+-----------+ IN THE EASTERN CARIBBEAN SUPREME COURT |REGISTRAR's| IN THE HIGH COURT OF JUSTICE | OFFICE | ANGUILLA CIRCUIT | 9.55am | (CIVIL) |MAY 25 2001| A.D. 2001 | ANGUILLA | +-----------+ Claim No. 2001/0039 BETWEEN: DIGIGOLD.NET LIMITED Claimant AND SYSTEMICS INC. IAN GRIGG Defendents AFFIDAVIT OF BARRY DOWNEY IN SUPPORT OF APPLICATION FOR INJUNCTION I, BARRY DOWNEY, of One W. Pennsylvania Ave. Suite 950, Baltimore, Maryland 21204, being duly sworn MAKE OATH and say as follows: 1. That I am attorney at law, admitted to practice in the State of Maryland, and The United States Counsel to DigiGold.net Ltd, the Plaintiff herein. In addition, I also represent some of the shareholders of the First-named Defendant Company. I have full knowledge of certain information relevant to this suit and am duly authorised to make this Affidavit in support of the Plaintiff's application for an injunction against the Defendants. 2. The Defendant Company, Systemics Inc. is a Nevis corporation. The Defendant Ian Grigg is the principal shareholder of the Defendant Corporation, its Software System Manager and one [sic] the Programmers of the said Corporation. 3. In or about August 1999 the Plaintiff, a Nevis Corporation, entered into a software licence agreement with the said Defendant Company, Systemics Inc. whereby the Defendant Company would developed [sic] under the software license [sic] a product that is a gold backed digital cash called "DigiGold". The DigiGold digital cash can be traded against other financial instruments using the Market Server developed by the Defendants. The Plaintiff pursuint to the Agreement funded this development. 4. A further Agreement between the parties provided that the Plaintiff and its shareholders are entitled to 25% of the shares in the Defendant Corporation. A copy of the said Software Licence Agreement is exhibited herewith and labelled "BD1" for identification. 5. The Market Server and the server hosting the software and related products are housed and operated in Anguilla. 6. Pursuant to the agreement the Plaintiff has provided funding on "as needed" and "as requested basis" under this Agreement. 7. The total funds that have been sent by the Plaintiff Company and its shareholders over the two-year period are approximately US$370,000.00. As far as the Plaintiff is aware, this is the total funding that the Defendents have received from all sources. 8. The Second named Defendant, made his last request for funds in May 2000. Thereafter, the Plaintiff made several attempts to get him to ask for additional funds, but in October 2000, the Second Defendant, as agent of the First- Named Defendant, indicated for the first time that the relationship between the parties had changed and he did not think he could continue working with Plaintiff [sic]. 9. The Plaintiff has made several attempts to get the Defendants to accept additional funding, but the Second-named Defendant either did not respond to these requests or indicated that he had made other commitments and did not know if he could continue to support the projects and would let the Plaintiff know. The plaintiff has made attempt after attempt to enter into discussions to resolve the dispute without results. A copy of the e-mailed correspondence is exhibited herewith as a bundle and labelled "BD2" for indentification. 10. On May 21, 2001, the Second named-Defendant sent a notice to the Plaintiff that precipitously terminates the support for DigiGold and indicates that the DigiGold server will be taken offline as of Friday, May 25, 2001. 11. This termination will cause immediate and irreperable damange to the Plaintiff and to all persons who hold any balance of the digital cash DigiGold. The Defendants intend and will exclude [sic] DigiGold from the Market Server. 12. "DigiGold" has been operational in beta form for over one year. This digital cash has been sold over this period and a substantial amount of the digital cash is outstanding in the market that will be rendered useless if the DigiGold server is pulled offline and the software support is discontinued. 13. The Plaintiff has repeatedly confirmed its willingness to continue funding the project under the software license but to no avail. The Plaintiff will escrow the funding if necessary to confirm its commitment to fulfil its obligations under the said license. 14. The intervention of the Court is unfortunately necessitated to prevent the termination of the support for the Digigold digital cash and the exclusion of Digigold from the Market Server. This will allow the parties to immediately begin arbitration or other appropriate legal proceedings to resolve this dispute and to either continue the Plaintiff's relationship with the Defendants or obtain the DigiGold and Market Server software and hardware necessary for it to take over the support and development of these projects. 15. We ask the Court to issue an immediate injunction that Because [sic] the Defendants repeatedly have asserted how easy it is to remove themselves from legal process by "jumping a plane to the next Island", and because the software and hardware cannot function without the Second-named Defendant's involvement or without his first providing sufficient training to Plaintiff, Plaintiff also asks the Court to exercise its jurisdiction over the Defendant and prevent his flight from Anguilla. 16. Accordingly I respectfully ask that this Honourable Court grant the Plaintiff's application for an injunction restraining the Second named Defendant whether by himself of [sic] by any of his servants or agents or any of them or otherwise from terminating support for the DigiGold project or from taking the server off-line or from removing the software or hardware from this jurisdiction and further, that the Second-named Defendant be restrained from leaving the jurisdiction of Anguilla. 17. Insofar as the content of this Affidavit is within my personal knowledge, it is true and insofar as it is not within my personal knowledge, it is true to the best of my knowledge, it is true to the best of my knowledge, information and belief. [sic] SWORN to by the within-named ) ( B D ) BARRY DOWNEY ) ________________________ This 25th day of May 2001 ) BARRY DOWNEY ) ) Before me: ) (Tracie Marie Nye) __________________ Notary Public TRACIE MARIE NYE NOTARY PUBLIC STATE OF MARYLAND My Commission Expires August 2,2004