EXHIBIT 2
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (the "Agreement") is
entered into this 26 day of November 2001, by and between SNAP2 Corporation, a
Nevada corporation with its principal place of business at 00000 Xxxxxx Xxxxx,
Xxxxxxxxx Xxxx, ("XXXX0"), ISES Canada Incorporated, a Canadian corporation
organized under the laws of the Province of Ontario and a wholly-owned
subsidiary of SNAP2 ("ISES"), (SNAP2 and ISES being referred to herein
collectively as "Seller"), and Inflight Digital Limited, a company incorporated
under the laws of England and Wales with its principal office located at 00
Xxxxx Xxxxxx, Xxxxxxxxxx Xxxx Xxxxxx, X.X. ("Buyer").
RECITALS:
A. WHEREAS, Seller is a software product developer and service provider for
embedded systems, including but not limited to in-flight entertainment systems
for passenger aircraft ("IFE") and Seller owns, leases or is a licensee for the
tangible and intangible property used in connection with its IFE business.
B. WHEREAS, Seller desires to sell to Buyer, and Buyer desires to buy from
Seller, certain of the IFE Assets (as hereinafter defined) comprising the
material part of Seller's IFE business, all subject to the terms and conditions
set forth herein.
C. WHEREAS this Agreement is the amended and restated Asset Purchase
Agreement, which represents the entire agreement between the parties and
supersedes in its entirety the Asset Purchase Agreement by and among the parties
hereto dated September 6, 2001 and filed with the Securities and Exchange
Commission as an exhibit to Seller's current report on Form 8-K on September 21,
2001.
In consideration of the foregoing and of the mutual representations,
warranties, covenants, and agreements and upon the terms and subject to the
conditions hereinafter set forth, the parties agree as follows:
ARTICLE I
TERMS OF PURCHASE AND SALE
1.1 Purchase and Sale of IFE Assets.
Subject to the terms and conditions hereof and in reliance upon the
representations, warranties and agreements contained herein, Seller will sell to
Buyer, and Buyer will purchase from Seller, at the Closing (as defined in
Section 8.1), all personal assets, rights, benefits and privileges, both
tangible and intangible, wherever located, owned, leased, licensed, used or held
for use by Seller in connection with Seller's IFE business and operations,
except as otherwise specifically provided herein (collectively, the "IFE
Assets"), free and clear of any and all options, pledges, mortgages, security
interests, liens, charges, burdens and other encumbrances or adverse claims
whatsoever ("Encumbrances").
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The IFE Assets shall include, without limitation, all of Seller's right,
title and interest in, to and under the following:
(a) All of Seller's rights and obligations under contracts with airline
operators for the provision of IFE products and services existing as
of the Closing Date, (the "IFE Contracts"), as the same are
exhaustively included in the following contracts as at the date of
this Agreement or as shall be added by notice in writing by Seller to
Buyer and accepted by Buyer as at the Closing Date:
AOM / Air Liberte
Delta Air Lines
Lan Chile
Qantas
Aer Lingus
TAM Linhas Aereas S.A.
(b) All of Seller's rights and obligations under license and distribution
agreements relating to its IFE business existing as of the Closing
Date (the "License and Distribution Agreements"), as the same are
exhaustively included in the following contracts: (i) the Tetris
Company, L.L.C.; and (ii) Lonely Planet Publications;
(c) A perpetual, royalty-free, exclusive world-wide license to use for IFE
business subsequent to the Closing Date, Seller's intangible
properties and rights relating to Seller's IFE business, wherever
located and whether or not described or referred to herein, including
without limitation all of the service marks, copyrights, franchise,
software, licenses, trademarks, trade names, patents, jingles,
slogans, logos, publishing rights and other similar intangible assets
(including disclosure of know-how) maintained, owned, used, held for
use or otherwise held by Seller in connection with its IFE business
(including any and all applications, registrations, extensions,
renewals and rights to xxx for past infringements relating thereto)
and all of the rights, benefits and privileges associated therewith
(the "Intellectual Property") including, but not limited to, the
assets listed in Schedule 3.7, (with the exception of all software
files relating to the game known as "Mr. Sneaky" ("Mr. Sneaky") which
are provided for the limited purpose of permitting Buyer to support
those IFE customers, if any, utilizing such game until expiration of
the current agreement with respect thereto) all related source code
and documentation, constituting the IFE Business trademarked as the
"Airsoft Travel Kit" (a/k/a "SNAP2 Travel Kit") with the right to
develop, modify and adapt the same for use in the IFE Business (and
Buyer shall own absolutely all the rights arising out of such
development, modification or adaptation), and further with the right
to test, sell or otherwise distribute IFE products incorporating or
created using any of the Intellectual Property and to integrate such
products into other IFE products. Such license shall extend to
Seller's intangible properties and rights relating to (including all
Intellectual Property in) the four additional games to be developed by
Seller following Closing (as such games are listed in Schedule 1.5
(a)) and any further games developed and made available in accordance
with
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Section 1.5 (b) on and from the moment that such games are delivered
to Buyer in accordance with Section 1.5;
(d) Originals or, if originals are unavailable, copies of Seller's files,
books, and records relating to the IFE Assets, including without
limitation, tapes, computer disks and electronic data processing
software used or usable in the operation of the IFE business
(including all software necessary to enable Buyer to comply with its
obligations under the IFE Contracts and/or the Licensing and
Distribution Agreements), operating manuals, user guides, accounting
journals, customer lists, marketing plans, leads and information
relating to targeted customers, IFE strategy and IFE market analysis
(the "IFE Documentation");
(e) All other tangible personal property and physical assets utilized by
Seller solely in connection with the operation of its IFE business
(the "IFE Tangible Property") including but not limited to: 1 PCU hand
controller; 1 AVU seat-back computer; 2 RGB seat-back displays; 2 sets
of cables; and
(f) All goodwill relating to the IFE business.
1.2 Excluded Assets.
Notwithstanding anything to the contrary in this Agreement, Seller will not
sell or deliver to Buyer, and Buyer will not acquire from Seller:
(a) any of Seller's rights and obligations under contracts with Air
France/Rockwell and British Airways which shall be the subject of a
separate agreement set out in Section 1.6: and
(b) any assets of Seller not used in connection with Seller's IFE business
including but not limited to all contracts of employment with the
Seller's employees, all of which shall not be included in the term
"IFE Assets."
1.3 Assumption of Certain Obligations.
At the Closing, and subject to the limitation set forth at Section 1.3(y)
below, Buyer will assume and will be liable for Seller's obligations to render
performance under the IFE Contracts and the License and Distribution Agreements
insofar as the same have been disclosed to the Buyer prior to the date of this
Agreement. Buyer will not assume and will not be liable for any other
obligations of Seller; provided, however, that Buyer, in its sole discretion and
without otherwise incurring any liability for other obligations of Seller not
assumed by it, may perform on behalf of Seller certain of Seller's obligations
not otherwise assumed hereunder and, in any such event shall be entitled to
reduce the Purchase Price (as defined in Section 2.1(a) below) by an amount
equal to the cost to Buyer to perform such obligation. Such reduction of the
Purchase Price shall be accomplished by Buyer making a claim against Seller and
Seller either satisfying such claim in cash or, to the extent there are any
revenue payments available to be set-off against, by Buyer setting-off the
amount of any such claim against any other sums due to Seller in respect of
revenue sharing arrangements in this Agreement. Without limiting the generality
of the immediately preceding sentence, Seller will retain and be solely
responsible for (v) any
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claims, causes of action or pending or threatened litigation or proceedings
(including without limitation any environmental or tort liabilities) relating to
or arising out of any acts, facts, circumstances, events or conditions occurring
or existing prior to the Closing Date (as defined in Section 8.1), regardless of
when such claims or causes of action are asserted or such litigation or
proceedings are commenced, (w) any liabilities, the existence or amount of which
constitute a breach of a representation, warranty or covenant of Seller
contained in this Agreement or any document executed and delivered by Seller to
Buyer pursuant to this Agreement, (x) any liability, costs or claims of any
nature by or in respect of any of the employees, officers, agents or contractors
of Seller whether or not engaged in the IFE Business, none of which are assumed
by Buyer hereunder, (y) any claims, causes of action or any pending or
threatened litigation or proceedings and any liability thereby arising in
respect of Mr. Sneaky, other than any liability assumed by Buyer to support
those IFE customers, if any, utilizing such game until the expiration of the
current IFE Contract with respect thereto provided that the Seller shall not be
under any such liability in respect of Mr. Sneaky where such liability arises as
a result of the Buyer's misuse of the rights licensed to it in connection with
Mr. Sneaky (that is, any use of Mr. Sneaky software files other than for the
limited purpose described in Section 1.1(c) above), and (z) any obligation or
liability, claims or causes of action arising out of or in connection with the
Seller's contracts with Air France/Rockwell and British Airways.
1.4 Transfer, Conveyance and Assumption.
Seller shall execute and deliver to Buyer at the Closing a Xxxx of Sale and
Assignment in substantially the form attached hereto as Exhibit A (the "Xxxx of
Sale") and all such other assignments, endorsements and instruments of transfer
necessary or appropriate to carry out the intent of this Agreement and to vest
in Buyer title to all of the Assets and all rights, title and interest of Seller
thereto. All of the IFE Assets will be sold (or licensed) free and clear of all
liens, pledges, encumbrances and claims of third parties. Buyer shall execute
and deliver to Seller at the Closing an Assignment and Assumption Agreement in
substantially the form attached hereto as Exhibit B (the "Assumption
Agreement").
1.5 Additional Games
(a) Seller shall as soon as reasonably practicable following Closing
complete the development of the four additional games listed in
Schedule 1.5 for use on the RCPS platform and free of further charge
shall deliver a copy of all software comprised in each game (including
game source code) in CD - Rom format or such other format as may be
agreed between the Seller and the Buyer. As soon as reasonably
practicable following delivery of the software relating to a game,
Buyer shall carry out such test as it considers appropriate to satisfy
itself that the game functions properly and the software is free from
all faults and errors and Buyer shall notify Seller in writing of any
failure of such software in this regard. Upon being notified of any
failure of any such software under this Section, Seller shall correct
the software and shall deliver a further copy of the corrected
software to Buyer within 14 days of notification of the failure. The
Buyer shall have a further opportunity to carry out additional tests
on such corrected software in accordance with this Section. Once Buyer
is satisfied that any software delivered to it under this Section
functions properly and is free from any errors and bugs, Buyer shall
be entitled to license such software for use by its customers.
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(b) Seller shall notify Buyer in writing of any new games (in addition to
those developed under Section 1.5 (a)) developed by Seller in the
three years following Closing and shall make any and such games
available to Buyer free of further charge on the same basis as set out
in Section 1.5 (a).
(c) Seller represents and warrants that, in respect of all and any games
delivered to Buyer in accordance with this Section 1.5, (such
warranties and representations to be given in respect of each software
file at the time of delivery to Buyer):
(i) Title to Properties; Liens; Condition of Properties.
Seller owns the sole and exclusive right, title and interest in
and to all rights subsisting in such games (including any
intellectual property rights) free and clear of all security
interests, mortgages, pledges, liens, conditional sales
agreements, leases, encumbrances, easements, charges or claims of
third parties of any nature whatsoever.
(ii) Intellectual Property Rights.
All intellectual property rights subsisting in such games are
valid and subsisting and the Seller is the sole legal and
beneficial owner of all of them subject to the benefit of the
rights licensed to SNAP2 under the License and Distribution
Agreements. None of the games or software infringes, involves, or
has resulted in infringement of, or any claim or infringement of,
the rights of any other person. Seller pays no royalty to anyone
with respect to the intellectual property rights in such games
and no proceedings have been instituted, are pending or, to the
knowledge of Seller, threatened, that challenge the rights of
Seller in respect thereof. All employees of Seller and third
parties who were involved in the creation of such intellectual
property rights (other than those licensed to SNAP2 under the
Licence and Distribution Agreements) have assigned in favour of
Seller or waived any rights which such employees or third parties
may have as a result of such creation.
(iii)Seller has legal and beneficial title to the source code form of
the software. Seller has taken all proper precautions to preserve
the confidentiality and integrity of all such software.
(d) Seller shall convert the existing games library to use the SNAP2D
graphics library as soon as reasonably practicable.
1.6 Air France / British Airways
The Seller's contracts with Air France / Rockwell shall be the subject of
separate agreement as follows:
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(a) British Airways
Seller shall notify Buyer in writing within seven days of
becoming aware that British Airways has installed interactive
software licensed by Snap2 under the terms of a contract dated 16
April 2001 ("the BA Contract") on its first aircraft and on and
from that moment shall hold the benefit of the BA Contract on
trust for Buyer. Snap2 and Buyer shall use their reasonable
endeavours to procure the consent in writing of British Airways
(in a form satisfactory to both) is obtained to the assignment /
novation of the BA Contract as soon as possible. Upon such
consent being obtained, Snap2 shall assign / novate to Buyer the
BA Contract and upon the installation of the games software on
the first BA aircraft and the first such aircraft entering
service with such software fully functioning and available for
use by passengers, Buyer shall pay to Snap2 a sum to be
calculated by reference to the number of aircraft planned to be
installed over the first 12 months based on the installation plan
to be provided to Seller by BA in accordance with the rates
specified in the product schedule to the BA Contract subject to
such sum payable not exceeding $100,000 and following such
assignment / novation Buyer shall further pay to Snap2 50% of all
revenues received by Buyer from British Airways in respect of the
BA Contract in the three years following Closing. If for any
reason British Airways do not install interactive software
licensed by Snap2 under the BA Contract on the maximum number of
aircraft in respect of which British Airways has been licensed,
or disable any number of aircraft in respect of which such
software had been installed, the relevant proportion of the
upfront fee paid on assignment / novation (calculated on a pro
rata basis) shall be credited and set-off against any other sums
due to Seller in respect of revenue sharing arrangements in this
Agreement.
(b) Air France
Seller shall notify Buyer in writing within seven days of
becoming aware that Air France has extended the number of
aircraft in respect of which it wishes to install interactive
software as licensed to Air France by Snap2 under the terms of a
contract dated 1 October 1999 ("the Air France Contract") and on
and from that moment shall hold the benefit of the Air France
Contract on trust for Buyer. Snap2 and Buyer shall use their
reasonable endeavours to procure the consent in writing of Air
France (in a form satisfactory to both) is obtained to the
assignment / novation of the Air France Contract as soon as
possible. Upon such consent being obtained, Snap2 shall assign /
novate to Buyer the Air France Contract and Buyer shall pay to
Snap2 the sum of $75,000 and following such assignment / novation
shall pay to Snap2 50% of all revenues received by Buyer from Air
France in respect of the Air France Contract in the three years
following Closing.
To the extent that the transfer of any of the IFE Assets under Section
1.4 would, but for this Section 1.6, put Snap2 in breach of either the
BA Contract or the Air France Contract, Buyer shall grant a license to
Snap2 of any such assets to the minimum extent required to ensure the
continuance of the BA Contract and the Air France Contract.
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ARTICLE II
PURCHASE PRICE AND ROYALTIES
2.1 Purchase Price.
(a) The purchase price for the IFE Assets shall be the sum of:
(i) Three Hundred Thousand Dollars ($300,000 U.S.) which shall be
paid by Buyer at Closing by wire transfer of immediately
available funds to an account which will be identified by Seller
not less than two (2) days prior to the Closing Date; and
(ii) 50% of all revenues (i.e. Rockwell) received by Buyer from
the airline operators named in the IFE Contracts in respect of
the licence of "Airsoft" and the games listed in Schedule 1.5 and
Schedule 2.2 (the "Named Games") or provided by Seller as
required under Section 1.5 (b) in the three years following the
date of Closing ; and
(iii) 25% of all revenues received by Buyer under new business
won by Buyer on any other IFE platforms (i.e Matsushita)(i.e. any
contracts with customers other than the IFE Contracts or the BA
Contract or the Air France Contract) in respect of the licence of
any of the games provided by Seller as required under Section
1.5(b)
(together the "Purchase Price").
(b) The sums payable under Section 2.1 (a) (ii) and (iii) shall be
paid by Buyer by cheque quarterly in arrears and payment of such
sums shall be accompanied by a statement showing the gross
revenues received by Buyer and the apportionment of such revenues
in the relevant period and which shall be due 30 days following
the end of the relevant quarter
(c) For the purpose of establishing the accuracy of any statements
provided and revenue payments made under this Section 2.1, Seller
shall be entitled at its cost no more frequently than once in any
calendar year, to inspect the books of account of Buyer relating
to revenues earned under the IFE Contracts and any other
contracts won by Buyer under which any of the Named Games are
licensed to customers and to take reasonable copies.
2.2 Allocation of Purchase Price.
The Purchase Price shall be allocated among the IFE Assets as set forth in
Schedule 2.2.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the following statements are
true and correct as at the Closing Date:
3.1 Due Organization and Qualification.
SNAP2 is a corporation duly organized and validly existing under the laws
of the State of Nevada and is duly qualified to do business as a foreign
corporation in each jurisdiction where such qualification is necessary.
ISES is a corporation duly organized and validly existing under the laws of
the Province of Ontario, Canada, is a wholly owned subsidiary of SNAP2 and is
duly qualified to do business as a foreign corporation in each jurisdiction
where such qualification is necessary.
3.2 Power and Authority.
Seller has all requisite power and authority to: (i) own, lease, license or
to otherwise hold and operate the IFE Assets; (ii) carry on the IFE business and
operations as they are presently being conducted in the places where such IFE
Assets are owned, leased, licensed or otherwise held and where such business and
operations are conducted; and (iii) enter into and perform the terms of this
Agreement, all other agreements by and between the parties related to the sale
of the IFE Assets to Buyer (collectively, the "Other Documents"), including
without limitation the Xxxx of Sale and the Assumption Agreement, and the
transactions contemplated hereby and thereby.
3.3 Binding Effect.
The execution, delivery and performance of this Agreement by Seller have
been duly and validly authorized by all requisite corporate action. This
Agreement constitutes a legal, valid and binding agreement of Seller,
enforceable in accordance with its terms.
3.4 No Conflict.
The execution, delivery and performance of this Agreement by Seller (a)
will not conflict with the Articles of Incorporation or the Bylaws of Seller;
(b) will not result in any breach or termination of, or constitute a default
under, or constitute an event that with notice or lapse of time or both, would
become a default under, or result in the creation of any Encumbrance upon any of
the IFE Assets under, or create any rights of termination, cancellation or
acceleration in any person under any IFE Contract (except to the extent that
consent to the assignment of an IFE Contract may be required), lease,
arrangement or commitment, or violate any order, writ, injunction or decree to
which Seller is a party, by which any of the IFE Assets, business or operations
of Seller may be bound or affected or under which any of the IFE Assets,
business or operations of Seller receive benefits; and (c) will not result in
the violation of any provisions of law applicable to Seller.
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3.5 Title to Properties; Liens; Condition of Properties.
(a) Seller owns the sole and exclusive right, title and interest in and to
all IFE Assets (except that SNAP2's License and Distribution Agreement
with Tetris Company is non-exclusive) free and clear of all security
interests, mortgages, pledges, liens, conditional sales agreements,
leases, encumbrances, easements, charges or claims of third parties of
any nature whatsoever, except those which shall be released or
discharged at or prior to the Closing.
(b) All tangible IFE Assets of Seller, and Seller's use of the same,
comply and at all times have complied in all respects with all laws,
ordinances, codes, regulations and other requirements of any
governmental and other authority having jurisdiction over such IFE
Assets.
(c) The tangible IFE Assets being conveyed pursuant to this Agreement, if
any, are, and at the Closing will be, in adequate operating condition
and repair and suitable for use in the operation of the IFE business,
ordinary wear and tear excepted.
(d) The IFE Assets (not including any which are Excluded Assets) are all
the assets which are or may reasonably be required to carry on and
operate the IFE business in the manner and to the extent that it has
been carried on by Seller prior to the Closing.
3.6 IFE Contracts.
(a) No event of default (or event that, with the giving of notice or
passage of time, would become an event of default) by Seller or to the
knowledge of Seller, the other party thereto exists under any of the
IFE Contracts or License and Distribution Agreements that would permit
a party to such IFE Contracts or License and Distribution Agreements
to terminate any of the IFE Contracts or License and Distribution
Agreements or otherwise deprive Seller of the material benefits under
any of the IFE Contracts, and such IFE Contracts and License and
Distribution Agreements are legal, valid and binding obligations of
the respective parties thereto enforceable in accordance with the
terms thereof. No defenses, offsets or counterclaims thereto have been
asserted, or to the knowledge of Seller or any of its officers,
directors or employees, may be made, by any party thereto other than
Seller, and Seller has not waived any substantial rights thereunder.
(b) The IFE Contracts listed in Article 1.1 (a) are all the contracts that
Seller has with airline operators for the provision of IFE products
and services.
(c) The License and Distribution Agreements listed in Article 1.1 (b) are
all the license and distribution agreements that the Seller has
relating to its IFE business.
3.7 Intellectual Property.
(a) Set forth on Schedule 3.7 is a true, correct and complete list of all
Intellectual Property owned or used by Seller or that Seller is
licensed to use or under which
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Seller possesses any rights. With the exception of those software
files relating to the game known as "Mr. Sneaky" (which are being
provided for the limited purpose described in Section 1.1(c) above)
all such Intellectual Property rights are valid and subsisting and the
Seller is the sole legal and beneficial owner of all of them subject
to the benefit of the rights licensed to SNAP2 under the License and
Distribution Agreements. None of the products, activities, or
operations of Seller infringe, involve, or have resulted in
infringement of, or any claim or infringement of, the rights of any
other person. Except as disclosed on Schedule 3.7, Seller pays no
royalty to anyone with respect to the Intellectual Property and no
proceedings have been instituted, are pending or, to the knowledge of
Seller, threatened, that challenge the rights of Seller in respect
thereof. All employees of Seller and third parties who were involved
in the creation of such Intellectual Property rights (other than those
licensed to SNAP2 under the Licence and Distribution Agreements) have
assigned in favour of Seller or waived any rights which such employees
or third parties may have as a result of such creation.
(b) Seller has legal and beneficial title to the source code form of the
software which is the subject of each of the IFE Contracts. Seller has
taken all proper precautions to preserve the confidentiality and
integrity of all software owned or used by it in relation to the IFE
business.
(c) Seller has not adapted or modified any software held by it on license
or used by it without any consent that may be required to such
adaptation or modification.
(d) Seller has not granted any licence of or right to any of the
Intellectual Property rights save for the IFE Contracts.
3.8 Litigation.
Except as set forth on Schedule 3.8, there is no action, suit, proceeding,
investigation, claim, arbitration, litigation or grievance pending against
Seller or, to the knowledge of Seller, threatened against Seller relating to the
IFE Assets or Seller's IFE business, at law or in equity or before or by any
court or federal, state, municipal or other governmental instrumentality,
domestic or foreign ("Agency" or "Agencies"). None of the actions, suits,
proceedings, or investigations listed on Schedule 3.8 individually or in the
aggregate would (i) if adversely determined, result in any material adverse
change in the IFE business, operations or IFE Assets or the condition, financial
or otherwise, or results of operations of Seller's IFE business, (ii) if
adversely determined, affect the right or ability of Seller to carry on its IFE
business substantially as now conducted; or (iii) challenge or seek to prevent,
enjoin, alter or materially delay the transactions contemplated hereby. Seller
is not subject to any court or Agency order, writ, injunction or decree
applicable to the IFE Assets, or the IFE business and operations of Seller and
Seller is not in default with respect to any order, writ, injunction, or decree
of any court or Agency with respect to the IFE Assets, or the IFE business and
operations of Seller.
3.9 Consents.
No consent, approval, authorization or order of, or other actions by, or
filing with or notification to, any court, Agency or any other person is
required in order to permit Seller to
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execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement, except for (i) compliance with the applicable
reporting requirements of the Securities and Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder and (ii) notices to or the
receipt of consent from other parties to the IFE Contracts and License and
Distribution Agreements.
3.10 Material Facts.
(a) No representation or warranty made by Seller in this Agreement and no
statement made by Seller (a) in any certificate, exhibit, schedule, or
other writing executed and delivered by Seller, (b) in any Other
Agreement or other document or writing furnished in connection with
the transactions herein contemplated and referred to herein or in the
Schedules attached hereto, or (c) in any document or other writing
delivered to Buyer after the date hereof and on or prior to the
Closing Date by or on behalf of Seller, contains or will contain any
untrue statement of a material fact, or omits or will omit to state
any material fact necessary in order to make the statements contained
herein or therein not misleading.
(b) There is no fact or matter concerning the IFE business and/or the IFE
Assets which if disclosed to the Buyer might reasonably affect the
willingness of the Buyer to purchase the IFE Assets or the price or
the terms on which the Buyer would be willing to purchase the IFE
Assets.
(c) During the previous 12 months there has been no substantial change in
the basis or terms of the IFE Contracts or License and Distribution
Agreements apart from normal price changes, no customer or supplier of
the Seller in relation to the IFE business has ceased or substantially
reduced its business with the Seller, and no indication has been
received by the Seller that there will or may be any such change,
cessation or reduction.
3.11 Broker's and Finder's Fees.
Seller has not incurred any obligation to pay any brokerage commission or
finder's fee in connection with the transactions contemplated by this Agreement.
3.12 Financial Statements and Accounts
(a) For the purpose of this Article 3.12, "the Accounts" means the
accounts of Seller in relation to the revenues generated by its IFE
business for the financial period which ended on June 30, 2001 ("the
Accounting Date").
(b) The Accounts have been prepared in accordance with all generally
accepted accounting principles in the US on a basis consistently
applied and show a true and fair view of the revenues of the IFE
business as at the Accounting Date and are not affected (except as
disclosed in the Accounts) by any extraordinary or exceptional item.
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(c) The audited financial statements of SNAP2 for the fiscal year-ended
September 30, 2000 have been prepared in accordance with all generally
accepted accounting principles in the US on a basis consistently
applied and show a true and fair view of the financial condition of
SNAP2 at such date and are not affected (except as disclosed in such
financial statements) by any extraordinary or exceptional items.
3.13 Insolvency
No assignment has been made by Seller for the benefit of its creditors, no
receiver, trustee in bankruptcy or similar officer has been appointed to take
charge of all or any of Seller's property, no voluntary petition has been filed
by Seller and no petition has been filed by any other person in relation to
Seller under federal bankruptcy laws or similar state statutes and no analogous
event has happened or is pending or threatened whether in the US or any other
jurisdiction.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the following statements are
true and correct as at the Closing Date:
4.1 Due Organization and Qualification.
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of England and Wales, and has all requisite corporate
power and authority to enter into this Agreement, the Other Documents and to
carry out the transactions contemplated herein and therein.
4.2 Corporate Power and Authority.
The execution, delivery, and performance of this Agreement by Buyer have
been duly authorized by all requisite corporate action. This Agreement
constitutes the legal, valid and binding agreement of Buyer, enforceable in
accordance with its terms. Buyer has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.
4.3 Consents.
No consent, approval, authorization or order of, or other action by, or
filing with or notification to, any court, Agency, or any other person is
required in order to permit Buyer to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement.
4.4 Litigation.
There is no litigation, action, claim, proceeding or governmental
investigation pending or, to Buyer's knowledge, threatened against Buyer which
may have a materially adverse affect upon Buyer's ability to perform its
obligations under this Agreement.
12
4.5 Broker's and Finder's Fees.
Buyer has not incurred any obligation to pay any brokerage commission or
finder's fee in connection with the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Seller and Buyer hereby covenant and agree as follows:
5.1 Access to Information.
Seller will furnish to Buyer all information concerning the IFE business of
Seller as Buyer may reasonably request. Promptly upon any change in the
information set forth in each of the Schedules referred to herein or any other
disclosure in writing from Seller required by this Agreement, Seller will update
such Schedules or written disclosures by amendment or supplement. Seller hereby
represents and warrants that such Schedules and such written disclosures, as so
amended or supplemented, shall be true, correct, and complete as of the date or
dates thereof.
5.2 Continuing Access to Books and Records; Technical Support.
(a) Seller agrees to provide Buyer, during normal business hours and upon
reasonable notice, for a period of three (3) years after the Closing
Date, access to the books, records and other underlying data and
documentation of Seller relating to the IFE business (but which are
not delivered to Buyer in accordance with Article 1.1(d)) for the
period prior to the Closing Date. Seller agrees that, for such period,
it will preserve and keep intact all such books and records.
(b) After the Closing Date Seller shall provide technical support on site
at Seller's offices (including phone support) or, provided that Buyer
shall reimburse Seller for all of its reasonable out-of-pocket travel
and lodging expense, at such location as may be reasonably requested
by Buyer, equal to six man weeks during the one year period from and
after the Closing Date. During such one year period, any technical
support in excess of six man weeks will be billed by Seller to Buyer
at Seller's then standard hourly rates not to exceed Two Hundred
Dollars ($200) per hour. During each of the second full year following
the Closing Date and the third full year following the Closing Date,
Seller will also provide phone support at the then standard hourly
rate for phone support of Seller. Seller represents and warrants that
each of Seller's employees providing any of such support shall be
knowledgeable about the IFE Assets transferred hereunder and competent
to provide such support.
5.3 Non-Competition and Non-Solicitation of Employees.
(a) For a period of three (3) years after the Closing Date, Seller hereby
covenants and
13
agrees with the Buyer that it will not and will procure that none of
its officers, directors and employees who are or have in the most
recent 24 month period been engaged in the IFE business, will (as an
individual, joint venturer, stockholder, trustee, partner, proprietor,
member, agent or employee of any person, or in any other capacity
whatsoever);
(i) directly or indirectly engage in the business of, or own any debt
or equity interest in, manage, operate, join, control, lend money
or other assistance to, or participate in or be connected with
any Person engaged, directly or indirectly, in any of the
Business Activities within the Territory; or
(ii) directly or indirectly provide service or services as a
consultant, employee, partner, owner or otherwise to any Person
engaged, directly or indirectly, in any of the Business
Activities within the Territory; or
(iii)otherwise directly or indirectly engage in any of the Business
Activities within the Territory.
(b) For a period of three (3) years after the Closing Date, Seller hereby
covenants and agrees with the Buyer that it will not and will procure
that none of its officers, directors and employees who are or have in
the most recent 24 month period been engaged in the IFE business, will
(as an individual, joint venturer, stockholder, trustee, partner,
member, agent or employee of any Person or in any other capacity
whatsoever) directly or indirectly solicit, encourage or endeavour to
entice away from Buyer, or otherwise interfere with Buyer's IFE
relationship with any Person who is, or was, within the most recent 24
month period, an IFE customer or client of Seller.
(c) Neither Buyer nor Seller shall, during a period of three (3) years,
from and after the Closing Date, without the prior written consent of
the other, for its own account or jointly with another, directly or
indirectly solicit, or in any manner attempt to solicit, any person
employed or engaged by the other party (including, without limitation,
any employee or independent contractor known to be engaged by the
other party), to leave that person's employment or engagement.
Notwithstanding the foregoing, this Section 5.3(c) shall not preclude
either party from soliciting any person employed by the other party
where such person independently responds to an employment opportunity
publicized through posting and/or general advertising by Buyer or
Seller to the general public.
(d) Notwithstanding the foregoing, nothing in this Section 5.8 shall
forbid or limit ownership by any of Seller's officers, directors or
employees in the aggregate of less than 1% of the outstanding equity
interests in any publicly traded company.
(e) For the purpose of this Section 5.3:
"Business Activities" shall mean the business of software product
development and service provider for embedded IFE Systems;
14
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, proprietorship,
joint-stock company, trust, strategic alliance, firm or other entity;
"Territory" means (i) the State of Iowa; and (ii) all states
contiguous to the State of Iowa; (iii) all other states comprised in
the United States of America; (iv) the United Kingdom; (v) the rest of
Europe (vi) Australia and (vii) the rest of the world.
(f) Seller and Buyer agree that the restrictions contained in this Section
5.3 are reasonable and necessary to protect legitimate interests of
each party. In the event that any court later determines that the
restrictions in these sections are not reasonable and/or too broad to
be enforceable at law or in equity, Seller and Buyer agree that the
court is authorized to restrict the scope of these sections to a time,
area and/or activity that it deems to be reasonable, so long as the
restrictions of the court is no broader than that contained in these
sections, and so modified this Section 5.3 shall remain in full force
and effect.
(g) Each party acknowledges that the other party may be irreparably harmed
by a breach or threatened breach of any provision of this Section 5.3
and confirms that damages at law may be an inadequate remedy for such
breach or threatened breach. Each party agrees that in the event of
its breach or threatened breach of any provision, the other party may
enforce its rights by specific performance, injunction or other
equitable remedy. Nothing contained herein is intended to, or shall,
limit the right of either party, in addition to such remedies, to
pursue any and all other remedies available to it, including, but not
limited to, a suit for damages, for a breach or threatened breach of
any provision of this Section 5.3. In the event of an action, or
proceeding, by any party to enforce the terms and conditions of this
Section 5.3 or seeking damages for the breach of this Section 5.3,
each party agrees that the prevailing party shall be paid, in addition
to any damages caused by a breach of this Section 5.3, all costs and
expenses, including, but not limited to, reasonable attorneys' fees,
incurred by the prevailing party, in connection with any action or
proceeding.
(h) Notwithstanding anything set forth in this Section 5.3 to the
contrary, Buyer agrees that Seller may contract with Rockwell
International, for the development of system level core software for
utilization in platforms developed by Rockwell International. Any such
software development for Rockwell International, shall not be
construed as a breach of the noncompetition obligations of Seller
included herein. Seller may pursue consulting services in the area of
Business Activities subject to Buyer approval.
15
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall be subject to the
satisfaction on or prior to the Closing Date of all of the following conditions,
except such conditions as Buyer may waive in writing:
6.1 Representations and Warranties of Seller.
All of the representations and warranties of Seller in this Agreement or in
any Schedule or other written disclosure (the "Seller's Representations") shall
have been true and correct when made.
6.2 Covenants of Seller.
All of the covenants and agreements herein of Seller to be complied with or
performed on or before the Closing Date shall have been complied with and
performed in accordance with this Agreement.
6.3 Seller's Certificate.
There shall be delivered to Buyer a certificate dated as of the Closing
Date and signed by the President of SNAP2 to the effect that the conditions set
forth in Sections 6.1 and 6.2 have been met, which certificate shall have the
effect of a representation and warranty made by Seller on and as of the Closing
Date.
6.4 Consents.
Seller shall have obtained all orders, approvals of consents of third
parties that shall be required to consummate the transactions contemplated
hereby, including, without limitation, consents to the assignment of the IFE
Contracts and License and Distribution Agreements, and no material conditions or
obligations shall have been imposed or incurred in connection therewith. This
may be a verbal consent if Buyer is willing to waive such requirement for a
written consent at Closing until written consent is received provided that in
the event of any such waiver being given by Buyer the parties will each use
their reasonable endeavours to obtain such consent in writing in a form
acceptable to Buyer as soon as possible following Closing.
6.5 Injunction.
No federal, state or provincial court nor any governmental or regulatory
authority of competent jurisdiction shall have issued an injunction or order
preventing or limiting in any manner the sale of the IFE Assets to Buyer, nor
shall there be pending or threatened any action seeking such an injunction or
order.
6.6 Opinion of Seller's Counsel.
Buyer shall have received an opinion of counsel to SNAP2 in substantially
the form and
16
substance attached hereto as Exhibit C, with such modifications as may be
acceptable to counsel for Buyer.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall be subject to the
satisfaction on or prior to the Closing Date of all of the following conditions,
except such conditions as Seller may waive in writing:
7.1 Representations and Warranties of Buyer.
All of the representations and warranties of Buyer contained in this
Agreement or in any Schedule or other written disclosure (the "Buyer's
Representations") shall have been true and correct when made.
7.2 Covenants of Buyer.
All of the covenants and agreements herein on the part of Buyer to be
complied with or performed on or before the Closing Date shall have been fully
complied with and performed.
7.3 Buyer's Certificate.
There shall be delivered to Seller a certificate dated as of the Closing
Date and signed by the President or a Vice President of Buyer to the effect that
the conditions set forth in Section 7.1 and 7.2 have been met, which certificate
shall have the effect of a representation and warranty made by Buyer on and as
of the Closing Date.
ARTICLE VIII
CLOSING
8.1 Date and Place of Closing.
Subject to satisfaction or waiver of all the other conditions to the
obligations of the parties set out in Articles VI and VII, the purchase and sale
of the IFE Assets pursuant to this Agreement shall be consummated at a closing
(the "Closing") to be held at such place as the parties may agree immediately
following the execution and exchange of this Agreement by the parties (the
"Closing Date"). Title to the IFE Assets shall pass from Seller to Buyer as of
the Closing Date.
8.2 Seller's Performance.
At the Closing, concurrently with the performance by Buyer of its
obligations to be performed at the Closing, Seller shall:
(a) Conveyances. Execute and deliver to Buyer, in form and substance
acceptable to
17
Buyer (i) the Xxxx of Sale conveying to Buyer the IFE Assets; (ii) the
Assumption Agreement assigning to Buyer the IFE Contracts and License
and Distribution Agreements; and (iii) all other assignments,
endorsements and instruments of transfer as shall be necessary or
appropriate to carry out the intent of this Agreement and as shall be
sufficient to vest in Buyer title to all of the IFE Assets and all
right, title and interest of Seller thereto.
(b) Books and Records. Deliver to Buyer all IFE Documentation that are in
Seller's possession or under its control.
(c) Certificate. Execute and deliver the certificate referred to in
Section 6.3.
(d) Other Action. Take all such other steps as may be necessary or
appropriate to put Buyer in actual and complete ownership and
possession of the IFE Assets.
(e) Consents. Deliver to Buyer copies of all consents and approvals
required by Section 6.4.
(f) Encumbrances. Seller will deliver to Buyer the written release (or
termination or amendment of financing statement) of the IFE Assets
from any Encumbrance, in a form satisfactory to Buyer and within 7
days of Closing shall file with the appropriate entity the necessary
UCC financing amendment form (or other such equivalent form) which
releases the IFE Assets from any such Encumbrance and shall deliver a
copy to Buyer.
(g) Opinion of Counsel. Cause the delivery of the opinion of counsel
required by Section 6.6.
8.3 Buyer's Performance.
At the Closing, concurrently with the performance by Seller of its
obligations to be performed at the Closing, Buyer shall:
(a) Purchase Price. Deliver to Seller the Purchase Price as specified in
Section 2.1 (a) (i).
(b) Assumption Agreement. Execute and deliver to Seller the Assumption
Agreement.
(c) Certificates. Execute and deliver the certificate referred to in
Section 7.3.
8.4 Further Assurances.
In addition to the foregoing, at any time and from time to time, at or
after the Closing, upon request of Buyer, Seller shall, at the expense of Buyer,
take such further actions and execute and deliver such further documents as may
reasonably be required in order to vest in and confirm to Buyer full and
complete title to, possession of and the right to use the IFE Assets or
otherwise carry out the transactions contemplated hereby. At any time and from
time to time, at
18
or after the Closing, upon request of Seller, Buyer shall take such further
actions and execute and deliver such further documents as may reasonably be
required in order to assure and confirm to Seller the assumption by Buyer of the
obligations to render performance that are to be assumed by Buyer pursuant to
this Agreement.
8.5 Transfer Taxes and Similar Charges.
All costs of transferring the IFE Assets in accordance with this Agreement,
including recordation, transfer and documentary taxes and fees and any excise,
sales or use or intangible taxes, shall be borne by Buyer. Buyer shall respond
to or defend against any action or proceeding brought by any Agency relating to
any costs of transferring the IFE Assets and the costs of such response or
defence shall be borne by Buyer. The value for the tangible personal property to
be conveyed hereunder for purposes of Iowa sales tax reporting shall be
consistent with the allocation of the Purchase Price in accordance with Section
2.2.
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1 Survival.
All representations, and warranties, made in or pursuant to this Agreement
or in any certificate furnished pursuant hereto shall survive for a period of
two (2) years after the Closing Date, and shall not be modified, waived or
extinguished by the Closing or by any investigation made by or on behalf of any
party hereto. Buyer or Seller may pursue any claim or action under this Article
IX after the expiration of such two-year period if the party asserting the claim
has first given the other party a notice of such claim, which reasonably
identified the claim, prior to the expiration of such two-year period.
9.2 Buyer's Losses.
Seller agrees to indemnify and defend Buyer against and hold Buyer harmless
from any and all damages (including, without limitation, amounts paid in
settlement with Seller's consent), losses, obligations, liabilities, liens,
deficiencies, costs and expenses, including without limitation reasonably
attorneys' fees (hereinafter referred to collectively as "Buyer's Losses"),
suffered, incurred or paid by Buyer by reason of (i) any Seller's Representation
being untrue or incorrect in any material respect; (ii) any failure by Seller to
observe or perform its covenants and agreements set forth in this Agreement; or
(iii) any failure by Seller to satisfy and discharge any liability or obligation
not expressly assumed by Buyer pursuant to this Agreement. Buyer shall be
entitled to set-off the amount of any Buyer's Losses against any other sums due
to Seller in respect of revenue sharing arrangements in this Agreement
9.3 Seller's Losses.
Buyer agrees to indemnify and defend Seller and hold Seller harmless from,
any and all damages (including without limitation, amounts paid in settlement
with Buyer's consent), losses, obligations, liabilities, claims, deficiencies,
costs and expenses, including without limitation reasonable attorneys' fees
(hereinafter referred to collectively as "Seller's Losses") suffered,
19
incurred or paid by Seller by reason of (i) any Buyer's Representation being
untrue or incorrect in any material respect; (ii) any material failure by Buyer
to observe or perform its covenants and agreements set forth in this Agreement;
or (iii) any failure by Buyer to satisfy and discharge any liability or
obligation expressly assumed by Buyer pursuant to this Agreement.
9.4 Notice of Loss.
Upon receipt by an Indemnified Party of notice of any action, suit,
proceeding, claim, demand or assessment that might give rise to a claim for
indemnity pursuant to this Article IX, the Indemnified Party shall give written
notice thereof within 20 days to the Indemnifying Party indicating the nature of
such claim and the basis therefore. Any delay or failure to so notify the
Indemnifying Party shall relieve the Indemnifying Party of its obligations
hereunder only to the extent, if at all, that the Indemnifying Party is
prejudiced by reason of such delay or failure. With respect to Buyer's Losses,
Seller shall be the "Indemnifying Party" and Buyer shall be the "Indemnified
Party". With respect to Seller's Losses, Buyer shall be the "Indemnifying Party"
and Seller shall be the "Indemnified Party".
9.5 Right to Defend.
Upon receipt of notice of any suit, action, investigation, claim or
proceeding for which indemnification might be claimed by an Indemnified Party,
the Indemnifying Party shall be entitled promptly to defend against such suit,
action, investigation, claim, or proceeding at its own cost and expense. The
Indemnified Party shall have the right, but not the obligation, to participate
at its own expense in a defence thereof by counsel of its own choosing, but the
Indemnifying Party shall be entitled to control the defense unless the
Indemnified Party has relieved the Indemnifying Party from liability with
respect to the particular matter or the Indemnifying Party fails to assume
defense of the matter. In the event the Indemnifying Party shall fail to defend
in a timely manner against any such suit, action, investigation, claim or
proceeding, the Indemnified Party shall have the right, but not the obligation,
to defend, contest, or otherwise protect against the same and make any
compromise or settlement thereof and recover the entire cost thereof from the
Indemnifying Party, including reasonable attorneys' fees and all amounts paid as
a result of such suit, action, investigation, claim or proceeding or the
compromise or settlement thereof. In the event that the Indemnifying Party
undertakes the defence of such matters, the Indemnified Party shall not be
entitled to recover from the Indemnifying Party any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defence
thereof other than the reasonable costs of investigation undertaken by the
Indemnified Party with the prior written consent of the Indemnifying Party. No
settlement to be entered into by the Indemnified Party or the Indemnifying Party
shall be executed unless the terms thereof include an unconditional release of
the other party unless the other party consents thereto.
9.6 Limitations on Liability.
Buyer's right to indemnification under this Article IX for Buyer's Losses
resulting from the circumstances, actions or failures to act described in
Section 9.2 shall be limited to an amount not to exceed the aggregate Purchase
Price actually paid by Buyer. Seller's right to indemnification under this
Article IX for Seller's Losses resulting from the circumstances, actions or
failures to act described shall be limited to an amount not to exceed the
Purchase Price
20
(being those sums actually received by the Seller or properly due and payable by
the Buyer to the Seller).
ARTICLE X
MISCELLANEOUS
10.1 Guarantee
SNAP 2 hereby unconditionally and irrevocably guarantees the obligations of
ISES under this Agreement as they come due.
10.2 Expenses.
Except as otherwise expressly provided herein, Seller and Buyer shall each
pay its own expenses in connection with the preparation of this Agreement and
the consummation of the transactions contemplated hereby, including, without
limitation, fees of its own counsel, auditors and other experts, whether or not
such transactions are consummated.
10.3 Successors and Assigns.
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer any rights
or remedies upon any party, other than the parties hereto and their respective
successors and assigns. Seller acknowledges that Buyer has the right to assign
its rights and obligations under this Agreement only to an entity affiliated
with Buyer. Neither party shall otherwise have the right to assign its rights
and obligations under this Agreement without the prior written consent of the
other party provided that in the event of the sale of the IFE business by the
Buyer, it shall have the rights to assign, as part of the same transaction, the
license set out in Article 1.1(c) to the purchaser of the IFE business. The
Buyer shall further have the right to sub-contract and sub-license its rights
under Article 1.1(c).
10.4 Counterparts.
This Agreement may be executed in one or more counterparts and it shall not
be necessary for all parties to execute the same counterpart. Each such
counterpart shall be deemed to be an original document, but all of such
counterparts shall constitute a single agreement.
10.5 Amendment.
This Agreement may not be modified or amended except in writing signed by
the parties hereto.
10.6 Number, Gender.
Whenever the context hereof shall so require, the singular shall include
the plural, the male gender shall include the female gender and the neuter, and
vice versa.
21
10.7 Governing Law.
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Iowa.
10.8 Waiver, Estoppel.
No term or condition of this Agreement shall be deemed to have been waived
nor shall there be any estoppel to enforce any provision of this Agreement
except by written instrument of the party charged with such waive or estoppel.
10.9 Notices.
Any notice given pursuant to this Agreement must be in writing and may be
given by registered or certified mail or by facsimile, and if given registered
or certified mail, shall be determined to have been given and received when a
registered or certified letter containing such notice, properly addressed with
postage prepaid, is deposited in the United States mails; and if given otherwise
than by registered or certified mail, it shall be deemed to have been given when
delivered to and received by the party to whom addressed. Such notices shall be
given to the parties hereto at the following addresses:
(a) If to Seller:
Xxxx X. Xxxxxxx, III, President
SNAP2 Corporation
00000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Page
Nyemaster, Goode, Voigts, West, Xxxxxxx & O'Brien, P.C.
000 Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer:
Xxx Xxxxxxx
President
Inflight Digital Limited
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxx, X.X.
Tel: 00-000-000-0000
Fax: 00-000-000-0000
22
with a copy to:
Xxxxxxxx Xxxxxx
M and A Solicitors
Xxxxxxx Xxxxxxx Xxxxx
0-00 Xxxxxxxxx Xxxx
Xxxx Xxxxxxx, XX00 0XX
Tel: (000) 00-00-00-00
Fax: (000) 00-00-00-00
Any party hereto may, by giving five (5) days written notice to the other party,
designate any other address in substitution of the foregoing address to which
such notice shall be given.
10.10 Time of the Essence.
Time is of the essence in the performance of the obligations of the parties
under this Agreement.
10.11 Announcements
Subject to Seller's obligations to make periodic reports under the
Securities and Exchange Act of 1934, as amended, the parties mutually agree that
no press or public announcements shall be made by either of them in relation to
this Agreement or the transactions referred to in this Agreement without the
text of the same having first been approved in writing by the other (and
approval shall be given in the case of Seller by Xxxx X. Xxxxxxx III and in the
case of Buyer by Xxx Xxxxxxx).
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed as of the date first written above.
23
SELLER: SNAP2 CORPORATION ISES CANADA INCORPORATED
By: /S/ Xxxx X. Xxxxxxx III By: /S/ Xxxx X. Xxxxxxx III
----------------------- --------------------------
Xxxx X. Xxxxxxx, III, President Xxxx X. Xxxxxxx, III, President
BUYER: INFLIGHT DIGITAL LIMITED
By: /S/ Xxx Xxxxxxx
--------------------------
Xxx Xxxxxxx, President
24
SCHEDULE 1.5
"Checkers"
"Mines Eye" (themed version of MineSweeper)
"Park4Free" (themed version of Connect 4)
"Solitary Tree" (themed version of Chinese Solitaire)
SCHEDULE 2.2
ALLOCATION OF PURCHASE PRICE
Games Purchase Price Allocation
----- -------------------------
1. Backgammon 5.9%
2. Blackjack 5.9%
3. Chinese Solitaire 5.9%
4. Crossword 5.9%
5. Hangman 5.9%
6. Keno 5.9%
7. Noisy Farm 5.9%
8. Noughts & Crosses (a.k.a. Tic Tac Toe) 5.9%
9. Othello 5.9%
10. Poker 5.9%
11. Professional Gold Digger 5.9%
12. Slots 5.9%
13. Solitaire 5.9%
14. Tetristm 5.9%
15. Trivia 5.8%
16. Twins Cafe Match Game 5.8%
17. Zero G 5.8%
Other Assets (including any additional games
------------
under Section 1.5) $1.00
SCHEDULE 3.7
INTELLECTUAL PROPERTY
Royalty Payments to Tetris and Lonely Planet
List of Assets: (See Attached)
--------------
Confidential treatment is requested for this portion of this Exhibit.
SCHEDULE 3.8
SCHEDULE OF LITIGATION
None
EXHIBIT A
XXXX OF SALE
This XXXX OF SALE is made as of ________________ by and between SNAP2
CORPORATION., a Nevada corporation and ISES Canada Incorporated, a Canadian
corporation organized under the laws of the Province of Ontario (collectively
"Seller") and INFLIGHT DIGITAL LIMITED, a company incorporated under the laws of
England and Wales ("Buyer").
WHEREAS, Seller and Buyer are parties to that certain Amended and Restated
Asset Purchase Agreement, dated as of ________________, (the "Agreement"),
pursuant to which Seller has agreed to sell, and Buyer has agreed to buy the IFE
Assets used in connection with the operation of Seller's IFE Business.
Capitalized terms used herein, unless separately defined herein, shall have the
meanings ascribed to them in the Agreement.
NOW THEREFORE, in consideration of the payment by Buyer of the Purchase
Price, the receipt and sufficiency of which are hereby acknowledged, and in
further consideration of the mutual covenants and agreements contained in the
Agreement, Seller hereby sells, assigns, transfers, conveys and delivers to
Buyer, free and clear of all liens, encumbrances and security interests (except
as provided in the Agreement), all of Seller's IFE Assets and rights of every
kind and nature, real, personal, and mixed, tangible and intangible, of every
type and description owned by Seller or in which Seller has an interest which
are used or held for use in connection with the IFE business and operations of
Seller, including, without limitation, the following:
(i) The IFE Contracts described in Section 1(a) of the Agreement;
(ii) The License and Distribution Agreements described in Section 1(b) of
the Agreement;
(iii) A perpetual, royalty-free exclusive world-wide license to use the
Intellectual Property described in Section 1(c) of the Agreement for IFE
business;
(iv) The IFE Documentation described in Section 1(d) of the Agreement;
(v) All IFE Tangible Property and physical assets wherever located,
utilized solely in Seller's IFE business and more specifically described in
Schedule A hereto; and
(vi) All goodwill relating to the IFE Business described in Section 1(e) of
the Agreement.
There shall, however, be excluded from such purchase and sale the following
property owned or used by Seller (the "Excluded Assets"):
(i) Seller's corporate franchise, stock record books, corporate record
books, including minutes of meetings of directors and stockholders, and such
other records as deal exclusively with Seller's organization or stock
capitalization;
1
(ii) Any of Seller's rights and obligations under contracts with Air
France/Rockwell and British Airways; and
(iii) All other assets not utilized solely in Seller's IFE business.
This sale is in accordance with and is subject to all the representations,
warranties, covenants and exclusions set forth in the Agreement.
This Xxxx of Sale shall be binding upon Seller, its successors and assigns,
and shall inure to the benefit of Buyer, its successors and assigns.
IN WITNESS WHEREOF, Seller and Buyer have caused this Xxxx of Sale to be
executed by its duly authorized officer as of the day and year first above
written.
SELLER:
SNAP2 CORPORATION ISES CANADA INCORPORATED
By:_______________________________ By:_______________________________
Name: Xxxx X. Xxxxxxx, III
Title: President Name:_____________________________
Title: President Title:____________________________
BUYER:
INFLIGHT DIGITAL LIMITED
By: ______________________________
Name: Xxx Xxxxxxx
Title: President
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EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made as of November __, 2001 by
and between SNAP2 CORPORATION., a Nevada corporation and ISES Canada
Incorporated, a Canadian corporation organized under the laws of the Province of
Ontario (collectively "Seller") and INFLIGHT DIGITAL LIMITED, a company
incorporated under the laws of England and Wales ("Buyer").
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated
as of November __, 2001 (the "Purchase Agreement"), made between Seller and
Buyer, Seller agreed to sell, and Buyer agreed to purchase certain IFE Assets;
owned by Seller, as more fully described in the Purchase Agreement;
WHEREAS, the Purchase Agreement provides that certain IFE Contracts and
License and Distribution Agreements will be transferred by the Seller to the
Buyer;
WHEREAS, Section 1.3 of the Purchase Agreement provides, among other
things, that the Buyer shall, as of the date hereof, assume certain of Seller's
obligations and liabilities accruing after the Closing Date under the assumed
IFE Contracts and License and Distribution Agreements.
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained in the Purchase Agreement, the closing of the transactions
contemplated by the Purchase Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties, Seller and Buyer agree as follows:
1. All capitalized words and phrases used but not defined herein shall have
the meaning attributed thereto in the Purchase Agreement.
2. Seller hereby assigns and transfers to Buyer all of the obligations and
liabilities of Seller accruing after the date hereof under the IFE Contracts
referred to in Section 1(a) of the Purchase Agreement and the License and
Distribution Agreements referred to in Section 1(b) of the Purchase Agreement.
3. Buyer hereby assumes and agrees to perform the obligations and
liabilities of the Seller arising on or after the date hereof under the IFE
Contracts referred to in Section 1(a) of the Purchase Agreement and the License
and Distribution Agreements referred to in Section 1(b) of the Purchase
Agreement, subject to the terms of Section 1.3 and the other terms and
provisions of the Purchase Agreement.
4. Seller and Buyer shall execute and deliver from time to time hereafter,
upon reasonable request, all such further documents and instruments, and shall
do and perform all such
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acts as may be necessary, to give full effect to the intent and meaning of the
Purchase Agreement and this Assignment and Assumption Agreement.
5. This Assignment and Assumption Agreement is executed and delivered by
Seller and Buyer pursuant to the Purchase Agreement, subject to the covenants,
representations and warranties thereof. No provisions set forth herein shall be
deemed to enlarge, alter or amend the terms or provisions of the Purchase
Agreement. In the event of any conflict between the provisions herein and the
Purchase Agreement, the provisions of the Purchase Agreement shall control.
6. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa.
7. This Assignment and Assumption Agreement may be executed in several
counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
Agreement to be executed and delivered by their duly officers as of the day and
year first above written.
SELLER:
SNAP2 CORPORATION ISES CANADA INCORPORATED
By:____________________________________ By:______________________________
Name: Xxxx X. Xxxxxxx, III
Title: President Name:____________________________
Title:___________________________
BUYER:
INFLIGHT DIGITAL LIMITED
By: ______________________________
Name: Xxx Xxxxxxx
Title: President
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EXHIBIT C
FORM OF OPINION OF SELLER'S COUNSEL
November 26, 2001
INFLIGHT DIGITAL LIMITED
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxx
Re: Amended and Restated Asset Purchase Agreement dated November 26, 2001
between SNAP2 Corporation as a Seller and Inflight Digital Limited as
Buyer
Gentlemen:
This opinion is furnished to you pursuant to Section 6.6 of the Amended and
Restated Asset Purchase Agreement dated November 26, 2001 (herein called the
"Agreement") by and among SNAP2 Corporation, (herein called the "Company") ISES
Canada, Incorporated, and you.
We have acted as counsel for the Company in connection with its sale and
license (as applicable) to you of its IFE Assets as defined in and contemplated
by the Agreement. As such counsel, we have reviewed the Agreement and the
corporate proceedings of the Company relating to the authorization and approval
by the Board of Directors of the Company of the transaction contemplated by the
Agreement. We have examined the originals or copies certified or otherwise
authenticated to our satisfaction of the Articles of Incorporation and By-Laws
of the Company, resolutions adopted by the Board of Directors, including the
respective documents submitted thereto for approval or ratification, and
certificates or letters of public officials.
As to questions of fact relating to the Company which are material to our
opinion, we have relied solely upon the representations and warranties of the
Company in the Agreement and documents referred to therein. In rendering our
opinion, we have assumed the genuineness and authenticity of all documents
submitted to us as originals and the conformity with genuine and authentic
originals of all documents submitted to us as copies; we have assumed the due
authorization, execution and delivery of the Agreement and the documents
referred to therein by you, the binding effect of such documents on you and the
enforceability thereof against you; we have made no independent investigation as
to the accuracy for completeness of any certificates, representations, data or
other information, written or oral, made or furnished in connection with the
Agreement or otherwise, and we have assumed that none of such information
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements made not misleading.
Based upon the foregoing assumptions and limitations and subject to the
further limitations set forth below, we are of the opinion that:
1. The Company is a corporation organized under the laws of Nevada in good
standing under the laws of such State and is authorized to transact business in
the State of Iowa as a foreign corporation.
2. The Company is validly existing and has all requisite corporate power to
own its
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assets and conduct its business now being conducted and to execute and deliver
the Agreement and to consummate the transactions contemplated thereby.
3. The consummation of the transactions contemplated by the Agreement will
not conflict with any term or provision of the Articles of Incorporation by
By-Laws of the Company.
4. The Agreement has been duly executed and delivered by officers of the
Company, and has been duly authorized by all necessary corporate action of the
Company.
5. To our knowledge having made reasonable enquiry of the relevant officers
of Seller, the share purchase agreement dated June 26, 2001 ("Share Purchase
Agreement") for the sale and purchase of all issued and outstanding shares of
capital stock of ISES Canada, Incorporated has been entered into between Company
as Purchaser in the Share Purchase Agreement and certain individuals as Vendors
and such sale and purchase has closed substantially in accordance with the terms
of the Share Purchase Agreement.
We are members of the bar of the State of Iowa only and do not hold
ourselves out as experts on the laws of any other State or foreign country.
Consequently, we express no opinion with respect to the laws of any jurisdiction
other than the State of Iowa and the United States of America.
In the foregoing opinions, phrases such as "to our knowledge," "known to
us," "we know of," "of which we have knowledge" and those with equivalent
wording refer to the actual conscious awareness of information by the lawyers of
this firm who have prepared this opinion or have been actively involved in
assisting and advising the Company in connection with the transaction
contemplated by the Agreement. In that regard, we have not undertaken any
independent investigation of or inquiry into such matters as are not
specifically addressed in numbered paragraphs (1) through (5).
This opinion is limited to the matters stated herein and no opinion is
implied or may be incurred beyond the matters expressly stated herein.
This opinion is limited in its use to reliance by you in consummating the
transaction contemplated by the Agreement. No other person or entity may rely or
claim reliance upon this opinion.
The opinions expressed herein are made as of the date hereof and we do not
undertake to update this opinion with respect to any changes of which we may
later become aware.
Very truly yours,
NYEMASTER, GOODE, VOIGTS, WEST, XXXXXXX
& O'BRIEN, P.C.
By: __________________________________
Xxxxxxx X. Page
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