ASSIGNMENT AND ASSUMPTION AGREEMENT

Form 6-K | Integrated Media Technology Limited

Exhibit 99.1

ASSIGNMENT AND ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”), dated as of 29 December 2021, is between Integrated Media Technology Limited, an Australia corporation whose address is Xxxxx 0, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxxx (“Assignee”), and Joint Investment Limited, a Hong Kong corporation whose address is 1605 Xxx Xxxx Xxxxxxxx, 000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx (“Assignor”) (individually a “Party” and collectively, the “Parties”).

RECITALS

WHEREAS, Assignor and M6 Limited (“M6L”) and Ace Corporation Limited (“ACL”) are parties to the “Subscription Agreement” entered into on September 13, 2021, (the “Assigned Contract”); and

WHEREAS, Assignee wishes to acquire all the rights of the Assignor under the Assigned Contract, and Assignor wishes to assign such rights under the Assigned Contract to Assignee; and

WHEREAS, terms used herein which are not defined shall have the meaning ascribed to them in the Assigned Contract.

AGREEMENTS

NOW, THEREFORE, in consideration of the recitals and the mutual promises, covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1.       Effective Date/Condition Precedents. The Parties agree that the “Effective Date” of this Agreement shall be deemed to be the first day on which all of the following conditions precedent are met: (i) execution of this Agreement by both Parties; (ii) the Consent to Assignment between Assignor, M6L and ACL substantially in the form of Exhibit A hereto (the “Consent Agreement”) is executed by all parties thereto.

2.       Assignment/Assumption. Effective as of the Effective Date, Assignor hereby sells, transfers and assigns to Assignee all of Assignor’s right, title and interest in, to and under as Subscriber under the Assigned Contract. In consideration for the Assignment Payment as set out in Section 3 below, Assignee expressly accepts the assignment set forth in the preceding sentence and hereby assumes all of Assignor’s liabilities, obligations, taxes and contractual commitments as Subscriber under and/or pertaining to the Assigned Contracts. Notwithstanding the preceding paragraph, the Parties agree that any subscription payments in connection with the Assigned Contract shall be for the account of, and promptly delivered to or satisfied by Assignee.

3.        Assignment Payment.

3.1   The Assignee shall pay the Assignor a performance fee payment calculated based on the PE Ratio multiplied by the Annualized Earnings multiplied by Holding Percentage less the amount of equity investment made by the Assignee (or its affiliates) in the Company (“the Performance Consideration”). The Assignee agrees to pay the Performance Consideration by cashier order or banker draft within two weeks after the Parties agree on the Audited Profits set out in this Section 3.1 below, but in any event no later than four months after the third anniversary of the Completion Date.

Where for the purpose of this Section 3:

“Annualized Earnings” is defined as the average audited profits of the Company earned for the period of two years from the Completion Date.

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“Audited Profits” means the audited consolidated profits before taxation attributable to shareholders of the Company for the relevant period prepared under the accounting principles of the Company consistently applied.

“Company” means Ace Corporation Limited.

“Completion Date” means the date the Assignor has completed all the subscription in the Assigned Contract.

“Holding Percentage” means the lower of the percentage of shareholdings held by the Assignor in the Company at the Completion Date and the date of the second anniversary of the Completion Date.

“PE Ratio” means 5.

3.2     Assignee shall provide a report of the Audited Profits (“Profits Report”) issued by the auditor of the Company of the Performance Consideration to be received by the Assignor as set out in Section 3.1 above. If the Assignor is not satisfied with the Profits Report from the Company’s auditor, then the Assignor shall have the right to appoint an independent auditor, agreed by both parties, to issue an independent report, and the findings of the independent auditor shall be final and binding on the parties.

3.3.     Bonus Payment. Subject to the Company or its business being listed on a recognized stock exchange within 5 years from Completion Date, the Assignee shall pay the Assignor a bonus payment equivalent to 3% of the Company’s market value at the date of listing; and such payment shall be made within 3 months of such listing.

4.         Event of Default.

(a)       The Parties agree that should Assignee as Subscriber under the Assigned Contract is in breach of any of the obligations under the Assigned Contract, Assignee shall be solely responsible for any and all liabilities arising out of such breach.

(b)       The Parties agree that should the Assignee is in breach of any payments obligations under this Agreement, then the default interest for such breach shall accrual at an annual interest of 10% per annum. Default interest under this section shall accrue from 15 days of the written notification of such breach, provided that such breach is not cured.

5.       Modifications to the Assigned Contract. Each Party (the “Amending Party”) acknowledges and agrees that without the other Party’s prior written consent, the Amending Party shall have no right to agree to or otherwise enter into any amendment or modification to the Assigned Contract which would materially adversely affect the rights and obligations of such other Party under the Assigned Contract. Any such attempted amendment or modification made without the prior written consent of such other Party shall be considered null and void, and the Amending Party agrees to indemnify and hold harmless such other Party from and against any loss, damage, cost or expense in connection with any unauthorized amendment or modification to the Assigned Contract.

6.         No Agency

(a)       This Agreement does not establish a partnership, agency, joint venture or similar relationship, nor does it obligate any Party to enter into such a relationship. Furthermore, other than as set forth in this Agreement, Assignee shall have no authority to commit Assignor to any action or obligations under the Assigned Contract and Assignor shall have no authority to commit Assignee to any action or obligations under the Assigned Contract. Assignee agrees that in the event that it takes any action by virtue of its role under the Assigned Contract that places or purports to place an obligation on Assignor, Assignee shall indemnify Assignor for any costs that Assignor incurs as a result of such obligation.

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7.       Representations and Warranties. Each Party makes the following representations and warranties on the date hereof:

(a)       Assignor hereby represents and warrants to Assignee that:

(i) all necessary approvals and/or consents for Assignor’s assignment of the Assigned Contract have been obtained; (ii) the execution, delivery and performance by Assignor of this Agreement (a) is within Assignor’s power and (b) has been duly authorized by all necessary action on its part; and (iii) in connection with the negotiation of and the entering into this Agreement and the assignment of the Assigned Contract: (a) it is not relying upon any representations (whether written or oral) of Assignee other than the representations expressly set forth in this Agreement; (b) Assignee has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Agreement or the Assigned Contract; (c) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, divestment or hedging decisions relating to the Assigned Contract based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by Assignee; and (d) it is entering into this Agreement with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks.

(b)       Assignor further represents and warrants to Assignee that:

(i) Attached hereto as Exhibit B is a true and complete copy of the Assigned Contract, which has not been amended to date, which has not been rescinded and which is in full force and effect as of the date hereof.

(ii) As of the Effective Date, Assignor will hold good and valid title to all of its contractual rights in the Assigned Agreement, free and clear of any and all liens and encumbrances.

(iii) To Assignor’s knowledge and except as previously disclosed to Assignee in writing, there does not exist under the Assigned Contract any violation, breach or event of default, or event or condition that, after notice or lapse of time or both, would constitute a material violation, breach or event of default thereunder on the part of Assignor. Assignor neither has received any notice nor has any knowledge of any claim alleging any such violation, breach or default. There are no suits, actions, claims, complaints, litigation, investigations or legal or administrative or arbitration proceedings pending or threatened, whether at law or in equity, before or by any federal, foreign, state, local or other Governmental Agency which would reasonably be likely to materially affect this Agreement or the Assigned Contract or any other agreements, documents and instruments to be executed in connection herewith. There are no judgments, decrees, injunctions, rulings, awards or orders of any Governmental Agency against Assignor or any of its affiliates relating to or affecting this Agreement, the Assigned Contract or any other agreements, documents and instruments to be executed in connection herewith. There have been no material violations of any Laws by Assignor with respect to or affecting the Assigned Contract.

(iv) The Assigned Contract is a valid and binding agreement of Assignor, enforceable against it in accordance with its terms and, to Assignor’s knowledge, is a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, except where enforceability may be limited or otherwise impacted by bankruptcy, insolvency, or other similar laws affecting creditors’ rights generally and except where enforceability is subject to the application of equitable principles or remedies.

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(c)       Assignee hereby represents and warrants to Assignor that:

(i) all necessary approvals and/or consents for Assignee’s assumption of the Assigned Contract have been obtained; (ii) the execution, delivery and performance by Assignee of this Agreement (a) is within Assignee’s power and (b) has been duly authorized by all necessary action on its part; (iii) in connection with the negotiation of and the entering into this Agreement and the assumption of the Assigned Contract: (a) it is not relying upon any representations (whether written or oral) of Assignor other than the representations expressly set forth in this Agreement; (b) Assignor has not given to it (directly or indirectly through any other person) any advice, counsel, assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Agreement or the Assigned Contract; (c) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its own investment, acquisition or hedging decisions relating to the Assigned Contract based upon its own judgment and upon any advice from such advisors as it has deemed necessary, and not upon any view expressed by Assignor; (d) it is entering into this Agreement with a full understanding of all of the risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks; and (e) the Agreement is a valid and binding agreement of Assignee, enforceable against it in accordance with its terms except where enforceability may be limited or otherwise impacted by bankruptcy, insolvency, or other similar laws affecting creditors’ rights generally and except where enforceability is subject to the application of equitable principles or remedies.

8.         Confidentiality.

(a)       Prior to the dissemination of the initial public disclosure of this Agreement and the transactions contemplated therein, the Parties shall mutually agree upon the text of such disclosure.

(b)       Except as described in Section 8(a) above, neither Party shall disclose, unless authorized in writing by the other Party, the terms of this Agreement, except in order to comply with any applicable law, order, regulation or exchange rule or to obtain transmission, distribution, ancillary or other regulated services; provided, that the disclosing Party provide the non-disclosing Party as much advance notice of such public disclosure as is practicable under the circumstances. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek in connection with, this confidentiality obligation; provided a breach of this Section shall not give rise to a right to suspend or terminate this Agreement.

9.        Governing Law/Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the South Australia. Any judicial proceeding brought against any Party hereto with respect to this Agreement shall be brought in South Australia, irrespective of where such Party may be located at the time of such proceeding, and by execution and delivery of this Agreement, each of the Parties hereto hereby consents to the exclusive jurisdiction of such courts and waives any defense or opposition to such jurisdiction. Each Party hereto expressly waives any right to a jury trial and agrees that any court proceeding shall be tried as a bench trial only.

10.        Assignment. This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by each of the Parties, and their respective permitted successors and assigns. Any assignment by either party shall not act as a novation or release of such party’s obligations under this Agreement, unless such a novation or release is agreed to in writing by the other Party, and in the absence of such agreement such assigning party shall continue to be primarily liable for such obligations. Either Party hereto shall have the right to assign this Agreement to an affiliate without the necessity of obtaining the other Party’s consent thereto. Any assignment of this Agreement shall require the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Any attempted assignment in violation of this Section shall be void.

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11.       LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES IN TORT, CONTRACT UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY PROVIDED HEREIN, THE LIMITATIONS HEREIN IMPOSED SHALL BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SOLE, JOINT, CONCURRENT, OR ACTIVE OR PASSIVE.

12.       Entirety. Except for the Consent Agreement, this Agreement embodies the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements, arrangements, discussions and undertakings among the Parties (whether oral or written) with respect to the subject matter hereof.

13.       Execution by Facsimile; Counterparts. This Agreement may be executed by facsimile which shall be fully effective as an original. This Agreement may be executed in any number of separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.

The rest of this page is intestinally left blank.

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Exhibit A

Consent Agreement

CONSENT TO ASSIGNMENT

The undersigned, being the parties under the Subscription Agreement between Joint Investment Limited (“JIL”), M6 Limited and Ace Corporation Limited dated 13 September 2021 (the “Contract”), hereby acknowledges and consents to the assignment by JIL as Assignor of the Contract and the assumption by Integrated Media Technology Limited as the Assignee of Assignor’s duties and obligations under the Contract.

Dated this          day of                     , 2021.

SIGNED by	)
for and on behalf of	)
Joint Investment Limited	)
in the presence of:	)
SIGNED by	)
for and on behalf of	)
M6 Limited	)
in the presence of:	)
SIGNED by	)
for and on behalf of	)
Ace Corporation Limited	)
in the presence of:	)
SIGNED by	)
for and on behalf of	)
Integrated Media Technology Limited	)
in the presence of:	)

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Exhibit B

IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been duly executed by the Parties hereto effective as of the Effective Date.

SIGNED by Xxxxxxxx Xxxxx	)	/s/ Xxxxxxxx Xxxxx
for and on behalf of	)
Integrated Media Technology Limited	)
in the presence of:	)
SIGNED by Xxxxxxxxx Xxxx	)	/s/ Xxxxxxxxx Xxxx
for and on behalf of	)
Joint Investment Limited	)
in the presence of:	)

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