HAND DELIVERED
Ms. Jean Baker
Vice President
American Arbitration Association
601 Pennsylvania Avenue, N.W., Suite 700
Washington, D.C. 20004-2676

Re: DigiGold.Net, Ltd., et al. v.
Ian Grigg and Systemics, Inc.

Dear Ms. Baker:

I represent the Claimants identified more fully below, DigiGold.Net, Ltd. ("DigiGold"), the Jackson Family Trust and the Downey Family Trust.

I am writing, pursuant to the International Arbitration Rules of the American Arbitration Association to provide written notice and to demand arbitration of the claims described more fully herein by the Claimants against Ian Grigg ("Grigg") and Systemics, Inc. ("Systemics") (collectively referred to at times as "Respondents").

Pursuant to the provisions of Article 2.3 of the International Arbitration Rules, Claimants submit the following information:

1. Claimants hereby demand that the dispute be referred to arbitration.

2. The names and addresses of the parties are:

   Claimants:
   DigiGold.Net, Ltd., a Nevis corporation
   c/o Global Corporate and trust Management, Ltd.
   Donegan Zetlands
   Nevis
   St. Kitts and Nevis, West Indies
   

   The Jackson Family Trust
   c/o Hil S. De Frias and Michael J. Mello
   Mello Jones & Martin
   Reid House, 31 Church Street
   Hamilton, HM 12, Bermuda
   

   The Downey Family Trust
   c/o Hil S. De Frias and Michael J. Mello
   Mello Jones & Martin
   Reid House, 31 Church Street
   Hamilton, HM 12, Bermuda
   

   Respondents:
   Ian Grigg
   Old Ta
   Anguilla
   iangasystemics.com
   

   Systemics, Inc., a Nevis corporation
   Old Ta
   Anguilla
   

3. An agreement between the parties to arbitrate disputes is set forth in a Software License Agreement, effective June 1, 1999, between DigiGold and Systemics and/or in an August, 1999 agreement between the parties, as well as in other understandings. Article 18 of the Software License Agreement, for example is titled "Disputes and Arbitration," and provides that "[a]ll disputes arising under this Agreement between the parties shall be subject to Arbitration."

4. This dispute arises out of various written agreements and other understandings between the parties, including, but not limited to, the Software License Agreement and/or Agreement of August, 1999, an agreement memorializing the parties' ownership interests in Systemics, the Currency Contract for DigiGold, and other related agreements.

5. This matter concerns a business relationship between the Claimants and Respondents relating to the establishment, ownership and operation of Systemics.

   DigiGold is the owner of the "DigiGold" gold-backed digital currency. Amongst other things, DigiGold can be e-mailed between users, and used to purchase items on the Internet.

   Systemics is a Nevis corporation. Grigg is a principal shareholder of Systemics, its software system manager and one of the programmers of Systemics.

   The Jackson Family Trust and the Downey Family Trust are additional shareholders of Systemics, and provided substantial funding and materials used to initiate and continue the operations of Systemics. Under the terms of an agreement between the parties, Claimants were to receive 25% of the shares of stock of Systemics.

   In or about August, 1999, DigiGold entered into the Software License Agreement with Systemics. Under the terms of the Software License Agreement, and related agreements, Systemics agreed to further the development of the DigiGold product. Systemics also developed a settlement server and a market server for use in connection with DigiGold transactions. As the Operator under the terms of the Currency Contract for DigiGold, Systemics is required to maintain and operate the servers. The DigiGold digital cash can be traded against other financial instruments only using the settlement server and the market server developed and operated by Systemics.

   Under the terms of its agreements with the Respondents, Claimants funded the development of the DigiGold product and the servers. Indeed, Claimants were the only source of funding for Respondents, and it was that funding which allowed Systemics to develop its products. To date, Claimants have contributed funds in the amount of nearly $400,000 to the Respondents.

   After seeking and utilizing the substantial funding from the Claimants, which Respondents have used to successfully establish for their benefit the business of Systemics, Respondents now wrongfully seek to terminate their contractual and business relationship with the Claimants. The Claimants have made numerous attempts to resolve this dispute with the Respondents, to no avail.

6. Claimants seek the following relief: from the arbitrator: (i) an Order declaring and affixing the joint ownership interests of the Jackson Family Trust and the Downey Family Trust in Systemics, Inc.; (ii) an Order restraining Respondents from terminating support for the DigiGold project and from taking the DigiGold settlement server and the market server offline and from removing the software and hardware from Systemics, Inc.'s place of business; (iii) an Order requiring Respondents to maintain and continue the settlement server and the market server in operation, complete their work under the terms of the Software License Agreement, and perform their obligations as the Operator under the terms of the Currency Contract for DigiGold; (iv) an Order requiring Respondents to enable trading between DigiGold instruments and other instruments such as, by way of example but without limitation, Hansa dollars; (v) an Order prohibiting Respondents from transferring or assigning to any other person any ownership or licensing rights in or to the intellectual property owned by Systemics, Inc.; (vi) an Order requiring Systemics to describe and account for any agreements into which it has entered for the transfer or assignment of any ownership or licensing rights to the intellectual property owned by Systemics, Inc.; and (vii) an Order requiring Respondents to promptly deliver to the Claimants the source code for both the settlement server and the market server, including providing the information and assistance necessary to build all required server hardware, train programmers in the source code and train personnel designated by Claimants on operational aspects of functioning as Operator, Mint, and Operator and principal of the settlement server and market server.

7. Claimants propose that this arbitration be conducted before a single arbitrator, in Baltimore, Maryland, and that the language of the arbitration be the English language.

I have enclosed this firm's check in the amount of $4,250.00 as the Initial Filing Fee for this matter.

I would be happy to provide any additional information that you may require. In the meantime, thank you for your attention to this matter.

Very truly yours,

Aron U. Raskas

Douglas W. Desmarais
Smith & Downey, P.A. One West Pennsylvania Avenue Suite 950 Towson, Maryland 21204

Counsel for Claimants


AUR/ams
Enclosure





cc: Barry K. Downey, Esquire



AUR/AUR/00019707.WPDv1