      

      TONY
        TOOHEY

      Signed,
        sealed and delivered

      For
        and on behalf of eBet Limited

       

      Dated:
        January 11, 2008ABN
      59
      056 210 774

    Unit
      13,
      112-118 Talavera Road, 

    NORTH
      RYDE NSW 2113 Australia

    Ph:
      + 61
      2 8817 4700

    Fax:
      + 61
      2 8817 4770

    www.ebetonline.com

    

    8
      February, 2008

    

    Octavian
      International Limited

    Bury
      House

    1-3
      Bury
      Street

    Guildford

    SURREY GU2
      4AW UNITED
      KINGDOM

    

    Attention
      : Harmen Brenninkmeijer/Hans Zeidler

    

    Dear
      Sirs,

    

    Deed
      of Agreement dated 16 January, 2008

    

    We
      refer
      to the above agreement ("Agreement")
      and
      advise that:

    

    
      	
              1

            	
              eBet
                has not received Octavian's monthly profit and loss account, balance
                sheet
                and cashflows for the month of December, 2007 as required by clause
                7.1(a);

            

    

     

    
      	
              2

            	
              eBet
                has not received written confirmation from Octavian that all outstanding
                contracts entered into by Octavian personnel in the name of Octavian
                Global Technologies Limited (ACN 056 210 778), have been terminated
                or
                novated as required by clause 7.3;

            

    

     

    
      	
              3

            	
              eBet
                has not been notified of the appointment of an independent valuer
                to value
                the Intellectual Property Rights comprised in the Charged Property,
                as
                required by clause 7.4;

            

    

     

    
      	
              4

            	
              eBet
                has not received confirmation from Octavian or the Software Escrow
                Agent
                that all Intellectual Property Rights deposited with the Software
                Escrow
                Agent in or about October, 2007 have been brought up to date as required
                by clause 7.5. In particular, we note
                that:

            

    

     

    
      	 	
              (a)

            	
              3-4
                Dream Games have now been approved by GLI for use in
                Europe;

            

    

     

    
      	 	
              (b)

            	
              the
                Maverick is currently with GLI in Adelaide for approval - expected
                at the
                end of February;

            

    

     

    
      	 	
              (c)

            	
              the
                Maverick has 1 Game as part of the above
                approval;

            

    

     

    
      	 	
              (d)

            	
              there
                is a new Rebel board as part of the above Maverick approval;
                and

            

    

     

    
      	 	
              (e)

            	
              MyACP
                has obtained GLI 13 certification for use in
                Europe;

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	
              5

            	
              eBet
                has not received full and reasonable information in relation to the
                218
                Mavericks owned by eBet (which Octavian has placed into the Latin
                America
                market) as required by clause 7.6;

            

    

     

    
      	
              6

            	
              eBet
                has not received a price list for products in respect of its appointment
                as Octavian's distributor under clause
                7.7(a);

            

    

     

    
      	
              7

            	
              Octavian
                has not responded to eBet's draft distribution contract referred
                to in
                clause 7.7(b);

            

    

     

    
      	
              8

            	
              eBet
                has not been notified by Octavian as to when Octavian's approval
                as
                Logismos' distributor comes into effect;
                and

            

    

     

    
      	
              9

            	
              eBet
                has not received from Octavian a Project Status Report as required
                by
                clause 7.8.

            

    

     

    The
      Agreement is a Transaction Document, and we hereby advise that Octavian is
      in
      breach of clause 5.1(a) of the Charge, in that it has failed to perform its
      obligations under a Transaction Document.

     

    We
      hereby
      give you notice under clause 7.1(b) of the Charge that you are in breach of
      obligations under the Charge as specified above, and require rectification
      of
      all those breaches within 5 Business Days after the date of this notice, in
      accordance with clause 7.1(b).

     

    Failure
      to comply with this notice will result in the occurrence of an Event of Default
      for the purposes of the Charge, and the commencement of a Standstill
      Period.

     

    We
      also
      advise that under clause 4.1(e), payment of the Reconciliation Amount
      (US$173,722.53) and refinancing costs (A$158,641.59) are due no later than
      30
      days after 16 January, 2008 (ie. 15 February 2008), whether or not Octavian
      obtains financial accommodation of US$5m as referred to in clause
      3.1(b).

     

    Terms
      and
      expressions defined in the Agreement have the same meaning where used in this
      letter. References to clause numbers are to clause numbers in the Agreement,
      unless the context requires otherwise.

     

    In
      closing we believe that eBet has been very accommodating and cooperative towards
      Octavian's obligations and our rights under and in connection with the Loan
      Agreement, Deed of Charge, Side Letter and Deed of Agreement, and in assisting
      Octavian to complete the transaction with PacificNet. eBet therefore expects
      in
      return that Octavian diligently manages its obligations as a sign of good faith
      and reciprocity.

     

    Yours
      faithfully,

    EBET
      LIMITED

     

    TONY
      TOOHEY

    CEO
&
      Managing Director

    
      
         

      

      
        2

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