ASSET PURCHASE AND ASSUMPTION OF LIABILITIES AGREEMENT
Exhibit
10-17
This
ASSET PURCHASE AND ASSUMPTION OF LIABILITIES AGREEMENT (this "Agreement")
is
entered into this 13th day of March, 2006, by and between NEW MEDIA LOTTERY
SERVICES, INC., a Delaware corporation ("NMLS"
or the “Company”)),
and
NEW MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED, an Irish limited company
("LTD
").
W
I T N E
S S E T H:
WHEREAS,
LTD is a wholly owned subsidiary of New Media Lottery Services plc, an Irish
corporation (“PLC”),
all of
the outstanding shares of which are owned by NMLS; and
WHEREAS,
PLC has engaged Xxxxxxxxx Xxxxx International Ltd. (“ZAI”) to serve as its lead
financial advisor and broker to sponsor PLC’s entire outstanding share capital
for admission to trade on the AIM Market operated by the London Stock Exchange
(“AIM”)
pursuant to an agreement between the parties dated September 22, 2005 (the
“Engagement Letter”); and
WHEREAS,
in furtherance of the admission of PLC’s share capital to AIM, NMLS desires to
sell, transfer and assign to LTD, effective upon the date on which PLC’s common
shares are admitted for trading on the AIM (the “Admission Date”), the assets
and liabilities described herein, all as more fully described and catalogued
on
the List of Assets attached hereto as Exhibit 1.01 (the "Assets"),
and
the List of Liabilities and Obligations Transferred to and Assumed by LTD
attached hereto as Exhibit 1.02; and
WHEREAS,
simultaneous herewith, the parties are entering into a Technology License
Agreement
whereby NMLS agrees to license to LTD certain specified intellectual property
which it owns or has the right to use as of the Admission Date, on the terms
and
subject to the conditions provided therein, including all copyrights; patents;
patent applications; proprietary rights, including any trademarks, trade
secrets, service marks, rights in designs, trade or business names; technology,
including any information, know-how, experience and records, including all
formulas, designs, specifications, drawings, data, documents, manuals and
instructions and all technical or other expertise and all computer software
and
computer programmes including, without limitation, both object code and source
code, and records, technology, processes and methodologies relating to the
business of NMLS or as carried on at any time up to the date of the License
Agreement and developed by or for NMLS (the “Intellectual Property”); and
WHEREAS,
upon the Admission Date and the closing of the sale, transfer and assignment
of
the Assets pursuant hereto and the license of the Intellectual Property pursuant
to the License Agreement, LTD will posses or have the right to use all of
those
assets necessary and required for it to operate the business of NMLS
substantially in the manner in which NMLS has operated its business prior
to the
Closing Date (as defined herein);
WHEREAS,
LTD desires to purchase and acquire the Assets enumerated in Schedule 1.01
and
agrees to become liable to pay, perform, discharge and satisfy those liabilities
transferred hereby and assume, pay, perform, observe and discharge in accordance
with the respective terms thereof, all of the Company’s obligations, duties,
commitments and liabilities under each and every agreement assigned by the
Company to LTD hereunder, as more fully described in, and subject to, Exhibit
1.02, as may be adjusted on the Closing Date, (collectively, the “Liabilities
and Obligations”).
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending
to be
legally bound, agree as follows:
ARTICLE
I
TRANSFER
AND SALE OF ASSETS
SECTION
1.01. Transfer,
Assignment and Sale of Assets by NMLS to LTD.
On the
terms and subject to the conditions of this Agreement, on the Closing Date
(as
hereafter defined), NMLS shall sell, transfer, assign and deliver to LTD,
subject, in the case of the Alladdin Agreement (as defined in Section 2.05(a)),
to the receipt of consent from Alladdin Lotteries Limited and Alladdin Limited
to the assignment of said agreement and the benefits and properties acquired
thereunder and as may have been further developed, by the Company thereunder,
and LTD shall receive from NMLS, the Assets, as may be adjusted on the Closing
Date.
SECTION
1.02. Consideration
for the Assets.
In
consideration for the purchase and sale of the Assets, upon the terms and
subject to the conditions set forth in this Agreement, on the Closing Date,
LTD
shall deliver to NMLS an executed Instrument of Assumption in the form attached
hereto as Exhibit 1.03 (the “Instrument
of Assumption”).
SECTION
1.03. Assumption
of and Covenant to Satisfy Certain Liabilities and Obligations by
LTD.
On and
as of the close of business on the Closing Date, LTD shall assume, and satisfy
and be liable for paying, performing and discharging the Liabilities and
Obligations and will deliver the Instrument of Assumption in favor of
NMLS.
SECTION
1.04. LTD
Indemnification of NMLS.
LTD
covenants and agrees to defend, indemnify and hold harmless NMLS (and its
successors-in-interest), its stockholders, officers, directors, employees,
agents, advisers, representatives and affiliates, and their respective heirs,
successor and assigns (collectively, the "NMLS
Indemnitees")
from
and against, and shall pay or reimburse NMLS Indemnitees for, any and all
actions, causes of actions, suits, debts, losses, charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, and
expenses (including attorney fees and costs actually incurred), of any nature
whatsoever, in law or equity (collectively "Claims"),
which
arise out of or are related to the Liabilities and Obligations, regardless
of
whether known or unknown or incurred before or after the Closing Date, all
as
more fully described in and subject to the provisions of that certain Indemnity
Agreement attached hereto as Exhibit 1.04 (the “Indemnity
Agreement”).
2
SECTION
1.05. Closing.
The
closing of the transactions contemplated hereby (the "Closing")
shall
occur at such time and place as the parties shall mutually agree promptly
after
the satisfaction of the condition set forth in ARTICLE VI hereof (said date
being herein referred to as the "Closing
Date").
(a)
At
the Closing, NMLS will deliver to LTD (i) to the extent requested by LTD,
assignments of all trade names and assumed names; (ii) assignments of all
the
agreements being transferred hereby listed in Schedule 1.01(b) (iii) all
documents of title necessary to transfer ownership to LTD of the Assets;
and
(iv) all other previously undelivered documents required to be delivered
by NMLS
to LTD at or prior to the Closing in connec-tion with the transactions
contemplated by this Agreement.
(b)
At
the Closing, LTD will deliver to NMLS (i) a duly executed Instru-ment of
Assump-tion; (ii) a duly executed Indemnity Agreement; and (iii) all previously
undelivered documents required to be delivered by LTD to NMLS at or prior
to the
Closing.
SECTION
1.06. Further
Assurances.
At any
time and from time to time after the Closing Date, at the request of any
party
hereto and without further consideration, NMLS and LTD shall execute and
deliver
such other instruments of sale, transfer, assignment and confirmation as
may be
reasonably requested in order more effectively to sell, transfer, and assign
to
LTD and to confirm LTD’s title to the Assets and LTD’s obligations with respect
to the Liabilities.
ARTICLE
II
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF NMLS
NMLS
represents and warrants to LTD as follows:
SECTION
2.01. Organization
and Qualification.
NMLS is
a corporation duly
organized,
validly existing and in good standing under the laws of State of Delaware
and is
duly licensed or qualified to transact business as a foreign corporation
in the
State of Virginia and is in good standing in the State of Virginia.
SECTION
2.02. Corporate
Power and Authority.
NMLS
has the corporate power and authority to own and hold its properties and
to
carry on its business. NMLS has the corporate power and authority to execute,
deliver and perform this Agreement and the other documents and instruments
contemplated hereby and thereby (collectively, the “NMLS Transaction
Documents”). The execution, delivery and performance of the NMLS Transaction
Documents have been duly authorized and approved by NMLS. This Agreement
and
each of the other agreements, documents and instruments to be executed and
delivered by NMLS have been duly executed and delivered by, and constitute
the
legal, valid and binding obligation of, NMLS enforceable against NMLS in
accordance with their terms.
SECTION
2.03. Validity,
Etc.
Neither
the execution and delivery of the NMLS Transaction Documents, the consummation
of the transactions contemplated hereby or thereby nor the performance of
its
obligations under the NMLS Transaction Documents will (i) violate, conflict
with
or result in any breach of any trust agreement, certificate of incorporation,
bylaw, judgment, decree, order, statute or regulation applicable to NMLS,
(ii)
require any consent, approval, authorization or permit of, or filing with
or
notification to, any governmental or regulatory authority, except for certain
notification filings to be made with the Securities and Exchange Commission
after the Closing Date, or (iii) violate, conflict with or result in a breach,
default or termination of, or give rise to any right of termination,
cancellation or acceleration of the maturity of any payment date of, any
of the
obligations of NMLS.
3
SECTION
2.04. Ownership
of Assets.
NMLS
has good, valid and market-able title to all the Assets and has the power
and
authority, subject, in one case, as specified in Exhibit 1.01(b), to the
receipt
of written consent from a third party to transfer its rights under that certain
agreement specified in Exhibit 1.01(b), to transfer the Assets as contemplated
hereby.
SECTION
2.05. Covenants
of NMLS.
NMLS
hereby covenants to and agrees with LTD as follows:
(a)
Agreement
to Obtain Consents to Assignment of Alladdin Limited Agreement.
NMLS
shall, after the date hereof, (i) take all such action and do all such things
as
may be necessary to procure the consent of each of Alladdin Limited and Alladdin
Lotteries Limited to the assignment and transfer of the agreement among the
parties dated May 6, 2005 (the “Alladdin Agreement”) to LTD, and (ii) take any
other act which LTD may reasonable request to effectively transfer and assign
the Alladdin Agreement to LTD.
(b)
Retention
by NMLS of Benefits Derived from Alladdin Agreement in Trust for
LTD.
To the
extent that NMLS realizes or receives any revenue or any other benefit of
any
kind from or as a result of the Alladdin Agreement prior to the transfer
and
assignment thereof to LTD as required in Section 2.05(a), above, NMLS shall
hold
all such revenues or benefits in trust for the benefit of LTD and shall promptly
transfer to LTD, for no additional consideration, the revenues or other benefits
received.
(c)
Decisions
Under Alladdin Agreement.
To the
extent any decisions of any nature are required to be made in connection
with
the Alladdin Agreement prior to its transfer to LTD, NMLS shall refer all
such
decisions to LTD in writing and shall permit a representative of LTD to discuss
any issue requiring a decision with the third party. NMLS shall not take
any
action with respect to the Alladdin Agreement without the advice of LTD.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF LTD
LTD
represents and warrants to NMLS as follows:
SECTION
3.01. Organization.
LTD is
duly organized, validly existing and in good standing under the laws of the
Republic of Ireland.
SECTION
3.02. LTD
Power and Authority.
LTD has
the corporate power and authority to execute, deliver and perform this
Agreement, the Indemnity Agreement, the Instrument of Assumption and the
other
documents and instruments contemplated hereby and thereby (collectively the
“LTD
Transaction Documents”). The execution, delivery and performance of the LTD
Transaction Documents have been duly authorized and approved by LTD. This
Agreement and each of the other agreements, documents and instruments to
be
executed and delivered by LTD have been duly executed and delivered by, and
constitute the valid and binding obligation of LTD enforceable against LTD
in
accordance with their terms.
4
SECTION
3.03. Validity,
Etc.
Neither
the execution and delivery of the LTD Transaction Documents, the consummation
of
the transactions contemplated hereby or thereby, nor the performance of its
obligations under the LTD Transaction Documents will (i) conflict with or
result
in any breach of any trust agreement, certificate of organization, bylaw,
judgment,
decree,
order, statute or regulation applicable to LTD (ii) require any consent,
approval, authorization or permit of, or filing with or notification to,
any
governmental or regulatory authority, (iii) result in a breach of or default
(or
give rise to any right of termination, cancellation or acceleration) under
any
law, rule or regulation or any judgment, decree, order, governmental permit,
license or order or any of the terms, conditions or provisions of any mortgage,
indenture, note, license, agreement or other instrument to which LTD is a
party
or (v) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to LTD.
ARTICLE
IV
FORWARD
COMMUNICATIONS
SECTION
4.01. Forward
Communications.
Any
written communication received at
any
time by NMLS with respect to any of the Assets or Liabilities shall be
transmitted by NMLS to LTD promptly upon receipt.
ARTICLE
V
CONDITION
TO SALE OF ASSETS
SECTION
5.01. Sale
and Completion of Admission.
Each
and every obligation of the parties under this Agreement, shall be sub-ject
to
The London Stock Exchange plc having unconditionally agreed to the admission
of
the entire issued ordinary share capital of New Media Lottery Services plc
to
trading on AIM becoming effective in accordance with the AIM Rules.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
SECTION
6.01. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.
SECTION
6.02. Governing
Law.
This
Agreement and the legal relations among the parties hereto shall be governed
by
and con-strued in accordance with the laws of the State of Delaware, with-out
regard to its conflicts of law doctrine.
5
SECTION
6.03. Execution.
This
Agreement may be executed in two or more counterparts, all of which when
taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered
to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) with the
same
force and effect as if such facsimile signature page were an original
thereof.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOLLOWS
6
IN
WITNESS WHEREOF, New Media Lottery Services, Inc. and New Media Lottery Services
(International) Limited have each executed this Asset Purchase and Assumption
of
Liabilities Agreement as of the day and year first above written.
|
NEW
MEDIA LOTTERY SERVICES, INC.
a
Delaware corporation
|
|
|
Attest:
___________________
|
By:______________________
|
PRESENT
WHEN THE COMMON SEAL
of
NEW
MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED
was
affixed hereto:
7
EXHIBITS
1.01
List
of Assets
1.02
List
of Liabilities
1.03
Instrument of Assumption
1.04
Indemnity Agreement
8
LIST
OF ASSETS
(a) (i) Assets
to
be transferred and assigned effective as of the Closing Date:
(A)
Notes
Receivable (including interest through 1/31/06): $63,175
New
Media
Lottery Serviços de Internet Ltda., a
corporation
organized under Brazilian law.
(B)
Furniture & Equipment: $47,521.21
Includes
all furniture and equipment owned by NMLS.
(C) The
name
“New Media Lottery Services” and any derivations thereof or trade names
associated therewith.
(b) (i) Contracts
assigned to LTD effective as of Closing Date:
(A)
Las
Vegas Gaming, Inc. dated November 22, 2005.
(B)
Parlay Entertainment Limited agreement dated June 7, 2005.
(C)
ROK
Corporation agreement dated December 7, 2004.
(D)
Guatemalan Paediatric Foundation agreement dated November 22, 2005.
(E)
Quotaholders’
Agreement
with
Cybercyte
Sistemas dated
June
22, 2005.
(ii) Contract
to be assigned effective upon receipt of consent of Alladdin Lotteries Limited
and Alladdin Limited:
(A)
Agreement dated May 6, 2005 by and among the Company, Alladdin Lotteries
Limited
and Alladdin Lotteries (“Alladdin Agreement”) will be transferred and assigned
upon the consent of Alladdin Lotteries Limited and Alladdin Lotteries to
such
assignment.
9
EXHIBIT
1.02
LIST
OF LIABILITIES AND OBLIGATIONS
TRANSFERRED
TO AND ASSUMED BY LTD
(a)
The
following liabilities are being transferred to and assumed by LTD as of the
Closing Date:
(i)
Deferred Compensation owed to management: $100,000
See
Schedule 1.02(a)(i) for a list of deferred compensation.
(ii)
Accounts Payable: $10,696.21
See
Schedule 1.02(a)(ii) for a list of accounts payables.
(b)
Contracts under which LTD is assuming all liabilities, obligations and duties
of
the Company as of the Closing Date:
(i)
Las
Vegas Gaming, Inc. dated May 14, 2005.
(ii)
Parlay Entertainment Limited agreement dated June 7, 2005.
(iii)
ROK
Corporation agreement dated December 7, 2004.
(iv)
Guatemalan Paediatric Foundation agreement dated November 22, 2005.
(v)
Quotaholders’
Agreement
with
Cybercyte
Sistemas dated
June
22, 2005.
(c)
Obligations under the Alladdin Agreement.
(i)
LTD
shall not assume or otherwise be responsible for any of the Company’s
obligations or liabilities under the Alladdin Agreement until the date on
which
Alladdin Lotteries Limited and Alladdin Limited consent to the assignment
thereof; provided, however that at no time shall LTD assume or be liable
for the
Company’s obligation to issue capital stock under the Alladdin
Agreement.
10
EXHIBIT
1.03
INSTRUMENT
OF ASSUMPTION
11
EXHIBIT
1.04
INDEMNITY
AGREEMENT
12
SCHEDULE
1.02(a)(i)
DEFERRED
COMPENSATION
Xxxxxxxx
Xxxxxxxx $100,000
13
SCHEDULE
1.02(a)(ii)
ACCOUNTS
PAYABLE
Ruffa
& Ruffa, P.C. $10,696.21
14
