AGREEMENT AMONG NEW MEDIA LOTTERY SERIVCES, INC. AND NEW MEDIA LOTTERY SERVICES, PLC. AND NEW MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED AND TRAFALGAR CAPITAL SPECIALISED INVESTMENT FUND FIS AND JOHN CARSON
Exhibit
10.46
AMONG
NEW MEDIA
LOTTERY SERIVCES, INC.
AND
NEW MEDIA
LOTTERY SERVICES, PLC.
AND
NEW MEDIA
LOTTERY SERVICES (INTERNATIONAL) LIMITED
AND
TRAFALGAR
CAPITAL SPECIALISED INVESTMENT FUND FIS
AND
XXXX
XXXXXX
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THIS
AGREEMENT dated as of March 11, 2010 (this “Agreement”), by and
among, New Media Lottery Services, Inc., a corporation formed under the laws of
the State of Delaware (the “Company”), New Media Lottery Services PLC, a
corporation formed under the laws of Ireland (“NMPLC”), New Media Lottery
Services (International), Limited, a corporation formed under the laws of
Ireland (“NMLTD”), Trafalgar Capital Specialised Investment Fund FIS
(“Trafalgar”) and Xxxx Xxxxxx, the President/Chief Executive Officer and a
director of the Company (“Xxxxxx”). The Company, NMPLC, MMLTD, Trafalgar and
Xxxxxx are referred to collectively herein as the “Parties”.
BACKGROUND
The
Company, through its direct and indirect subsidiaries, NMPLC and NMLTD, designs,
builds, implements, manages, hosts and supports Internet and wireless devise
based lottery programs. The Company desires to divest and transfer to NMLTD any
remaining technology, including but not limited to, software and methods
relating to the process and transacting game play, integrated tools to monitor
events, infrastructure consisting of servers residing in the United Kingdom, and
game library, now owned or hereinafter acquired that is not currently held as an
asset by NMLTD (the “Technology”). NMLTD desires to grant, assign and transfer
to Trafalgar a first priority security interest in the Technology. NMPLC and
NMLTD owe to the Company an approximate $6,300,000 as evidenced on the unaudited
financial statements for quarter ended October 31, 2009 (the “Debt”), which the
Company desires to waive and release NMPLC and NMLTD from any and all
obligations concerning the Debt. NMPLC owes Trafalgar €2,211,111 Euros in
principal and approximately €140,037 Euros in accrued interest (the “Trafalgar
Debt”), which NMPLC desires to transfer to the Company. NMPLC agrees to
guarantee the complete and full payment of the Trafalgar Debt regardless of how
the Trafalgar Debt shall become due, of all indebtedness owing by the Company to
Trafalgar. The Company and Trafalgar previously entered into that certain loan
facility restructuring agreement dated February 28, 2009 (the “Restructuring
Agreement”) and corresponding share pledge agreement dated March 24, 2009 (the
“Share Pledge Agreement”) pursuant to which Trafalgar retains a first priority
security interest in and to approximately 20,205,129 shares of NMPLC held of
record by the Company (the “Pledged Shares”). Under Section 8 of the Share
Pledge Agreement, the Company is deemed to be in default of the Share Pledge
Agreement and Trafalgar desires to execute its remedies as a secured creditor in
accordance with Section 9 of the Share Pledge Agreement by seizing title to the
Pledged Shares. Trafalgar desires to subsequently transfer the Pledged Shares to
Xxxxxx in exchange for the 87,714 shares of the Company held of record by Xxxxxx
(the “Company Shares”). The Company further desires to release any and all
security interests in and to the Technology and to further release NMPLC and
NMLTD from any and all claims relating to ownership of the Technology, now
existing or hereinafter developed, and to patents, contracts or any other assets
now existing or hereinafter developed. NMPLC desires to issue to Trafalgar an
aggregate of 100 shares of its preferred stock (the NMPLC “Preferred Stock”),
which rights and privileges of the NMPLC Preferred Stock include payment to
Trafalgar of a dividend in the aggregate amount $1 million. In the event that
NMPLC or NMLTD arranges potential financing with a third party, Trafalgar agrees
to negotiate in good faith to facilitate the closing of such financing and not
be “unreasonable” in its demands.
NOW,
THEREFORE, in consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties, intending to be legally bound, hereby agree as
follows.
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1. Basic
Transactions.
(a) Transfer of
Technology. On and subject to the terms and conditions of this
Agreement, the Company shall assign, transfer and deliver to NMLTD all of its
respective interest in and to the Technology, and waives any existing or future
claims to the Technology.
(b) Security
Interest. NMLTD agrees to grant, assign, transfer and set over
to Trafalgar a first priority security interest in all of NMLTD’s right, title
and interest in and to the Technology.
(c) Release of
Debt. On and subject to the terms and conditions of this
Agreement, the Company agrees to release and forever discharge NMPLC and NMLTD
from any and all claims, manner of actions, whether at law or in equity suits,
judgments, debts, liens, liabilities, demands, damages, and losses, fixed or
contingent, which it now has or may have hereafter, directly or indirectly,
relating to the Debt.
(d) Transfer and Assumption of
Trafalgar Debt and Guarantee of Payment. On and subject to the
terms and conditions of this Agreement, NMPLC shall transfer to the Company and
the Company shall assume the Trafalgar Debt. NMPLC hereby agrees to absolutely
and unconditionally guarantee the prompt complete and full payment when, due of
the Trafalgar Debt, and regardless of how such Trafalgar Debt shall become due,
of all indebtedness owing by the Company to Trafalgar, whether evidenced by any
note or other documentation. Trafalgar agrees to release NMPLC of
their guarantee in the event that the Company satisfies the Trafalgar Debt
through any means. In the event that NMPLC develops a public market
for its trading stock in the future, Trafalgar will convert its Preferred Stock
into common tradable stock at 80% of market trading price. Upon the consummation
of this agreement and after the transfer of the Trafalgar Debt to the Company,
Trafalgar agrees to release NMPLC and NMLTD from the Trafalgar
Debt. In so doing, Trafalgar will notify NMPLC, NMLTD and the proper
authorities of the satisfaction/cancellation of the convertible notes and
debentures and forfeit its warrants for the purchase of 4.5 million shares of
NMPLC common stock.
(e) Exercise of Remedies Under
the Share Pledge Agreement.
(i) On and subject to the
terms and conditions of this Agreement and in accordance with Section 9 of the
Share Pledge Agreement, Trafalgar shall exercise its remedies as a secured
creditor. The Company agrees to transfer to Trafalgar all of its right, title
and interest in and to the Pledged Shares.
(ii) In further accordance
with Section 9(b) of the Share Pledge Agreement, Trafalgar agrees to assign,
transfer and deliver all of the Pledged Shares to Xxxxxx.
(iii) In consideration
therefore, Xxxxxx agrees to transfer to Trafalgar an aggregate of 87,714 shares
of restricted common stock of the Company held of record (the “Company
Shares”).
(f) Issuance of NMPLC Preferred
Stock.
(i) Upon Closing of this
transaction, NMPLC agrees to issue to Trafalgar an aggregate of 100 shares of
Preferred Stock.
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(ii) Trafalgar as the record
holder of an aggregate of 100 shares of Preferred Stock shall be entitled to
receive, in preference to the holders of any other shares of capital stock of
NMPLC, quarterly cumulative dividends when and as if they may be declared by the
Board out of funds legally available therefore in the aggregate amount of $1
million (the “Dividends”). The Dividends shall accrue on the Preferred Stock
commencing on the date of original issuance thereof and continuing until
Trafalgar has received an aggregate of $1 million. Dividends shall only be paid
when NMPLC has reached cash flow positive and at such time, the dividend payment
will be equal to 5% of net revenue. For purposes of this Agreement, “cash flow
positive” shall mean when NMPLC is able to meet the insolvency test (i.e, when
NMPLC has sufficient funds in its cash account to meet its obligations as they
arise on a daily basis. For purposes of this Agreement, “net revenue” shall mean
the net revenue in U.S. Dollars derived by NMPLC from the sale of its products
(net of cost of goods sold, general and administrative expenses and taxes. The
Preferred Stock can be redeemed in a lump sum payment at the election of NMPLC.
The shares of Preferred Stock shall rank senior to any shares of common stock of
NMPLC or other securities of a class or series of stock of NMPLC the terms of
which do not expressly provide that it ranks senior to or on a parity with the
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Corporation.
(g) Release by Trafalgar.
Trafalgar agrees to release and any all security interests in all the assets,
including but not limited to the technology, cash, cash equivalents, inventory,
and contracts of NMPLC and NMLTD (collectively, the “Assets”). Simultaneously with the execution and
delivery of this Agreement, Trafalgar shall make, execute, acknowledge, file,
record and deliver to NMPLC
and NMLTD any documents
reasonably requested by NMPLC and NMLTD to release its security interest in the
Assets including, without limitation,
termination of financing statements, certificates,
local termination of
lien documents, affidavits
and forms as may, in Trafalgar’s reasonable judgment, be necessary to
effectuate and complete the release of any and all security
interests in the Assets.
(h) Resignations.
(i) Simultaneous with the Closing of
this transaction, Xxxxxx shall resign as the President/ChiefExecutive Officer
and a member of the Board of Directors of the Company. The Company and
Carsonshall agree to release each other and forever discharge any and all
claims, manner of actions, whether at law or in equity suits, judgments, debts,
liens, liabilities, demands, damages, losses, sums of money, expenses or
disputes, known or unknown, fixed or contingent, which it now has or may have
hereafter, directly or indirectly, individually or in any capacity against each
other, their successors and assigns, as well as its present or former owners,
directors, officers, stockholders, employees, agents, heirs, by reason of any
act, omission, matter, cause, or thing whatsoever, from the beginning of time
to, and including the date of the execution of this Agreement, relating to the
resignation.
(ii) Simultaneous with the Closing of
this transaction, Xxxx Xxxxxxxxx shall resign from the Board of Directors of
NMPLC. NMPLC and Xxxxxxxxx shall agree to release each other and forever
discharge any and all claims, manner of actions, whether at law or in equity
suits, judgments, debts, liens, liabilities, demands, damages, losses, sums of
money, expenses or disputes, known or unknown, fixed or contingent, which it now
has or may have hereafter, directly or indirectly, individually or in any
capacity against each other, their successors and assigns, as well as its
present or former owners, directors, officers, stockholders, employees, agents,
heirs, by reason of any act, omission, matter, cause, or thing whatsoever, from
the beginning of time to, and including the date of the execution of this
Agreement, relating to the resignation.
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(i) The
Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place through the offices of Trafalgar in
Florida before February ___, 2010 subject to the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Parties may mutually determine (the “Closing Dates”).
(j) Transfer of Technology and
Pledged Shares. The transfers of the Technology and the Pledged Shares
shall be in accordance with instructions delivered to the Parties from the
attorney for Trafalgar. In accordance with the terms and provisions of this
Agreement and simultaneous with execution of this Agreement, the Company shall
deliver to Trafalgar and Trafalgar shall deliver to Xxxxxx and Xxxxxx shall
deliver to Trafalgar the following: (i) all of the stock certificates
representing the Pledged Shares and the Company Shares, endorsed in blank and/or
accompanied by duly executed assignment documents and including a Medallion
Guarantee or such other assignments required by the transfer agent, including
corporate resolutions as required, (ii) the unaudited consolidated financial
statements of the Company as of quarter ended October 31, 2009 evidencing the
Trafalgar Debt; (iii) the unaudited consolidated financial statements of the
Company as of quarter ended October 31, 2009 evidencing the Debt; and (iv) a
removal of all liens and security interests filed by Trafalgar evidencing
release by Trafalgar of any and all security interests in the Assets excepting
the Technology as discussed in section 1(b).
2. Representations and
Warranties Concerning the Transaction.
(a) Representations and
Warranties of the Company. The Company represents and warrants
to the Parties that the statements contained in this paragraph 2(a) are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date.
(i) Organization of Company;
Subsidiaries. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Delaware. The Company is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction where such qualification is
required. The Company has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on its business. The Company has
one subsidiary, NMPLC, and one indirect subsidiary, NMLTD. NMLTD is a wholly
owned subsidiary of NMPLC.
(ii) Authorization of
Transaction. The Company has full power and authority to
execute and deliver this Agreement and to perform its respective obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Company, enforceable in accordance with its terms and
conditions. The Company does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
governmental authority in order to consummate the transactions contemplated by
this Agreement. The Company will need to file the appropriate documentation with
the SEC.
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(iii) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any governmental authority to which the Company is subject, or
(B) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a party or by
which it is bound or to which any of its assets is
subject.
(iv) Brokers'
Fees. The Company does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Company could become
liable or obligated.
(v) Ownership of
Technology. Notwithstanding that NMLTD holds title to substantially all
of its technology, the Company shall transfer to NMLTD any remaining interest
held by the Company in the Technology and NMLTD shall receive good and
marketable title to the Technology free and clear of all encumbrances except as
discussed in section 1(b).
(vi) Financial
Statements. The Company will provide to the Parties the
consolidated balance sheet and statements of income, changes in stockholders'
equity and cash flows as of and for the quarter ended October 31, 2009 (the
“Financial Statements”). The Financial Statements will be prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis, fairly present the financial condition, results of operations
and cash flows of the Company as of the respective dates thereof and for the
periods referred to therein and are consistent with the books and records of the
Company. The Financial Statements shall reflect the Debt and the Trafalgar
Debt.
(vii) Pledged
Shares. The Company is the record owner of the Pledged
Shares, and owns all the ownership, voting and other rights in the Pledged
Shares, free and clear of all claims, liens, pledges, options, security
interests, attachments, and encumbrances, except for those created under the
Share Pledge Agreement, and will warrant and defend Trafalgar’s security
interest in such Pledged Shares and all related collateral against the claims of
all persons whomsoever. The Company has full power, right and is authorized to
transfer the Pledged Shares to Trafalgar in accordance with the election by
Trafalgar of its remedies under the Share Pledge Agreement.
(b) Representations and
Warranties of NMPLC. NMPLC represents and warrants to the
Parties that the statements contained in this paragraph 2(b) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date.
(i) Organization of
NMPLC. NMPLC is a corporation duly organized, validly
existing, and is not in good standing under the laws of Ireland and is a
subsidiary of the Company. NMPLC is duly authorized to conduct business under
the laws of each jurisdiction where such qualification is required. NMPLC has
full corporate power and authority and all licenses, permits, and authorizations
necessary to carry on its business.
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(ii) Authorization of
Transaction. NMPLC has full power and authority to execute and
deliver this Agreement and to perform its respective obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of NMPLC,
enforceable in accordance with its terms and conditions. NMPLC does
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any governmental authority in order to
consummate the transactions contemplated by this Agreement.
(iii)
Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any governmental authority to which NMPLC is subject, or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which NMPLC is a party or by which
it is bound or to which any of its assets is subject.
(iv) Brokers’
Fees. The Company does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Company could become
liable or obligated.
(v) Preferred
Shares. NMPLC has full authorization to issue the 100 shares
of Preferred Stock to Trafalgar, and the Board of Directors has authorized and
approved the creation and associated rights and preferences regarding the shares
of Preferred Stock. The appropriate documentation has or will be filed with the
governing regulatory bodies in Ireland formally creating the shares of Preferred
Stock. In the event that notice to the shareholders of NMPLC is required to
issue the Preferred Shares to Trafalgar, NMPLC shall use its best efforts to
provide such shareholder approval diligently and expeditiously.
(vi) Capitalization. Restrictive
Agreement. NMPLC’s authorized capital stock, as of the date of this
Agreement, consists of 150 million shares of Common Stock, .001 par value, of
which 25,184,350 shares are issued and outstanding. There are no other forms of
equity securities or debt instruments which could convert to equity securities
which are authorized, issued or outstanding [excepting the Trafalgar convertible
notes which are to be transferred according to 1(d) above]. No other
form of equity or debt is authorized, issued or outstanding. All of
the issued and outstanding shares of common stock are validly issued, fully paid
and non-assessable and have been issued in compliance with applicable laws,
including, without limitation, applicable federal and state securities
laws. Trafalgar shall forfeit its warrants for the purchase of 4.5
million shares such that there are outstanding options and warrants to acquire
additional shares of capital stock of NMPLC, in the amount of 1,035,000
shares. There are no agreements relating to the voting, purchase or
sale of capital stock between or among NMPLC and any of its stockholders or
other third party. No equity financings resulting in the issuance of further
shares nor any further debt financings will be authorized by NMPLC of any nature
or description either prior to or subsequent to the execution of this Agreement
without the prior written consent of Trafalgar, which covenant shall remain in
full force and effect until the Trafalgar Debt is fully paid and Trafalgar has
realized an aggregate of $1 million in payment of Dividends.
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(c) Representations and
Warranties of NMLTD. NMLTD represents and warrants to the
Parties that the statements contained in this paragraph 2(c) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date.
(i) Organization of
NMLTD. NMLTD is a corporation duly organized, validly
existing, and is not in good standing under the laws of Ireland and is a
subsidiary of the Company. NMLTD is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction where such qualification is
required. NMLTD has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on its
business.
(ii) Authorization of
Transaction. NMLTD has full power and authority to execute and
deliver this Agreement and to perform its respective obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of NMLTD,
enforceable in accordance with its terms and conditions. NMLTD does
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any governmental authority in order to
consummate the transactions contemplated by this Agreement.
(iii) Security Interest.
After consummation of this Agreement and the transfer by the Company to
NMLTD of its remaining interest, title and right in and to the Technology, NMLTD
shall hold title to the Technology, free and clear of all claims, liens,
pledges, options, security interests, attachments and encumbrances, except for
that to be created on behalf of Trafalgar. NMLTD shall execute and deliver any
documentation required under the laws of Ireland to create a security interest
in and to the Technology on behalf of Trafalgar (the “Trafalgar Security
Documents”, and has the full power, right and authority to execute, deliver and
perform the pledge, assignment, transfer and grant of the security interest to
be set forth in the Trafalgar Security Documents.
(iv) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any governmental authority to which NMLTD is subject, or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which NMLTD is a party or by which
it is bound or to which any of its assets is subject.
(v) Brokers’
Fees. NMLTD does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which NMLTD could become liable
or obligated.
(d) Representations and
Warranties of Xxxxxx. Xxxxxx represents and warrants to the
Parties that the statements contained in this paragraph 2(d) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date.
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(i) Authorization of
Transaction. Xxxxxx has full power and authority to execute
and deliver this Agreement and to perform his respective obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of Xxxxxx,
enforceable in accordance with its terms and conditions. Xxxxxx does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any governmental authority in order to consummate the
transactions contemplated by this Agreement.
(ii) Company Shares.
Xxxxxx is the record owner of the Company Shares, and owns all the
ownership, voting and other rights in the Company Shares, free and clear of all
claims, liens, pledges, options, security interests, attachments, and
encumbrances. Xxxxxx has full power, right and is authorized to transfer the
Company Shares to Trafalgar.
(e) Representations and
Warranties of Trafalgar. Trafalgar represents and warrants to
the Parties that the statements contained in this paragraph 2(e) are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date.
(i) Authorization of
Transaction. Trafalgar has full power and authority to execute
and deliver this Agreement and to perform its respective obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of
Trafalgar, enforceable in accordance with its terms and
conditions. Trafalgar does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
governmental authority in order to consummate the transactions contemplated by
this Agreement.
(ii) Non-contravention. Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any governmental authority to which Trafalgar is subject, or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which Trafalgar is a party or by which
it is bound or to which any of its assets is subject.
(iii) Secured
Party. Trafalgar is a party to the Share Pledge Agreement
pursuant to which the Company granted, assigned and transferred to Trafalgar a
first priority security interest in all of the Company’s Pledged Shares.
Trafalgar deems that an Event of Default has occurred under the Share Pledge
Agreement and has the right to exercise its remedies under the Share Pledge
Agreement in accordance with Section 9. Trafalgar further has the
right in any commercially reasonable manner to sell, resell, assign, transfer
and deliver all or any part of the Pledged Shares. Upon transfer of the Pledged
Shares from the Company to Trafalgar, Trafalgar shall transfer the Pledged
Shares to Xxxxxx.
(iv)
Fundraising. In
the event that NMPLC or NMLTD arranges potential financing with a third party,
Trafalgar agrees to negotiate in good faith to facilitate the closing of such
financing and not be “unreasonable” in its demands.
(v) Release of Security
Interest. Upon the payment of $1 million in aggregate
dividends by NMPLC, Trafalgar shall make, execute, acknowledge, file,
record and deliver to NMPLC
and NMLTD any documents
reasonably requested by NMPLC and NMLTD to release its security interest in the
Technology including, without limitation,
termination of financing statements, certificates,
local termination of
lien documents, affidavits
and forms as may, in NMPLC’s reasonable judgment, be necessary to
effectuate and complete the release of any and all security
interests in the Technology.
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3. Post-Closing
Covenants. The Parties agree as follows with respect to the
period following the Closing.
(a) General. In
case at any time after the Closing any further action is necessary or desirable
to carry out the purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such further instruments
and documents) as any other Party may request, all at the sole cost and expense
of the requesting Party (unless the requesting Party is entitled to
indemnification therefore under Section 7 below). The Company acknowledges and
agrees that from and after the Closing Trafalgar will be entitled to possession
of certain documents, books, records, agreements, and financial data of any sort
relating to the Company, NMPLC and NMLTD, and the parties agree to fully
cooperate in the delivery of any and all books, accounts, records, corporate
documents and all similar such items at the expense of the
Company
(b) Transition. Trafalgar
will not take any action that is designed or intended to have the effect of
impairing the Company’s legal or regulatory status pending, at or after the
Closing.
4. Remedies for Breaches of
This Agreement.
(a) Survival of Representations
and Warranties.
All of
the representations and warranties of the Parties shall survive the Closing
hereunder and continue in full force and effect for a period of one year
thereafter.
(b) Indemnification Provisions
for Benefit of Trafalgar.
(i) In
the event the Company, NMPLC or NMLTD breaches any of their representations,
warranties, and covenants contained herein, then the Company, NMPLC and NMLTD
shall indemnify Trafalgar from and against any adverse consequences that
Trafalgar may suffer through and after the date of the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).
(ii) In
the event Trafalgar breaches any of its representations, warranties, and
covenants contained herein, then Trafalgar shall indemnify each of the Company,
NMPLC and NMLTD from and against the entirety of any adverse consequences that
the Company, NMPLC or NMLTD may suffer through and after the date of the claim
for indemnification resulting from, arising out of, relating to, in the nature
of, or caused by the breach (or the alleged breach).
5. Miscellaneous.
(a) Press Releases and Public
Announcements. No Party shall issue any press release or make
any public announcement relating to the subject matter of this Agreement without
the prior written approval of the other Parties, provided, however,
that the Company may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the Company will use its best efforts
to advise the other Parties prior to making the disclosure).
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(b) No Third-Party
Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
(c) Succession and
Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any
of his or its rights, interests, or obligations hereunder without the prior
written approval of the other Parties; provided, however,
that the Parties may assign any or all of its rights and interests hereunder in
accordance with the terms of this Agreement.
(d) Counterparts; Facsimile
Execution. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. Facsimile
execution of this Agreement shall be legal, valid and binding for all
purposes.
(e) Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(f) Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
(g) Amendments and
Waivers. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the
Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(h) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
(i) Construction. The
Parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state or local statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty,
or covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty, or covenant.
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(j) Specific
Performance. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.
[signature
pages follow]
A-12
IN
WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the
date first above written.
| NEW MEDIA LOTTERY SERVICES INC. | |||
|
Date:
February __, 2010
|
By:
|
||
| President | |||
| NEW MEDIA LOTTERY SERVICES PLC. | |||
|
Date:
February __, 2010
|
By:
|
||
| President | |||
|
NEW
MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED
|
|||
|
Date:
February __, 2010
|
By:
|
||
| President | |||
| TRAFALGAR CAPITAL SPECIALISED INVESTMENT FUND FIS | |||
|
Date:
February __, 2010
|
By:
|
||
| President | |||
| Date: February __, 2010 | |||
| Xxxx Xxxxxx | |||
A-13
