Business Sale Agreement between NetPlay TV PLC, Two Way Media Limited, and Two Way Gaming Limited (2009)
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Summary
This agreement is between NetPlay TV PLC (the buyer), Two Way Media Limited, and Two Way Gaming Limited (the sellers). It covers the sale and purchase of part of the business and assets of Two Way Gaming Limited, specifically the Challenge Jackpot Business and related assets. The agreement outlines the terms of sale, consideration (including cash and shares), transfer of contracts, treatment of employees, and post-completion obligations. It also details how liabilities and client balances are handled, and sets conditions for completion and restrictions on share transfers.
EX-10.1 2 exhibit_10-1.htm 10-Q 
EXHIBIT 10.1 DATED 2009 NETPLAY TV PLC and TWO WAY MEDIA LIMITED and TWO WAY GAMING LIMITED BUSINESS SALE AGREEMENT for the sale and purchase of part of the business and assets of Two Way Gaming Limited
CONTENTS 1. Interpretation 2 2. Conditions 8 3. Sale And Consideration 9 4. Liabilities And Assets 10 5. VAT 11 6. Completion 11 7. Client Balances 13 8. Post-Completion Conduct Of Challenge Jackpot 14 9. Post-Completion Conduct Of Winner And Teletext 16 10. Employees 17 11. Twm Contracts 21 12. Computer Contracts 22 13. Protection Of The Buyer's Interests 24 14. Restrictions On Transfer Of Consideration Shares 24 15. Entire Agreement 25 16. Miscellaneous 26 17. Third Party Rights 26 18. Further Assurance 26 19. Fees And Expenses 26 20. Announcements 26 21. Assignment 27 22. Notices 27 23. Waiver 27 24. Counterparts 28 25. Independent Expert 28 26. Governing Law And Jurisdiction 28
THIS AGREEMENT dated 2009 is made BETWEEN:- (1) TWO WAY MEDIA LIMITED (CN ###-###-####) whose registered office is at 19 Bolsover Street, London W1W 5NA ("TWM"); (2) TWO WAY GAMING LIMITED a company registered in Alderney with Company Number 1643 whose registered office is at Millennium House, Ollivier Street, St. Anne, Alderney ("TWG"); (together, the "Sellers"), and (4) NETPLAY TV PLC (CN ###-###-####) whose registered office is at 76 Church Street, Lancaster LA1 1ET (the "Buyer"). BACKGROUND (A) The Sellers carry on the Businesses. (B) TWM provides the services of the Employees to TWG for the purpose of the Challenge Jackpot Business. (C) The Sellers have agreed to sell and the Buyer has agreed to buy the Assets and the Challenge Jackpot Business on the terms and subject to the conditions of this Agreement. (D) TWM and the Buyer have agreed that the TWM Contracts shall be assigned to the Buyer on the terms and subject to the conditions of this Agreement. (E) The Sellers and the Buyer have agreed that the Buyer shall carry out the services involved in the operation of the Winner Business and the Teletext Business on the terms and subject to the conditions of this Agreement. IT IS AGREED as follows:- 1. INTERPRETATION 1.1 In this Agreement, each of the following shall, unless otherwise stated, have the following meanings:- "Act" the Companies Act 1985 (as amended from time to time); "2006 Act" the Companies Act 2006 (as amended from time to time); "AIM" the London Stock Exchange plc's market known as AIM; "AIM Rules" the rules of AIM (as amended from time to time); "Assets" the Computer System, the Commercial Information and all other assets owned by the Sellers and used primarily or exclusively for the Challenge Jackpot business (other than the Excluded Assets, the Employees, the Licence, the Computer Contracts and the Playtech Software); 2 "Business Day" a day (not being a Saturday or Sunday) on which clearing banks are open for general banking business in the City of London; "Businesses" the Challenge Jackpot Business, the Winner Business and the Teletext Business; "Buyer's Dickinson Dees LLP of St Ann's Wharf, 112 Quayside, Solicitors" Newcastle upon Tyne, NE1 3DX; "Cash the amount of the Consideration which the Buyer Consideration" elects to satisfy in cash; "Challenge the business of operating the interactive gaming Jackpot Business" business for VMTV known as "Challenge Jackpot"; "Challenge the loyalty points awarded to customers of the Points" Businesses by TWG at the rate of one point per £10 wagered; "CJ Database" a database belonging to TWG including the details of all customers of the Challenge Jackpot Business and the Client Balances in a form containing the data fields set out in Schedule 6 and containing approximately 21,211 entries, of whom approximately 13,266 have been active since 1 July 2008; "Client Balances" all amounts owed by TWG to the end users of the Businesses that constitute a cash liability, including the cash portion of each end user's bonuses (excluding unfulfilled bonuses) or unpresented cheques and one penny per Challenge Point outstanding at balance, any pending cash outs and any fulfilled Completion; "Commercial the CJ Database, the Passwords and all other Information" information, know-how, techniques, plans, forecasts, advice, lists, marketing material and records of the Sellers in relation to the Challenge Jackpot Business, including the items listed in Part 4 of Schedule 2; "Completion" completion of the sale and purchase of the Challenge Jackpot Business and the Assets; "Completion has the meaning given to it in clause 6.3.3; Client Balances" "Computer all arrangements and agreements pursuant to which Contracts" any third party provides any information technology products or services to the Businesses including all arrangements relating to the provision of maintenance and support, security, disaster recovery, facilities management, bureau and on-line services to the Businesses and the agreements particulars of which are set out in Part 1 of Schedule 2; "Computer System" all computer hardware and networks owned by the Sellers for the purposes of the Businesses including the Studio Equipment and the Gaming Equipment but excluding the Playtech Software; 3
"Conditions" the conditions set out in clause 2.1; "Consideration" the consideration specified in clause 3.2; "Consideration such number of new ordinary shares of 5 pence each Shares" in the capital of the Buyer as is calculated as follows:- X = A - B where:- X = the number of Consideration Shares A = the amount of the Consideration which the Buyer elects to satisfy in Consideration Shares (and which must be a multiple of B) B = the average mid market price of the Buyer's shares for the 20 Business Days prior to the Completion Date; "Disposal" whether directly or indirectly a sale, grant of options over, transfer, charge, pledge or any other disposition whatsoever, including an agreement to effect or create any of the foregoing and "Dispose of" shall be construed accordingly; "Dispute Notice" has the meaning given to it in clause 9.7; "Employees" the employees engaged in the Challenge Jackpot Business immediately before Completion and listed in Schedule 1; "encumbrance" all encumbrances including any option, lien, mortgage, debenture, charge, equity, rent charge, right of pre-emption, bill of sale, assignment or deposit for the purpose of security, pledge, right of set-off, retention of title, hypothecation or other encumbrance securing the repayment of monies or other obligation or liability or any agreement or commitment to create any of the foregoing; "Excluded those assets belonging to VMTV, possession of Assets" which, but not title to, is to be transferred to the Buyer and details of which are set out in Part 7 of Schedule 2; 4
"Excluded all Liabilities incurred or arising in connection Liabilities" with the Businesses prior to Completion, including but not limited to:- (a) all liability for Taxation as at Completion; (b) all amounts owed to the Sellers' banks as at Completion; (c) all amounts accrued or otherwise due to creditors of the Sellers as at Completion; (d) all amounts owing by the Sellers under any of the TWM Contracts as at Completion; (e) amounts due and owing or accrued as at Completion in respect of PAYE and National Insurance contributions in respect of the Employees; and (f) pension contributions due and owing or accrued as at Completion in respect of the Employees; "Expiry Date" has the meaning given to it in clause 8.7; "Freelance the contracts listed in part 2 of Schedule 2; Contracts" "Gaming Equipment" the equipment set out in Part 5 of Schedule 2; "Handover Payment" the sum of £223,855; "IMAC" Ingenious Media Active Capital Limited of Ogier House, St Julian's Avenue, St Peter Port, Guernsey GY1 1WA; "Independent a single independent chartered accountant of at Expert" least ten years' qualification appointed in accordance with clause 25; "Key Individuals" Guy Templer and Christopher Neil; "Liabilities" in relation to any matter, all actions, proceedings, costs, claims, losses, penalties, fines, awards, expenses and demands incurred or suffered by or brought or made against a party in respect of such matter; "Licence" the Full eGambling Licence issued by the Alderney Gambling Control Commission to TWG; "New Virgin the agreements to be finalised between VMTV and the Agreements" Buyer pursuant to the heads of terms concluded between those companies and referred to in the announcement to be made following execution of this Agreement; "Passwords" all passwords within the Sellers' control required to access and or administer the "Challenge Jackpot" website and any other website operated in conjunction with the Challenge Jackpot Business or to access the CJ Database or any other database, system or records operated or maintained in relation to the Challenge Jackpot Business; 5
"Permitted a Disposal referred to in clause 14.2; Disposal" "Playtech the software licence and services agreement of Contract" August 2008 between Playtech Software Limited and Win Gaming; "Playtech the Zonemas software being the software comprised Software" in the TWG back office and the Mix TV software being the software comprised in the broadcast graphic system and TV games which are operated by TWG; "Records" all books and records owned by the Sellers and which relate to the Businesses save for the Sellers' statutory books; "Relevant WT as defined in clause 9.1; Period" "Resolutions" the resolutions of the shareholders of the Buyer in substantially the same form as set out in Schedule 5; "Seller Group any holding company of TWM and/or TWG and all Company" companies or subsidiaries of TWM and/or TWG or of any such holding company; "Sellers' Macfarlanes LLP of 20 Cursitor Street, Solicitors" London EC4A 1LT; "Studio Equipment" the equipment listed in Part 6 of Schedule 2; "Subcontracting the period from Completion until (i) the earlier of Period" 1 July 2009 and such time as the Buyer acquires a Full eGambling Licence from the Alderney Gambling Control Commission or (ii) such other date as may be notified in writing by the Buyer to TWG in accordance with clause 8.8; "Tax" and all forms of taxation and duties, whether of the "Taxation" United Kingdom or elsewhere including corporation tax, advance corporation tax, VAT, H M Revenue & Customs and other import duties and any other form of tax or levy upon or in respect of income, profit or gains received, made or accrued or deemed to have been received, made or accrued prior to Completion in respect of the Businesses and any interest, charge, penalty or fine thereon in relation to taxation and duties; "Teletext the business of operating a gambling service which Business" is marketed and distributed by Teletext Limited (CN ###-###-####) under the Teletext Contract; "Teletext the contract between TWM, Teletext Limited and St Contract" Minver Limited dated 14 August 2006; "Teletext the database that contains the registration details Database" of all customers of the Teletext Database; 6
"Transfer the Transfer of Undertakings (Protection of Regulations" Employment) Regulations 2006 as amended from time to time; "TWG Client TWG's bank account with RBS International of Royal Account" Bank Place, 1 Glategny Esplanade, St Peter Port, Guernsey GY1 4BQ, with account name: Two Way Gaming - CLT; Sort Code: 162029; Account Number: 56314390. "TWM Contracts" the Freelance Contracts and the contracts listed in Part 3 of Schedule 2; "VAT" value added tax; "Virgin Settlement Settlement an agreement between VMTV, Virgin Media Agreement" Limited, TWM, TWG and Two Way Media Holdings Limited in relation to settling certain issues arising in respect of TWG's conduct of Challenge Jackpot; "VMTV" Virgin Media Television Limited, a company registered inEngland and Wales with Company Number ###-###-####, having its registered office at 160 Great Portland Street, London W1W 4QA; "Win Gaming" Win Gaming Media, Inc a company registered under the laws of Delaware and whose principal place of business is at 103 Foulk Road, Suite 202, Wilmington, Delaware 19803, USA; "Winner Business" the business of operating an online casino, www.winnerchannel.com; "Winner Assets" the URL www.winnerchannel.com, the Winner Database and all other assets owned by TWM for the conduct of Winner (insofar as they are not comprised within the Assets); and "Winner Database" the database that contains the registration details of all customers of the Winner Business. 1.2 In this Agreement:- 1.2.1 any gender includes any other gender; 1.2.2 the singular includes the plural and vice versa; 1.2.3 references to persons include bodies corporate, unincorporated associations, governments, states, partnerships and trusts (in each case, whether or not having separate legal personality); 1.2.4 the recitals and the Schedules form part of this Agreement and the expression "this Agreement" includes the recitals and the Schedules; 1.2.5 any reference to a statutory provision includes a reference to any modification, consolidation or re-enactment of the provision from time to time in force and all subordinate instruments, orders or regulations made under it; 7
1.2.6 a reference to any of the parties includes, where appropriate, persons deriving title under it; 1.2.7 general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; 1.2.8 references to a person acting "directly or indirectly" include acting alone or jointly with or by means of any other person; and 1.2.9 references to any document (including this Agreement) or a provision thereof shall be construed as a reference to that document or provision as from time to time supplemented, varied or replaced. 2. CONDITIONS 2.1 The sale and purchase of the Challenge Jackpot Business and the Assets is conditional upon:- 2.1.1 the due passing by the shareholders of the Buyer in general meeting of the Resolutions; and 2.1.2 completion of the New Virgin Contracts in accordance with their terms. 2.2 The Buyer shall use its reasonable endeavours to ensure the satisfaction of the Conditions as soon as reasonably practicable after Completion, including but not limited to, circulating the Resolutions to shareholders as soon as possible and in any event within 10 days of the date of this Agreement. 2.3 If the Conditions have not been fulfilled or waived by the Buyer on or before 15 May 2009 (or such later date as the Buyer and the Sellers agree in writing), the Sellers (acting together) shall have the right to terminate this Agreement, in which event the Buyer shall pay to the Sellers' Solicitors (to be apportioned among the Sellers as they see fit) a sum equal to the lesser of:- 2.3.1 an amount equal to all costs, charges and expenses incurred by the Sellers in connection with the negotiation, preparation, performance and termination of this Agreement and the documents in agreed form and all matters which it contemplates; and 2.3.2 £100,000. which payment shall be in full and final satisfaction of all claims which the Sellers might have in connection with this Agreement against the Buyer. 2.4 During the period up to Completion each of the Sellers shall comply with the provisions of Schedule 4 that apply to them. 2.5 Before issuing any Consideration Shares the Buyer shall deliver to the Sellers a copy of a valuation of the Challenge Jackpot Business and the Assets in the form required by Section 103 of the Act and to the extent it is unable to do so the Buyer shall not be permitted to satisfy the Consideration in Consideration Shares and shall pay the Consideration in cash. 8
3. SALE AND CONSIDERATION 3.1 Subject to clause 2, the Sellers shall sell and the Buyer shall buy the Assets and the Challenge Jackpot Business. 3.2 The consideration for the sale of the Challenge Jackpot Business and the Assets shall be £2,000,000 together with the assumption by the Buyer of the liabilities expressly referred to in this Agreement as being assumed by the Buyer and the £2,000,000 shall be satisfied at Completion in accordance with clause 6 as follows:- 3.2.1 by the payment of the Cash Consideration in cash; and/or 3.2.2 by the allotment and issue of the Consideration Shares to TWG (or as they may reasonably direct but subject always to the provisions of clause 14). 3.3 The split of the Consideration between Cash Consideration and Consideration Shares shall be at the discretion of the Buyer. 3.4 The Consideration shall be apportioned as follows:- 3.4.1 the Computer System: £29,999; 3.4.2 the benefit (subject to the burden) of the TWM Contracts and any other assets comprised within the definition of Assets: £1; and 3.4.3 the Commercial Information: £1,970,000. 3.5 The Assets shall be sold:- 3.5.1 with full title guarantee; and 3.5.2 free from any encumbrance or third party right of any nature. 3.6 The Buyer warrants and undertakes to TWG that:- 3.6.1 the Consideration Shares shall be allotted and issued conditionally upon, and upon the occurrence of, admission to AIM; 3.6.2 any Consideration Shares to be issued to TWG pursuant to this Agreement shall be properly and effectively allotted and issued to them in accordance with:- (a) the Buyer's articles of association; (b) section 103 of the Act; and (c) the AIM Rules; 3.6.3 as soon as practicable after the issue of such Consideration Shares the name of the allottee(s) shall be entered in the register of members of the Buyer in respect of such Consideration Shares; 9
3.6.4 it shall use all reasonable endeavours (excluding taking legal proceedings of any type) to ensure that all the Consideration Shares are admitted to listing and trading on AIM as soon as reasonably practicable after they are allotted and issued and in any event within 7 days of such allotment and issue; 3.6.5 if the Buyer is unable to procure the admission of the Consideration Shares to AIM within 7 Business Days of their allotment and issue then the Buyer may, by notice to the Seller, elect to reduce the amount (if any) of the Consideration otherwise required under this Agreement to be satisfied by the allotment and issue of Consideration Shares (to zero if necessary) and to satisfy all or part of such amount by way of a cash payment. Any such payment shall be made as soon as reasonably practicable in accordance with clause 6.5.2; 3.6.6 all the Consideration Shares shall be issued credited as fully paid; 3.6.7 it will procure that the Buyer's registrars shall issue suitable share certificates (or credit the appropriate CREST account) in respect of all the Consideration Shares within 10 Business Days of such Consideration Shares being issued and allotted; 3.6.8 all the Consideration Shares shall rank pari passu in all respects with the existing issued ordinary shares of 5 pence each in the capital of the Buyer as from the date on which such Consideration Shares are issued; and 3.6.9 at the date of this Agreement its executive directors are not knowingly relying on the guidance notes to AIM Rule 11 as a basis for failing to withhold price sensitive information from disclosure, it has made all regulatory announcements required by the AIM Rules and is, in all material respects, in full compliance with the requirements of the AIM Rules. 3.7 TWG warrants to the Buyer that the CJ Database has been properly collated and (to the best of its knowledge and belief) stored and managed in accordance with data protection legislation in each applicable jurisdiction where the Challenge Jackpot Business is conducted and (save as set out in any arrangements which the Buyer has entered into with VMTV), subject to compliance with the undertakings given in Clause 8, the Buyer will not be under any restrictions in using the same for its conduct of the Challenge Jackpot Business with effect from Completion. 4. LIABILITIES AND ASSETS 4.1 Subject to clause 4.2, the Buyer shall, assume responsibility for the due and punctual payment, satisfaction and discharge of the obligations of the Sellers arising from the date of Completion under or in respect of:- 4.1.1 the TWM Contracts (but only insofar as copies of such contracts or written details of their terms have been provided by the Sellers to the Buyer prior to the date hereof); 4.1.2 the Client Balances; 10
4.1.3 all other liabilities, obligations and provisions of whatever nature incurred by the Sellers as a result of the Buyer's provision of the Challenge Jackpot Business with effect from Completion; and 4.1.4 for the duration of the Relevant WT Period, those liabilities arising pursuant to clauses 9.1 and 9.5. 4.2 Nothing in this Agreement shall transfer or be deemed to transfer to the Buyer or constitute or be deemed to constitute an acceptance or assumption by the Buyer of any of the Excluded Liabilities or any other liability or obligation of the Sellers arising prior to Completion, whether in relation to the Businesses or otherwise, except as expressly set out in this Agreement. 4.3 The Buyer acknowledges that the Excluded Assets are and remain the property of VMTV and that no title to the Excluded Assets shall be transferred to the Buyer pursuant to this Agreement. 4.4 Subject to clause 4.3, at Completion, TWG will deliver to the Buyer the Excluded Assets and the terms of this Agreement shall apply to the Excluded Assets as if they were included in the definition of the Assets. 5. VAT All payments to be made or other consideration to be given (whether in cash or otherwise) pursuant to this Agreement shall (except where otherwise specifically stated) be taken to be exclusive of VAT (if applicable), and if any VAT is properly chargeable in respect of the supplies for which such payments are made or such consideration is given, such VAT shall be added to the amount of, and be paid in addition to, them in cash. 6. COMPLETION 6.1 Completion shall take place at the offices of the Sellers' Solicitors immediately following satisfaction of the conditions set out in clause 2 or at such other place or time as the parties may agree. 6.2 Title and risk of loss or damage to the Assets shall pass to the Buyer at Completion. Title to those Assets which are capable of transfer by delivery shall pass on such delivery. 6.3 At Completion the Sellers shall (so far as the following applies to each of them):- 6.3.1 deliver to the Buyer the documents specified in Schedule 3; 6.3.2 deliver to the Buyer at their then present location:- (a) the Computer System; (b) the CJ Database; (c) the Passwords; and (d) all other physical assets; 11
6.3.3 calculate and notify the Buyer of the level of the Client Balances as at 9am on the date of Completion (the "Completion Client Balances") and ensure that such amounts remain (subject to the provisions of this Agreement) in the TWG Client Account; and 6.3.4 use reasonable endeavours to procure that Nichola Halverson and Dan Wortley, or such other persons as the Buyer may nominate, be authorised as signatories to the TWG Client Account. 6.4 The Buyer shall not be obliged to complete this Agreement until the Sellers fully comply with clause 6.3. 6.5 At Completion, the Buyer shall:- 6.5.1 pay the first instalment of the Handover Payment in accordance with clause 10.8 by telegraphic transfer to such bank account as TWM shall nominate; and 6.5.2 pay the Cash Consideration (if any) by telegraphic transfer to the client account of the Sellers' Solicitors (account name: Macfarlanes Client No 1 Account; sort code: 15 10 00; account number: 15388776); and/or 6.5.3 allot and issue to credited as fully paid and free from encumbrances the Consideration Shares. 6.6 Any Consideration Shares shall be issued to TWG. To the extent that prior to Completion TWG delivers to the Buyer's Solicitors suitable evidence that TWG's rights to receive Consideration Shares have been lawfully assigned to IMAC and/or Win Gaming then such shares will be lawfully issued directly to IMAC and/or Win Gaming, subject to the provisions of clause 14. 6.7 The receipt in the Sellers' Solicitors' bank account of the Cash Consideration and the allotment of any Consideration Shares shall be a full and sufficient discharge for the Consideration. 6.8 For a period of six years from Completion the Buyer will make the Records available for inspection by representatives of the Sellers at all reasonable times during business hours on reasonable advance notice being given. The Buyer shall: 6.8.1 for a period of six years from Completion, allow the Sellers' representatives to take copies, at the Sellers' expense, of any of the Records reasonably required by them in respect of the tax affairs of the Sellers; and 6.8.2 for a period of three years from Completion, allow the Sellers' representatives to take copies, at the Sellers' expense of any of the Records reasonably required by them. 6.9 If Completion has not occurred prior to 11 April 2009, the Buyer shall provide office space to the Employees and all equipment necessary for the Employees to carry on their roles until the earlier of Completion and 15 May 2009. 12
7. CLIENT BALANCES 7.1 The Buyer acknowledges that the Client Balances are not the property of TWM or TWG and that, subject to clause 7.7, nothing in this Agreement shall operate to transfer, or create an obligation on either TWM or TWG to transfer, the Client Balances to the Buyer. 7.2 From Completion until such time as the following conditions (the "CB Conditions) are satisfied:- 7.2.1 the Buyer acquires a Full eGambling Licence from the Alderney Gambling Control Commission; and 7.2.2 the Alderney Gambling Control Commission confirms to TWG in writing that the Client Balances may be released to the Buyer the Client Balances shall remain in the TWG Client Account. 7.3 From Completion until such time as the CB Conditions are satisfied the Buyer and TWG shall, at the cost and expense of the Buyer, weekly on a Business Day to be determined by the Buyer and TWG:- 7.3.1 calculate the level of the Client Balances at midday on such day; 7.3.2 where necessary, verify whether monies in the TWG Client Account as at Completion were sufficient to cover the Completion Client Balances (after making appropriate reconciliation for unpresented cheques, errors and timing differences) and if there was a deficit then TWG shall forthwith pay into the TWG Client Account an amount equal to that deficit; and 7.3.3 determine whether the amount of the Client Balances exceeds or falls short of the level of the Completion Client Balances. 7.4 Subject to clause 7.3.2, whenever the Buyer and TWG have agreed or determined the amount by which the Client Balances exceed or fall short of the level of the Completion Client Balances:- 7.4.1 where the level of the Client Balances exceeds the level of the Completion Client Balances, the Buyer shall, at its own cost and expense, immediately pay into the TWG Client Account a sum equal to the amount by which the level of the Client Balances exceeds the level of the TWG Client Account; and 7.4.2 where the level of the Client Balances falls short of the level of the Completion Client Balances, the signatories to the TWG Client Account shall, at the cost and expense of the Buyer, immediately procure the payment to the Buyer of a sum equal to the amount by which the level of the Client Balances falls short of the level of the TWG Client Account. 7.5 If at any time before the Buyer acquires a Full eGambling Licence from the Alderney Gambling Control Commission:- 7.5.1 the Alderney Gambling Control Commission confirms to TWG in writing that the Client Balances may be released to the Buyer; and 13
7.5.2 the total cash liability to customers or clients of the Businesses exceeds the level of the Client Balances the Buyer shall, at its own cost and expense, as soon as possible, and in any event within 24 hours of receiving notice from TWG, pay into the TWG Client Account an amount equal to the amount by which such total cash liability exceeds the level of the Client Balances. 7.6 The Buyer undertakes to indemnify TWG against every loss, liability and cost that TWG may incur as a result of any failure on the part of the Buyer to comply with its obligations under clauses 7.4.1 and 7.5. In addition, the Buyer acknowledges that any failure on its part to comply with its obligations under clause 7.4.1 and 7.5 may result in the suspension or revocation of the Licence by the Alderney Gambling Control Commission and the Buyer agrees that TWG shall bear no responsibility for any such suspension or revocation. 7.7 As soon as reasonably practicable after the date on which the CB Conditions are satisfied, the signatories to the TWG Client Account shall transfer the Client Balances that relate to the Challenge Jackpot Business to the Buyer. In the event that the CB Conditions are satisfied prior to the termination of the Relevant WT period, then the signatories to the TWG Client Account shall also transfer to the Buyer as soon as reasonably practicable the Client Balances relevant to the Winner and Teletext Businesses and upon the expiry of the Relevant WT Period such Client Balances the Buyer shall procure that the Client Balances relevant to the Winner and Teletext Businesses will be transferred back to the Sellers. 7.8 Any dispute relating to Client Balances which cannot be agreed within 10 Business Days shall be referred to the Independent Expert. 8. POST-COMPLETION CONDUCT OF CHALLENGE JACKPOT 8.1 During the Subcontracting Period the Buyer shall, at its own cost and expense, operate Challenge Jackpot as sub-contractor of TWG under the terms of the Licence. 8.2 The Buyer undertakes, at its own cost and expense, during the Subcontracting Period to:- 8.2.1 operate the Challenge Jackpot Business using the software and hardware comprised in the Assets and/or (if so reasonably requested by TWG with a view to ensuring compliance with the Licence) as supplied by TWG and/or its sub-contractors from time to time without amendment or modification; 8.2.2 adhere to the processes set out in the Two Way Gaming Internal Control Systems Manual as approved by the Alderney Gambling Control Commission; 8.2.3 retain the Key Individuals as employees of the Buyer; and 8.2.4 operate the gambling operations of Challenge Jackpot at the direction of the Key Individuals and in accordance with any reasonable requests made by TWG with a view to ensuring compliance with the Licence. 14
8.3 Notwithstanding the terms of clause 8.1, the Buyer shall from Completion be entitled to all revenues of the Challenge Jackpot Business and be responsible for all costs, liabilities and expenses in relation to the Buyer's operation of the Challenge Jackpot Business. 8.4 Until the expiry of the Subcontracting Period, TWG undertakes to the Buyer that it shall at the expense of the Buyer, do all such acts and things as are reasonably necessary to ensure that the Licence continues in full force and effect. 8.5 The Buyer undertakes to indemnify TWG against every loss, liability and cost that TWG may incur as a result of:- 8.5.1 any failure on the part of the Buyer to comply with its obligations under clause 8.2; and 8.5.2 the Buyer's conduct of the Challenge Jackpot Business from Completion. 8.6 TWG undertakes to indemnify the Buyer against every loss, liability and cost that the Buyer may incur as a result of any failure on the part of TWG to comply with its obligations under clause 8.4. 8.7 The Buyer recognises that the Licence will expire on 31 August 2009 (the "Expiry Date") and subject to clause 8.8 TWG shall not be required to renew or apply for any renewal of the Licence and the Buyer undertakes, at its own cost and expense, to use all reasonable endeavours to procure a Full eGambling Licence from the Alderney Gambling Control Commission for the purpose of the Businesses as soon as practicable after Completion. 8.8 In the event that a delay arises in the Buyer obtaining a full eGambling Licence which is beyond the control of the Buyer, TWG and the Buyer agree that the Buyer may notify TWG in writing that the Subcontracting Period shall be extended such that the Buyer may continue to operate under the Licence in accordance with clause 8.2 beyond 1 July 2009 until no later than 31 August 2009 and, if it is agreed between the Buyer and TWG, TWG shall use reasonable endeavours to renew or extend the Licence beyond the Expiry Date, and in this event the Buyer shall:- 8.8.1 indemnify TWG against all reasonable costs and expenses incurred in connection with the maintenance, extension or renewal of the Licence; and 8.8.2 pay to TWG the sum of £10,000 monthly in advance from 1 July 2009 until the date 30 days after the date on which the Buyer notifies TWG that it has acquired a Full eGambling Licence from the Alderney Gambling Control Commission and TWG shall not unreasonably refuse to agree to obtain such a renewal or extension. 8.9 In the event that the Buyer has not acquired a Full eGambling Licence from the Alderney Gambling Control Commission prior to the expiry of the Subcontracting Period, TWG shall, at the Buyer's cost and expense, take all reasonable steps requested by the Buyer to migrate the Challenge Jackpot Business to a different jurisdiction (subject always to agreeing any such plan with the Alderney Gambling Control Commission and provided that no steps would contravene the Licence) but in the event that the Challenge Jackpot Business is not so migrated the Buyer shall, at its own cost and expense, comply with the terms of a plan agreed with the Alderney Gambling Control Commission to terminate the Challenge Jackpot Business. 15
9. POST-COMPLETION CONDUCT OF WINNER AND TELETEXT 9.1 The Buyer undertakes, from Completion until 1 July 2009, or such later date as the Buyer and the Sellers may agree in writing (the "Relevant WT Period"), that it will carry out the services involved in the operation of the Winner Business and the Teletext Business (including those services as specified in the Teletext Contract), in each case as a going concern with a view to profit and in accordance with the terms of the Licence. 9.2 The Sellers shall use all reasonable endeavours to assist the Buyer in respect of the carrying out by the Buyer of its obligations under clause 9.1. 9.3 The Sellers hereby grant to the Buyer for the Relevant WT Period a licence of the Winner Assets and the Teletext Database, solely to enable the Buyer to perform its obligations under clause 9.1 and for no other purpose and the Buyer undertakes that it shall not use the information contained in either the Teletext Database or the Winner Database to entice customers of either the Winner Business or the Teletext Business, to use any other service owned or operated by the Buyer or to market any other product offered by the Buyer to those customers. 9.4 In the event of any failure on the part of the Buyer to comply with its obligations under clause 9.1 the Sellers may revoke the licence granted under clause 9.3 immediately upon notice in writing to the Buyer and require the immediate return of the Winner Assets and the Teletext Database. 9.5 Subject to clauses 9.1 to 9.3, from Completion: 9.5.1 the Buyer shall on a monthly basis account to the Sellers for 80% of all net profits (and, accordingly, the Buyer shall, for the avoidance of doubt, be entitled to the remaining 20% in consideration or the provision of the services under clause 9.1.1), calculated in accordance with the formulae set out in Part 1 (in respect of Winner) and Part 2 (in respect of Teletext) of Schedule 7, arising from the operation of the Winner Business and the Teletext Business ("Profits"); 9.5.2 the Buyer shalI be responsible for discharging all costs and expenses in relation to the operation of the Winner Business and the Teletext Business on behalf of the Sellers insofar as the relevant income is sufficient save that nothing in this Agreement shall oblige the Buyer to purchase any new equipment in order to operate the Winner Business or the Teletext Business or to discharge any costs and expenses to the extent that the income is insufficient to meet such costs and expenses the Sellers jointly and severally undertake to reimburse the Buyer within 7 days of receiving notice in writing from the Buyer of the need for such reimbursement; 9.5.3 in the event that the Sellers are required to reimburse the Buyer in respect of costs and expenses in accordance with clause 9.5.2, the Sellers shall be entitled to revoke the licence granted under clause 9.3 and the Buyer shall as soon as reasonably practicable cease to incur any further such expenses and the Relevant WT Period shall come to an end; and 16 9.6 Any Profits due to the Sellers shall be determined and paid (subject to clause 9.7) by the Buyer on a monthly basis, such determination to be made and notified in writing to TWG within 14 days of the end of the relevant month and paid to TWG within 14 days of such notification. 9.7 Any dispute as to the amount of Profits shall be notified by the Sellers to the Buyer in writing in accordance with clause 22 of this Agreement (a "Dispute Notice") within 14 days of the monthly determination referred to at clause 9.6, failing which the Buyer's determination of the Profits for that month shall be conclusive. On receipt of a Dispute Notice the parties shall attempt to agree the Profits due for the month in question. If agreement cannot be reached within 30 days of receipt by the Buyer of a Dispute Notice the amount of Profits due to the Sellers for that month shall be determined conclusively by an Independent Expert appointed pursuant to clause 25 of this Agreement. 9.8 Until the earlier of the end of the Subcontracting Period and the end of the Relevant WT Period, the Buyer undertakes, at its own cost and expense (save as aforesaid), to:- 9.8.1 carry out the services involved in the operation of the Winner Business and the Teletext Business using the software and hardware comprised in the Assets and/or (to the extent reasonably requested) as supplied by TWG and/or its sub-contractors from time to time without amendment or modification; 9.8.2 adhere to the processes set out in the Two Way Gaming Internal Control Systems Manual as approved by the Alderney Gambling Control Commission; and 9.8.3 operate the gambling operations of the Winner Business and the Teletext Business at the direction of the Key Individuals. 9.9 From such time as the Buyer acquires a Full eGambling Licence from the Alderney Gambling Control Commission in respect of the Businesses, insofar as it is involved in the operations of the Winner Business and the Teletext Business it shall do so under the terms of such licence and in so doing the Buyer undertakes, at its own cost and expense (save as aforesaid), to do all such acts and things as are reasonably necessary to ensure that such licence continues in full force and effect for the remainder of the Relevant WT Period. 9.10 Notwithstanding anything else in this Agreement, the Buyer shall not be liable for any Liabilities relating to the Winner Business or the Teletext Business save as expressly set out in clause 9.5 and then only to the extent the relevant costs and expenses can be satisfied out income, but nothing shall relieve the Buyer of any liability in respect of its obligations under clause 9.1 and in respect of any liability as a result of its own negligence or wilful default. 10. EMPLOYEES 10.1 The Sellers and the Buyer acknowledge that the sale and purchase of Challenge Jackpot constitutes a "relevant transfer" for the purposes of the Transfer Regulations and that under the Transfer Regulations the contracts of employment of the Employees shall have effect from Completion as if they had been originally entered into between the Buyer and the Employees (except insofar as such contracts relate to old age, invalidity and survivors benefits under any occupational pension scheme as referred to in regulation 10 of the Transfer Regulations) or, in the case of a collective agreement in respect of the Employees, between the Buyer and the relevant trades union (as the case may be). 17
10.2 The Sellers shall perform and discharge (and shall procure the performance and discharge of) all their obligations and the obligations (if any) of any and all Seller Group Companies towards the Employees for the period up to but excluding Completion including paying all their remuneration/benefits, paying all mandatory PAYE and national insurance contributions, paying any amounts agreed or determined to be paid to any Employee whether in contract or in tort or by way of remedy for unfair dismissal, redundancy, discrimination or other breach of legal obligation in respect of his employment before Completion, and discharging all the Sellers' obligations towards the Employees under the Transfer Regulations and shall indemnify the Buyer against all claims, costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other professional costs and expenses arising directly or indirectly from: 10.2.1 any claim by any Employee arising from his employment with the Sellers or any Seller Group Company including any termination by the Seller or any Seller Group Company of the contract of employment of any Employee during the period up to Completion; 10.2.2 any claim by any employee or former employee of the Seller or any Seller Group Company (other than the Employees) arising from his employment with the Seller or any Seller Group Company or the termination of that employment by the Sellers or any Seller Group Company (howsoever arising); and 10.2.3 subject to Clause 10.3.2 below, any failure by the Sellers or any Seller Group Company to comply with their obligations under regulations 13 and/or 14 of the Transfer Regulations. 10.3 The Buyer shall with effect from and including Completion assume responsibility as the employer of the Employees and shall perform and discharge for its own account all obligations towards the Employees for the period from and including Completion including paying all their remuneration and benefits, paying all mandatory PAYE and national insurance contributions, paying any amounts agreed or determined to be paid to any Employee whether in contract or in tort or by way of remedy for unfair dismissal, redundancy, discrimination or other breach of legal obligation in respect of his employment from and including Completion, and discharging all the Buyer's obligations towards the Employees under the Transfer Regulations and shall indemnify the Sellers against all claims, costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other professional costs and expenses arising from: 10.3.1 the Buyer's performance and discharge of, or any failure by the Buyer to perform or discharge, those obligations including any termination by the Buyer of the contract of employment of any Employee after Completion (whether by reason of redundancy or otherwise); 10.3.2 any failure by the Buyer to comply with its obligations under regulation 13(4) of the Transfer Regulations; 10.3.3 any claim by any Employee under or by reason of regulation 4(9) of the Transfer Regulations; and 18
10.3.4 any claim by any Employee that the transfer involves or would involve a change amounting to a repudiatory breach of his contract of employment on the part of his employer. 10.4 If any contract of employment of a person other than an Employee has effect following Completion as if originally made between the Buyer and that person or is alleged to have such effect: (i) the Buyer shall notify the Sellers of that effect or allegation (as the case may be) promptly and in any event within ten Business Days of becoming aware of it; (ii) within ten Business Days of receiving such notification, the Sellers shall procure that an offer of employment is made to that person on the same terms and conditions as applied to that person immediately before Completion; and (iii) within ten Business Days of such offer having been made (or within ten business days of notification under 10.4 (i) above if no such offer is made), the Buyer may terminate the employment of such person provided that the Buyer complies with any relevant statutory dismissal procedures in force at the time of such dismissal (including compliance with the ACAS code, where relevant). The Sellers shall indemnify the Buyer against any claims, costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other professional costs and expenses arising out of the employment or termination of employment of any person by the Buyer in accordance with this clause. 10.5 The Sellers undertake to the Buyer:- 10.5.1 not to materially alter (whether to take effect prior to, on or after Completion) (and procure that no Seller Group Company so alters) any of the terms of employment or engagement of any of the Employees or to promise or make any representation that any such terms shall be altered; 10.5.2 not to make any deduction (and procure that no Seller Group Company makes any deduction) from the salary or other wages due to any of the Employees (otherwise than in respect of PAYE and National Insurance contributions) unless such deduction shall previously have been approved in writing by such of the Employees; 10.5.3 not to terminate or take any steps to terminate the contract of employment of, nor to dismiss (constructively or otherwise) (and procure that no Seller Group Company terminates the contract of employment of or dismisses) any of the Employees without the prior written consent of the Buyer; and 10.5.4 not to transfer or move or re-deploy any of the Employees from working within the Business, or induce any such Employee to resign his employment from the Business or agree to transfer or move or be re-deployed from the Business (and procure that no Seller Group Company transfers or moves or re-deploys any of the Employees or induce any Employee to resign or move or transfer) without the prior written consent of the Buyer. 10.6 The Buyer shall: 10.6.1 promptly on becoming aware of any claim under clauses 10.1, 10.4 or 10.9 or any facts or circumstances that might give rise to such a claim notify the Sellers in writing with full details of the relevant claim, facts or circumstances; 19
10.6.2 promptly provide all information available in relation to any such claim, facts or circumstances to the Sellers and shall ensure that the Sellers shall be kept fully informed and shall be provided on request with all information available and copies of all correspondence and documentation relating to such claim; 10.6.3 subject to being satisfied that it is fully indemnified in respect to the claim and its settlement take such action as the Sellers may from time to time reasonably request in relation to such claim, including to avoid, dispute, resist, appeal, compromise or defend the claim; 10.6.4 if so required by the Sellers in writing, permit the Sellers to take over the conduct of all proceedings and/or negotiations of whatsoever nature arising in connection with the claim; and 10.6.5 not without the consent of the Seller settle any claim or admit any liability. 10.7 The Sellers shall: 10.7.1 promptly on becoming aware of any claim under clause 10.3 or any facts or circumstances that might give rise to such a claim notify the Buyer in writing with full details of the relevant claim, facts or circumstances; 10.7.2 promptly provide all information available in relation to any such claim, facts or circumstances to the Buyer and shall ensure that the Buyer shall be kept fully informed and shall be provided on request with all information available and copies of all correspondence and documentation relating to such claim; 10.7.3 subject to being satisfied that it is fully indemnified in respect to the client and its settlement take such action as the Buyer may from time to time reasonably request in relation to such claim, including to avoid, dispute, resist, appeal, compromise or defend the claim; 10.7.4 if so required by the Buyer in writing, permit the Buyer to take over the conduct of all proceedings and/or negotiations of whatsoever nature arising in connection with the claim; and 10.7.5 not without the consent of the Buyer settle any claim or admit any liability. 10.8 Subject to clause 10.9 the Buyer shall pay to TWM the Handover Payment in six equal monthly instalments as payment for TWM providing assistance with an orderly handover of Challenge Jackpot. 10.9 If, during the period of seven months following Completion, any claims are presented against the Buyer (whether as sole or co-respondent) in respect of which the Buyer has the benefit of an indemnity under clauses 10.1 or 10.4 above, no further instalments of the Handover Payment shall be made to TWM until the last of those claims has been settled and/or determined by an Employment Tribunal or Court and the Buyer has offset any outstanding instalments against any reasonable costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other reasonable professional costs and expenses incurred by the Buyer as a result of any such claims. Where: 20
10.9.1 the amount of such costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other reasonable professional costs and expenses incurred by the Buyer as a result of a claim covered by clauses 10.2 or 10.4 exceeds the amount of any outstanding instalments, then no further instalments shall be made to TWM; 10.9.2 the amount of such costs, damages, demands, expenses, fines, liabilities, losses, penalties and all legal and other reasonable professional costs and expenses incurred by the Buyer as a result of a claim covered by clauses 10.2 or 10.4 does not exceed the amount of any outstanding instalments of the Handover Payment, the outstanding instalments shall be reduced accordingly. 10.9.3 Should the Buyer exercise its right under this clause 10.9 to set off any amount against the Handover Payment, it irrevocably and unconditionally waives its right to seek any further payment under clause 10.2 and/or 10.4 to the extent it has already set off such payment under clause 10.9. 11. TWM CONTRACTS 11.1 Subject to clause 11.2.3: 11.1.1 TWM hereby assigns, or undertakes to use all reasonable endeavours to procure the assignment of (as the case may be), the benefit of each TWM Contract to the Buyer, at and with effect from Completion; 11.1.2 after Completion, the Buyer shall:- (a) perform the relevant obligations under each TWM Contract in accordance with the terms of the TWM Contract; and (b) indemnify TWM against every loss, liability and cost which TWM may incur as a result of the Buyer's performance of relevant obligations under a TWM Contract to the extent that the loss, liability or cost is attributable to an act or omission of the Buyer after Completion (including any loss, liability or cost incurred as a result of defending or settling a claim alleging such a liability) and in each case, only to the extent that the terms of the relevant TWM Contract have been provided to the Buyer prior to the date hereof in writing; and 11.1.3 TWM shall indemnify the Buyer against every loss, liability and cost which the Buyer may incur as a result of TWM's performance of relevant obligations under a TWM Contract to the extent that the loss, liability or cost is attributable to an act or omission of TWM prior to Completion (including any loss, liability or cost incurred as a result of defending or settling a claim alleging such a liability). 11.2 If a TWM Contract cannot be assigned to the Buyer except by an agreement of novation with, or consent to the assignment from, one or more third parties:- 11.2.1 this Agreement does not constitute an assignment or attempted assignment of the TWM Contract; 21
11.2.2 TWM shall at the Buyer's request use all reasonable endeavours with the co-operation of the Buyer to procure such novation or consent; 11.2.3 subject to clause 11.2.4, unless and until the TWM Contract is novated or assigned with effect from Completion:- (a) TWM will hold the benefit of the TWM Contract, or will procure that such benefit is held, on trust for the Buyer and (so far as it lawfully may) at its own cost give all reasonable assistance to the Buyer to enable the Buyer to enjoy the benefits of the TWM Contract and to enforce its rights under it; and (b) the Buyer will perform the TWM Contract in accordance with its terms and conditions (to the extent that the terms of the relevant TWM Contract have been provided to the Buyer prior to the date hereof in writing) as sub-contractor to TWM or such other party as is holding the benefit of the relevant contract on trust for the Buyer (as the case may be); 11.2.4 if it is unlawful for TWM to hold, or to procure the holding of, the benefit of the Contract on trust for the Buyer and/or for the Buyer to perform the TWM Contract as sub-contractor to TWM:- (a) this Agreement does not constitute a declaration of trust over the TWM Contract and/or (as the case may be) the appointment or attempted appointment of a sub-contractor under the TWM Contract; and (b) TWM and the Buyer shall each (at the cost and expense of the Sellers) use all reasonable endeavours to do or procure to be done all such further acts and things and execute or procure the execution of all such other documents as may be necessary in order (as nearly as may be possible) to put TWM and the Buyer in the position in which they would have been had the benefit and burden of the TWM Contract passed to the Buyer on Completion in the manner contemplated by the preceding provisions of this clause 11. 12. COMPUTER CONTRACTS 12.1 The Buyer and TWG agree that nothing in this Agreement shall constitute an assignment or novation or an attempted assignment or novation of the Computer Contracts. 12.2 From Completion until the earlier of the expiry of the Subcontracting Period and the date on which the relevant Computer Contract is terminated or expires:- 12.2.1 TWG shall hold the benefit of each of the Computer Contracts not so terminated or expired on trust for the Buyer and (so far as it lawfully may) at the cost of the Buyer give all reasonable assistance to enable the Buyer to enjoy the benefit of the Computer Contracts; 12.2.2 the Buyer will perform all of TWG's obligations under the Computer Contracts not so terminated in accordance with their terms and conditions as sub-contractor to TWG. 22
12.3 The Buyer shall indemnify TWG against every loss, liability and cost which TWG may incur as a result of the Buyer's performance or non-performance of TWG's obligations under a Computer Contract to the extent that the loss, liability or cost is attributable to an act or omission of the Buyer from Completion (including any loss, liability or cost incurred as a result of defending or settling a claim alleging such a liability) until the end of the period referred to in clause 12.2. 12.4 The Buyer shall be responsible for the due and punctual payment of all sums payable by TWG under the Computer Contracts during the period referred to in clause 12.2 and shall pay all such sums to TWG, or to such other party as TWG may direct, within 7 days of receiving notification in writing from TWG of the nature and amount of any such sum without deduction or set-off. 12.5 Subject to clause 12.6, TWG shall use reasonable endeavours to ensure that the Computer Contracts are not terminated before the end of the period referred to in clause 12.2 or such other later date as may be agreed in writing between the Buyer and TWG. 12.6 The Buyer acknowledges that TWG wishes to wind down its operations as soon as reasonably practicable and that notice has already been given to terminate the ITEX contract and it will terminate on 1 September 2009. In the event that the Buyer does not require the benefit of any of the Computer Contracts until 31 August 2009, the Buyer shall give to the Sellers at least 30 days' notice that the Sellers may terminate the relevant Computer Contract and the Sellers shall give notice to terminate the relevant Computer Contract as soon as possible under the terms of that Computer Contract, but the Buyer shall in all circumstances remain liable to perform its obligations under clause 12.2.2 in respect of the ITEX contract until 1 July 2009 at the earliest. The Buyer agrees to hold TWG harmless against any additional cost (limited to the rental payment for the 30 day notice period for the relevant Computer Contract and which does not include any costs associated with termination of the ITEX contract) incurred by the Sellers by virtue of any such early termination and the Buyer shall cooperate with such early termination. Subject as aforesaid the Buyer acknowledges that TWG may, at its own cost, serve notice to terminate any or all of the Computer Contracts, such termination to occur on or after 31 August 2009 (unless a later date has been agreed pursuant to clause Subject to clause 12.6, TWG shall use reasonable endeavours to ensure that the Computer Contracts are not terminated before the end of the period referred to in clause 12.2 or such other later date as may be agreed in writing between the Buyer and TWG.), and that TWG shall bear no liability to the Buyer in respect of any consequences of the service of such notice. 12.7 Subject to clause 12.8 and except as otherwise specified in clause 12.6, TWG shall bear all costs and expenses incurred as a result of the termination of any of the Computer Contracts pursuant to the sending of a notice in accordance with clause 12.6. 12.8 TWG undertakes to use all reasonable endeavours to procure that the Buyer shall during the Subcontracting Period have the benefit of all services provided by Playtech under the Playtech Contract reasonably necessary for the conduct of the Businesses and the Buyer undertakes to indemnify TWG against all costs, charges and expenses incurred by TWG to third parties (which for the avoidance of doubt includes any costs, charges and expenses payable to Win Gaming and/or Playtech) in procuring the provision of such services by Playtech up to an aggregate total of US$70,000 in relation to each calendar month following Completion in respect of which such services are utilised. 23
13. PROTECTION OF THE BUYER'S INTERESTS 13.1 The Sellers covenant with the Buyer that they shall not directly or indirectly:- 1.1.1 until the expiration of twenty-four months from Completion, carry on or be engaged or interested in the business of running Challenge Jackpot or any similar roulette game using a live presenter and either a digitised, auto or live roulette wheel on behalf of VMTV; 13.1.1 until the expiration of nine months from Completion, carry on or be engaged or interested in the business of running Challenge Jackpot, or any similar roulette game using a live presenter and either a digitised, auto or live roulette wheel on behalf of any UK broadcaster other than VMTV; 13.1.2 until the expiration of twelve months from Completion, solicit or entice away or endeavour to solicit or entice away from the Buyer any person employed in Challenge Jackpot in an executive, technical, managerial or sales capacity at Completion with a view to inducing that person to leave his employment; 13.1.3 until the expiration of twelve months from Completion, employ any of the Employees, with the exception of the Key Individuals; or 13.1.4 use or register or attempt to register or allow any third party to use any name or style which includes the phrase "Challenge Jackpot" (including any domain name previously registered by either Seller) or any name (including a domain name) which is likely to cause a third party to believe that such a name is connected with Challenge Jackpot. 13.2 Each of the restrictions set out in clause 13.1 is separate and severable, shall be enforceable by the Buyer independently of each of the others and for the avoidance of doubt clause 13.4 shall apply to each of them. 13.3 The restrictions set out in clause 13.1 are considered reasonable by the parties and the Sellers acknowledge (having taken legal advice) that, in the light of the consideration paid or to become payable under this Agreement, the manner of its computation, the nature of Challenge Jackpot and all other relevant matters, clause 13.1 is necessary for the purpose of assuring to the Buyer the full benefit of Challenge Jackpot and for the protection of the proprietary and commercial interests of the Buyer. 13.4 If any provision of this Agreement shall be found by any court or body or authority of competent jurisdiction to be invalid or unenforceable, such provision shall be severed from the remainder of this Agreement, which shall remain in full force and effect to the extent permitted by law. 14. RESTRICTIONS ON TRANSFER OF CONSIDERATION SHARES 14.1 Subject to the provisions of clause 14.2, the Sellers undertake to the Buyer (in order to ensure an orderly market in the Buyer's shares) that they will not within 12 months of Completion Dispose of the legal or beneficial ownership of or any other interest in any Consideration Shares without the prior written consent of the Buyer. 14.2 The above undertaking shall not apply to a Disposal of Consideration Shares made:- 24
14.2.1 from a Seller to either IMAC or Win Gaming; 14.2.2 in acceptance of a general offer for the whole of the issued equity share capital of the Buyer (other than any equity share capital held by or committed to the offeror and/or persons acting in concert with the offeror) made in accordance with the City Code on Takeovers and Mergers or the provision of an irrevocable undertaking to accept such an offer; or 14.2.3 pursuant to any compromise or arrangement under Part 26 of the 2006 Act providing for the acquisition by any person (or group of persons acting in concert) of 50% or more of the equity share capital of the Buyer and which compromise or arrangement has been sanctioned by the courts; or 14.2.4 under any scheme of reconstruction under section 110 of the Insolvency Act 1986 in relation to the Buyer; or 14.2.5 a Disposal made pursuant to an offer by the Buyer to purchase its own shares which is made on identical terms to all holders of ordinary shares in the Buyer and otherwise complies with the Act, the 2006 Act and the AIM Rules; or 14.2.6 pursuant to an order of a court of competent jurisdiction requiring any Consideration Shares to be sold or transferred or a consent order which has the same effect. 14.3 No Permitted Disposal shall be allowed if it would represent a breach of the AIM Rules and all Permitted Disposals shall be effected through the Buyer's Nomad or Broker in such an orderly manner as the Nomad or Broker shall reasonably require, with a view to the maintenance of an orderly market in the shares of the Buyer. 14.4 TWG undertakes to the Buyer that it shall carry out any Disposal (other than a disposal carried out in accordance with clause 14.2) of Consideration Shares prior to the fourth anniversary of Completion through the Buyer's Nomad or Broker in such orderly manner as the Nomad or Broker shall reasonably require, with a view to the maintenance of an orderly market in the shares of the Buyer. 14.5 Win Gaming shall not be entitled to be issued with or have transferred to them any Consideration Shares unless and until Win Gaming has delivered to the Buyer an undertaking in the form previously supplied to Win Gaming by the Buyer's Solicitors undertaking not to carry out any Disposal (other than a disposal carried out in accordance with clause 14.2) of Consideration Shares prior to the first anniversary of Completion through the Buyer's Nomad or Broker in such orderly manner as the Nomad or Broker shall reasonably require, with a view to the maintenance of an orderly market in the shares of the Buyer and agreeing that any such Consideration Shares shall be held in an account with Panmure Gordon & Co (and subject to first complying with any reasonable KYC procedures of that firm). 15. ENTIRE AGREEMENT 15.1 This Agreement constitutes the entire agreement and understanding of the parties and supersede any previous agreement between the parties relating to the subject matter of this Agreement. 25
15.2 Nothing in this clause 15 shall operate to limit or exclude any liability for fraud. 16. MISCELLANEOUS 16.1 All notices, correspondence, information, orders or enquiries relating to the Employees, the Businesses or any of the Assets received by the Sellers on or after Completion shall immediately be forwarded to the Buyer. 16.2 TWG undertakes to the Buyer that it will immediately notify the interest of the Buyer in the Assets to the present insurer of the Assets and will keep in force existing insurance policies in respect of the Assets until:- 16.2.1 it receives written notice from the Buyer that it may cancel such policies; or 16.2.2 30 Business Days after Completion whichever is the sooner, provided that, for the avoidance of doubt, nothing in this Agreement shall oblige TWG to renew any such insurance policy beyond that period. 16.3 The following clauses shall survive termination of this Agreement: clause 1 (Interpretation), 15 (Entire Agreement), 19 (Fees and Expenses), 20 (Announcements), 21 (Assignment), 22 (Notices) and 26 (Governing Law and Jurisdiction). 17. THIRD PARTY RIGHTS 17.1 This Agreement does not create, confer or purport to confer any benefit or right enforceable by any person not a party to it. 17.2 Any amendment or variation of the terms of this Agreement or any document entered into or delivered in accordance with its provisions shall be effective if made or confirmed in writing and signed by the Sellers and the Buyer or the parties to such document and any other person's consent shall not be required for any such amendment or variation. 18. FURTHER ASSURANCE 18.1 The Sellers believe that all the rights and assets granted, assigned, held on trust, sold or transferred by them pursuant to the terms of this Agreement are sufficient to enable the Buyer to operate the Challenge Jackpot Business as at Completion. 18.2 The Sellers shall at their own expense execute and register or procure to be executed and registered all such deeds and documents and do all acts and things as the Buyer may reasonably require to give effect to this Agreement. 19. FEES AND EXPENSES Without prejudice to clause 2.3, each of the parties to this Agreement shall pay and bear its own costs of and incidental to the negotiation, preparation and execution of this Agreement or any document executed or to be delivered pursuant to it. 20. ANNOUNCEMENTS 20.1 Subject to clause 20.2, and except as required by law or by any regulatory body of competent jurisdiction, no communication concerning the transaction referred to in this Agreement or its terms shall be made or despatched by any party without the prior written consent of each of the other parties. 26
20.2 A party shall, if requested in writing by any other party, supply whatever information and reports concerning such party which may be required to comply with any applicable law or the regulations of any recognised investment exchange relating to any listing particulars, prospectus or circular to be published by it or any announcement required to be made in relation to this Agreement or any matters contemplated by it. 20.3 At or as soon as possible after Completion, the Sellers will co-operate with the Buyer's reasonable requests in despatching, at the Buyer's cost, notices in agreed form to the Employees and such other third parties as the Buyer may reasonably request informing them of the transfer of the Business. 21. ASSIGNMENT Each of the parties shall be entitled to assign any or all of its rights under this Agreement to any member of its group provided that if such assignee shall subsequently cease to be a member of its group then the relevant party shall procure that prior to such cessation that company will reassign its rights to the relevant party or to another member of the relevant party's group. 22. NOTICES 22.1 Any communication given under this Agreement shall be in writing and delivered personally or prepaid recorded, special delivery or first class post (or air mail post if to an address outside the United Kingdom) to the address of the party who is to receive such communication as set out in this Agreement or to such other address in the United Kingdom as may from time to time be specified in writing by the relevant party as its address for the purpose of this clause 22. 22.2 A communication shall be deemed to have been received:- 22.2.1 if delivered personally, at the time of delivery; 22.2.2 if sent by prepaid recorded, special delivery or first class post, on the second Business Day after the date of posting; and 22.2.3 if sent by prepaid air mail post, on the fifth Business Day from the date of posting. 22.3 Each party undertakes to notify the other parties in accordance with this clause 22 if the address specified in this clause 22 is no longer an appropriate address for the service of communications. 23. WAIVER 23.1 No failure to exercise or any delay in exercising any right or remedy by the Buyer under this Agreement shall operate as a waiver of it or of any other right or remedy under it. No single or partial exercise of any such right or remedy by the Buyer shall prevent any further or other exercise of it or the exercise of any other right or remedy. 27
23.2 The rights and remedies provided by this Agreement are cumulative and (unless otherwise provided in this Agreement) are not exclusive of any rights or remedies provided by law. 24. COUNTERPARTS This Agreement may be executed in counterparts by the parties, each of which when executed and delivered shall constitute an original, but which together shall constitute one and the same instrument. 25. INDEPENDENT EXPERT 25.1 Any Independent Expert to be appointed under this Agreement shall be nominated jointly by the Buyer and the Sellers or, in the absence of agreement within seven days of any such party becoming entitled to appoint an Independent Expert, to be nominated upon request by such party by the President (or, if he is not available, the next most senior officer) for the time being of the Institute of Chartered Accountants in England and Wales. 25.2 Any Independent Expert shall act as expert and not as an arbitrator and his decision shall be final and binding on the parties (in the absence of manifest error, in which case such error shall be rectified as soon as possible). 25.3 The costs of any Independent Expert shall be borne as he directs or, in the absence of such direction, equally by the Sellers on one hand and the Buyer on the other. 25.4 Any determination which is made by an Independent Expert under this Agreement shall be without liability on the part of such Independent Expert under other than for bad faith. 25.5 The Buyer and the Sellers shall give all such facilities and information and all reasonable assistance to the Independent Expert to enable him to make any determination required to be made by him under this Agreement and shall allow him access to any books, records or information relating to the subject matter of this Agreement held by any of them. 26. GOVERNING LAW AND JURISDICTION 26.1 This Agreement shall be governed by, and construed in accordance with, the laws of England and Wales. 26.2 Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to hear and determine any suit, action or proceedings and to settle any disputes which may arise out of or in connection with this Agreement (or any documents entered into in accordance with its provisions). IN WITNESS of which the parties have executed this Agreement as a deed on the date specified on page 1. 28
EXECUTED AS A DEED by NETPLAY TV PLC acting by a director, in the presence of:- /s/ ............................... Signature of witness Name: Address: Occupation: EXECUTED AS A DEED by TWO WAY GAMING LIMITED acting by a director, in the presence of:- /s/ ............................... Signature of witness Name: Address: Occupation: EXECUTED AS A DEED by TWO WAY MEDIA LIMITED acting by a director, in the presence of:- /s/ ............................... Signature of witness Name: Address: Occupation: * EXHIBITS AND SCHEDULES TO EXHIBIT 10.1 HAVE BEEN OMITTED AND WILL BE FILED WITH THE SECURITIES AND EXHCNAGE COMMISSION UPON REQUEST. 29
