Exhibit 2.2
EXECUTION VERSION
================================================================================
STOCK PURCHASE AGREEMENT
AMONG
PRISMA iVENTURES LTD.
AND
ISW ACQUISITION CO., LLC
DATED AS OF JULY 3, 2002
================================================================================
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of July 3, 2002,
among Prisma iVentures Ltd., a corporation organized under the laws of England
("PiV" or "Seller"), and ISW Acquisition Co., LLC, a Delaware limited liability
company, ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the direct owner of a total of 100,100 ordinary
shares of GIG representing 62.956% of the issued share capital of GIG (the "PiV
Shares");
WHEREAS, upon the terms and conditions herein set forth, Buyer desires
to purchase from Seller, and Seller desires to sell to Buyer, the PiV Shares;
WHEREAS, simultaneous with the purchase of the PiV Shares, Buyer is
purchasing a total of 58,900 ordinary shares of capital stock of GIG from
Xxxxxxx and MultiGames, representing 37.044% of the issued share capital of GIG;
WHEREAS, simultaneous with the purchase of the PiV Shares, GIG and
KirchSport are entering into certain agreements.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions and promises hereinafter set forth, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Definitions
For purposes of this Agreement, the following terms have the meanings
set forth below:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person. For the purposes of this definition, "control" (including,
with correlative meaning, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"Agreement" has the meaning set forth in the preamble.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City, NY or London, England are authorized
or required to close.
"Buyer" has the meaning set forth in the preamble.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Consents" means all consents and approvals of Governmental Bodies or
other third parties necessary to authorize, approve or permit the parties to
consummate the Transaction.
"Damages" has the meaning set forth in Section 10.1.
"Disclosure Schedule" means the Disclosure Schedule of PiV, delivered
pursuant to this Agreement and for the avoidance of doubt includes the Due
Diligence Material and all information and documents available from a search of
the public files maintained by the Registrar of Companies in England and Wales
in respect of GIG, up to and including two Business Days prior to execution of
this Agreement, but excluding all financial statements for years ending prior to
December 31, 2001.
"Due Diligence Material" means all material, documents and disclosures
made to the Buyer or ISW as more particularly described in Exhibit C.
"Encumbrances" means any mortgage, lien, pledge, charge, security
interest, encumbrances, equities or claims of any kind.
"GIG" means Global Interactive Gaming Ltd., a corporation organized
under the laws of England (formerly known as Global Interactive Gaming AG).
"GIG Loan" means the sum of (pound)44,929.93 loaned to PiV on 15 May
2002 to pay the PAYE obligations of PiV;
"GIG Shareholders Agreement" means the GIG shareholders deed dated 31
December 2001 signed between PiV and MultiGames;
"Governmental Body" means any domestic or foreign national, state,
multi-state or municipal or other local government, any subdivision, agency,
commission or authority thereof, any court, or any quasi-governmental or private
body exercising any regulatory or taxing authority thereunder.
"Indemnifying Party" has the meaning set forth in Section 10.3.
"Indemnitee" has the meaning set forth in Section 10.3.
"ISW Acquisition Co., LLC" has the meaning set forth in the preamble.
"ISW" means Interactive Systems Worldwide Inc., a Delaware corporation.
"KirchSport" means KirchSport Limited, a corporation organized under
the laws of England.
2
"KirchSport Agreement" means the Agreement by and between GIG and
KirchSport dated as of the date hereof, relating to, among other things, certain
rental obligations.
"Knowledge" or "knowledge" means when used with respect to any party,
the knowledge, information or belief that the party has or should reasonably
have after making full inquiry into the relevant subject matter.
"Laws" means statutes, laws, regulations and rules of any Governmental
Body.
"License" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization consent or clearance to transact an activity or business or to use
an asset or process, in each case issued or granted by a Governmental Body.
"Liquidator" means the person appointed as liquidator of PiV at the
Meeting;
"Litigation" means a suit, legal action or arbitration.
"Material Adverse Effect" means a material adverse effect on the
business, assets, results of operations or financial condition of GIG and the
Subsidiaries taken as a whole.
"Meeting" means the meeting of the creditors of PiV to be convened
pursuant to section 98 of the Insolvency Xxx 0000 or any adjournment hereof.
"MultiGames" means MultiSport Games Development Inc., a Delaware
corporation.
"Person" means an individual, corporation, partnership, trust,
unincorporated organization or other entity, or a Governmental Body.
"PiV" means Prisma iVentures Ltd., a corporation organized under the
laws of England.
"PiV Assets" means those assets owned by PiV (or to the extent any are
partly owned by PiV that percentage ownership of PiV) as listed in Exhibit A.
"PiV Charge" means the charge held by PiV over the assets of GIG dated
5 November 2001.
"PiV Shares" means the 100,100 ordinary shares of issued capital of GIG
owned of record and beneficially by PiV representing 62.956% of the issued share
capital of GIG, such share capital being split into 89,100 fully paid up
ordinary shares and 11,000 partly paid ordinary shares being 80.86% paid up.
"Purchase Price" has the meaning set forth in Section 2.2.
"Seller" means PiV.
3
"Xxxxxxx" means Xxxxx X. Xxxxxxx, a citizen of England.
"Xxxxxxx/MultiGames Agreement" means the agreement dated the date
hereof relating to the sale of a total of 37.044% of the share capital of GIG to
Buyer.
"Tax" or "Taxes" means any United Kingdom or United States or other
foreign federal, state or local income, business, occupation, environmental,
gross receipts, ad valorem, alternative or add-on minimum tax profits,
severance, franchise, license, transfer, sales, use, value added, payroll,
employment, withholding, pension plan, property (real or personal), production,
excise or similar taxes (including interest, penalties or additions to such
taxes and any interest in respect of such penalties or additions).
"Third Party Claims" has the meaning set forth in Section 10.3.
"Transaction" means the transaction contemplated by this Agreement and
the Xxxxxxx/MultiGames Agreement and the KirchSport Agreement.
Section 1.2. Other Definitional Provisions
(a) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Unless otherwise specified, the word "including" (whether or not
accompanied by the phrase "without limitation") means "including without
limitation."
ARTICLE 2
PURCHASE AND SALE
Section 2.1. Purchase and Sale
Subject to the terms and conditions of this Agreement, the Seller
agrees to sell, transfer, and deliver as beneficial owners with full title
guarantee to Buyer, and Buyer agrees to purchase and accept from the Seller, at
the Closing, good, valid and marketable title to the PiV Shares, free and clear
of any Encumbrances, for the consideration specified in Section 2.2.
Section 2.2. Purchase Price
Subject to the terms and conditions of this Agreement and in
consideration of the sale of the PiV Shares, Buyer shall pay and deliver at
Closing as the full purchase price for the Shares, U.S. $365,000 (the "Purchase
Price").
4
Section 2.3. Assumption of GIG Loan
Subject to the terms and conditions of this Agreement, PiV agrees to
assign to, and Buyer agrees to accept and assume the obligations for repayment
of, the GIG Loan and Buyer shall on Closing assume obligations to repay the GIG
Loan to GIG.
ARTICLE 3
CLOSING
Section 3.1. Closing
The closing of the Transaction (the "Closing") will take place at the
offices of Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX
00000 at 10:00 a.m. (local time) on the third Business Day immediately following
the satisfaction or waiver of the conditions precedent in Sections 7 and 8, or
at such other time and place as Buyer and Seller shall agree in writing (the
"Closing Date").
Section 3.2. Delivery and Payment
At the Closing, Seller shall deliver to Buyer (i) the stock
certificate(s) representing the PiV Shares and (ii) duly executed stock transfer
forms in blank. The cost of the stock transfer tax stamps shall be shared
equally by Buyer and Seller in accordance with Section 12.13. Buyer shall
deliver the Purchase Price by wire transfer of immediately available funds to an
account designated in writing by Seller. Seller agrees that Buyer may reduce the
Purchase Price by US $915, representing Seller's share of such stock transfer
tax stamps, and Buyer shall thereafter pay the cost of all stock transfer tax
stamps. The parties shall cooperate in the valuation of the share transfer
stamps and to the extent that the Buyer does not pay or is refunded any amount
to be utilized for stock transfer stamps, one-half of that amount shall be
returned to PiV.
Section 3.3. Other Deliveries by Seller
In addition to the items required by Section 3.2, at the Closing,
Seller shall deliver to Buyer the following in form and substance satisfactory
to Buyer:
(a) Certificate as to the good standing of PiV in its jurisdiction of
organization;
(b) The officer's certificate of Seller referred to in Section 8.3;
(c) Certificates of the Secretary of PiV as to (i) the resolutions of
the Board of Directors and shareholders of PiV as contemplated by this Agreement
and the Transaction, (ii) the incumbency of the officers of PiV executing the
Agreement and the approval by the Liquidator;
(d) An assignment to Buyer of PiV's obligations under the GIG Loan and
an assumption thereof by Buyer and an assignment of the benefit of the PiV
Charge to Buyer, in the form of Exhibit B;
5
(e) The Certificate from the Liquidator ratifying this Agreement
contemplated by Sections 6.1 and 7.7;
(f) Any other instruments and documents explicitly required by this
Agreement to be delivered by the Seller at the Closing; and
(g) Any other instruments and documents reasonably requested by Buyer.
Section 3.4. Other Deliveries by Buyer
In addition to the items required by Section 3.2, at the Closing, Buyer
shall deliver to Seller the following:
(a) Certificate as to the good standing of Buyer in its state of
organization;
(b) The officer's certificate of Buyer referred to in Section 7.3;
(c) Certificate of the Secretary of Buyer as to (i) the resolutions of
Buyer with respect to the Agreement and the Transaction and (ii) the incumbency
of the officers of Buyer executing the Agreement;
(d) Any other instruments and documents explicitly required by this
Agreement to be delivered by Buyer at the Closing; and
(e) Any other instruments and documents reasonably requested by Seller.
Section 3.5. Other Deliveries
In addition to the items required by Sections 3.2 - 3.4, the Seller or
the Buyer, as the case may be, shall deliver to the other, in form and substance
satisfactory to the intended recipient, the following:
(a) The Seller shall deliver a waiver of PiV's preemption rights in the
stock in GIG as contained in the GIG Shareholders Agreement;
(b) The Seller shall deliver a Letter Agreement between MultiGames and
PiV terminating the GIG Shareholders Agreement; and
(c) The Seller shall deliver to the Buyer a Power of Attorney in favor
of the Buyer empowering the Buyer to exercise the Seller's rights as a
shareholder of GIG pending the stamping and registration of the transfer
referred to in Section 3.2.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PiV
PiV represents and warrants to the Buyer that, except as disclosed in
its Disclosure Schedule:
6
Section 4.1. Organization of PiV; Authority
PiV is a corporation duly organized, validly existing and in good
standing under the laws of England, with the corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
Section 4.2. Authorization; No Breach
Subject to section 6.1, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all required corporate action on the part of PiV and all
required action by the shareholders of PiV. This Agreement has been duly
executed and delivered by PiV and constitutes a legal, valid and binding
obligation of PiV, enforceable against PiV in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors
rights and to general equitable principles. The execution and delivery by PiV of
this Agreement and the consummation of the Transaction by PiV will not (a)
violate any provision of any applicable law, rule or regulation, (b) violate any
order, judgment or decree applicable to PiV, (c) conflict with, or result in a
breach of or default under any term or condition of the Certificate of
Incorporation or By-laws of PiV or (d) violate, conflict with, result in a
breach of any provision of, or constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or in a right of termination or cancellation of, or accelerate
the performance required by, any note, bond, mortgage, indenture, deed of trust,
lease, contract or agreement to which PiV or any of its properties may be bound
or to which it is a party or result in the creation of any Encumbrance upon any
of the properties of PiV.
Section 4.3. Share Ownership
PiV is the record and beneficial owner of good, valid and marketable
title to the PiV Shares set forth opposite its name on the Disclosure Schedule
and it owns such PiV Shares free and clear of any Encumbrances. At the Closing,
it will transfer to Buyer good, valid and marketable title to such PiV Shares,
free and clear of any Encumbrances.
Section 4.4. Governmental Consents
Other than mandatory UK Companies House notifications for changes to
directors, secretary, auditors and registered office, no consent, license,
approval, waiver, application, expiration of waiting period or authorization of,
or registration or declaration with, any UK Governmental Body is required to be
obtained or made by PiV in connection with the execution, delivery and
performance by PiV of this Agreement.
Section 4.5. Third Party Consents and Approvals
The execution, delivery and performance of this Agreement by PiV, and
the consummation of the Transaction by PiV, do not require the consent or
approval of any third party other than a Governmental Body.
7
Section 4.6. Litigation
There is no Litigation pending against PiV or, to the knowledge of PiV,
threatened against PiV which would impair the ability of PiV to consummate the
Transaction.
Section 4.7. Brokers and Intermediaries
PiV has not employed any broker, finder, consultant or intermediary in
connection with this Agreement or the Transaction that would be entitled to a
broker's, finder's or similar fee or commission in connection therewith.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller that except as disclosed in
Buyer's Disclosure Schedule:
Section 5.1. Organization of Buyer; Authority
Buyer is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of Delaware, with the power and
authority to enter into this Agreement and to perform its obligations hereunder
and thereunder.
Section 5.2. Authorization; No Breach
The execution, delivery and performance of this Agreement and the
consummation of the Transaction have been duly authorized by all requisite
limited liability company action on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer, and upon execution and delivery the
Agreement constitutes a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights and to general
equitable principles. The execution and delivery by Buyer of this Agreement will
not, (a) violate any provision of any applicable law, rule or regulation, (b)
violate any order, judgment or decree applicable to Buyer, (c) conflict with, or
result in a breach of or default under, any term or condition of the certificate
of formation of Buyer or (d) violate, conflict with, result in a breach of any
provision of, or constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, or result in the termination or
in a right of termination or cancellation of, or accelerate the performance
required by, any note, bond, mortgage, indenture, deed of trust, lease, contract
or agreement to which Buyer or any of its properties may be bound or to which it
is a party or result in the creation of any Encumbrance upon any of the
properties of Buyer.
Section 5.3. Governmental Consents
8
No consent, license, approval, waiver, expiration of waiting period or
authorization of, or registration or declaration with, any Governmental Body is
required to be obtained or made by Buyer in connection with the execution,
delivery and performance of this Agreement, and the consummation of the
Transaction.
Section 5.4. Third Party Consents and Approvals
The execution, delivery and performance of this Agreement, and the
consummation of the Transaction by Buyer, does not require the consent or
approval of any third party, except such consents and approvals which have been
obtained.
Section 5.5. Litigation
There is no Litigation pending or, to the knowledge of Buyer,
threatened against Buyer which would materially impair the ability of the Buyer
to consummate the Transaction.
Section 5.6. Acquisition of PiV Shares
The PiV Shares are being acquired by Buyer for its own account solely
for the purpose of investment without the view to, or for sale in connection
with, any distribution thereof in violation of federal or state securities laws
and with no present intention of distributing or reselling any part thereof.
Buyer will not so distribute or resell any Shares in violation of any such law.
Section 5.7. Brokers and Intermediaries
Buyer has not employed any broker, finder, advisor or intermediary in
connection with the Transaction which would be entitled to a broker's, finder's
or similar fee or commission in connection therewith or upon the consummation
thereof.
ARTICLE 6
COVENANTS OF PiV AND BUYER
Section 6.1. Calling Creditors Meeting and Conditionality
PiV shall convene the Meeting as soon as reasonably practicable
following the date of this Agreement, and shall use its reasonable endeavors to
ensure a liquidator is appointed as soon as reasonably practicable after the
date of this Agreement and if one is not appointed on or prior to August 1, 2002
the Buyer shall have the right to rescind this Agreement on written notice to
the Seller.
This Agreement is conditional upon ratification by the Liquidator
within 14 days of his appointment. Ratification shall take the form of a letter
from the Liquidator to the Buyer confirming that he has no objection to the
Closing. In the event that this Agreement is not so ratified within 14 days of
the Liquidator's appointment it shall be treated as void and neither party shall
have any claim whatsoever against the other in respect of it, except in respect
of any prior breach.
9
If the Liquidator ratifies this Agreement in accordance with this
Section 6.1 he shall be acting for and on behalf of PiV and neither he, his
firm, partners, employees, advisers, representatives or agents shall incur any
personal liability whatsoever in respect of any of the obligations undertaken by
PiV or in respect of any failure on the part of PiV to observe, perform or
comply with any such obligations or under or in relation to any associated
arrangements or negotiations or under any document or assurance made pursuant to
this agreement.
If the Liquidator ratifies this Agreement in accordance with this
Section 6.1 the Buyer acknowledges and agrees that any claim the Buyer may have
against PiV arising from this Agreement shall be an unsecured claim in the
liquidation of PiV and, for the avoidance of doubt, any such claim shall not be
treated as an expense of PiV's liquidation.
Section 6.2. Transfer of Certain Property
In consideration of the Buyer entering into this Agreement and for such
other good and valuable consideration which shall be inclusive of any value
added tax, PiV agrees to assign and transfer to GIG at the Closing free and
clear of any Encumbrances and with full title guarantee the PiV Assets owned by
it and further agrees that to the extent that any PiV Assets are only part owned
by PiV it shall assign its ownership interest in the part owned PiV Assets to
GIG free and clear of any Encumbrances and with full title guarantee. PiV shall
cause the PiV Assets to be delivered (or in the case of the telephone system
made available) to the Buyer all of the PiV Assets at the Closing together with
all associated records, information and other requisite and relevant
documentation.
Section 6.3. Forgiveness of all inter-company debts between GIG and PiV
In addition to the requirements of Section 8.7, PiV hereby agrees that
payment of the Purchase Price by Buyer to PiV shall be in full and final
settlement of all debts, loans, obligations, expenses or other amounts owed by
GIG or any of its Subsidiaries to PiV and any of its Affiliates and vice versa
and neither GIG, or any of its Subsidiaries nor PIV nor any of its Affiliates
shall thereafter have any further obligations or indebtedness to the other
except as set forth in the KirchSport Agreement or in Section 6.2 of this
Agreement.
ARTICLE 7
CONDITIONS PRECEDENT OF THE SELLER
The obligation of the Seller to consummate the Transaction is subject
to the fulfillment of each of the following conditions prior to or at the
Closing:
10
Section 7.1. Representations and Warranties
The representations and warranties of Buyer contained in Article 5
shall be true in all material respects at and as of the Closing Date, with the
same force and effect as though made at and as of the Closing Date, except for
changes expressly contemplated by this Agreement, and except to the extent that
any representation or warranty is made as of a specified date, in which case
such representation or warranty shall be true in all material respects as of
such date.
Section 7.2. Agreements
Buyer shall have performed and complied in all material respects with
all its undertakings and agreements required by this Agreement to be performed
or complied with by the Buyer prior to or at the Closing.
Section 7.3. Buyer Certificate
Seller shall have been furnished with a certificate of an authorized
officer of Buyer, dated the Closing Date, certifying to the effect that the
condition contained in Section 7.2 has been fulfilled.
Section 7.4. Compliance with Law
No law, and no order or injunction of any Governmental Body, shall be
in effect which prohibits the consummation of the Transaction.
Section 7.5. Consents
All material governmental authorizations, consents, approvals,
exemptions, or other actions required to consummate the Transaction, if any,
shall have been obtained and shall be in full force and effect.
Section 7.6. Release of Funding Obligation
PiV shall receive a release from GIG in the form of Exhibit D of any
further obligation to fund the operations of GIG or to pay any further calls on
shares owned in GIG.
Section 7.7. Liquidator's Approval
This agreement is conditional on it being ratified by the Liquidator
appointed at the Meeting and the Seller shall have delivered at or prior to
Closing a letter from the Liquidator approving the Agreement and the
consummation of the Transaction by PiV.
Provided always that the Seller may in its absolute discretion waive the
satisfaction of any of the conditions contained in this Article 7 other than the
condition set forth in Section 7.7, which may not be waived without the prior
written consent of Buyer, which consent Buyer may withhold in its absolute
discretion.
11
ARTICLE 8
CONDITIONS PRECEDENT OF BUYER
The obligation of Buyer to consummate the Transaction is subject to the
fulfillment of each of the following conditions prior to or at the Closing:
Section 8.1. Representations and Warranties
The representations and warranties of the Seller contained in Article 4
shall be true in all material respects at and as of the Closing Date, with the
same force and effect as though made at and as of the Closing Date, except for
changes expressly contemplated by this Agreement or those disclosed in any
Disclosure Schedule, and except to the extent that any representation or
warranty is made as of a specified date, in which case such representation or
warranty shall be true in all material respects as of such date. Except as set
forth in this Agreement, neither party is making any representations or
warranties.
Section 8.2. Agreements
The Seller shall have performed and complied in all material respects
with its material undertakings and agreements required by this Agreement to be
performed or complied with by the Seller prior to or at the Closing.
Section 8.3. Seller's Certificates
Buyer shall have been furnished with a certificate of an authorized
officer of the Seller dated the Closing Date, certifying to the effect that the
conditions contained in Section 6.1 have been fulfilled.
Section 8.4. Compliance with Law
No law, and no order or injunction of any Governmental Body, shall be
in effect which prohibits the consummation of the Transaction.
Section 8.5. Consents
All material governmental authorizations, consents, approvals,
exemptions, or other actions required to consummate the Transaction, if any,
shall have been obtained and shall be in full force and effect.
Section 8.6. Xxxxxxx/MultiGames Agreement and KirchSport Agreement
The Xxxxxxx/MultiGames Agreement and the KirchSport Agreement shall
close simultaneously with the Closing, it being understood that the Transaction
contemplated by this Agreement and the purchase of all of the shares of GIG
owned by Xxxxxxx and MultiGames (which together with the Shares being purchased
from the Seller, represent 100% of the issued share capital of GIG) shall occur
simultaneously.
12
Section 8.7. Miscellaneous
Except as set forth herein, all agreements and obligations between GIG
and/or any of its Affiliates, and The KirchGroup and/or any of its Affiliates
(other than the Xxxxxxx/MultiGames Agreement and the KirchSport Agreement),
shall at the Closing automatically be terminated without any liability to GIG or
otherwise resolved to the satisfaction of Buyer and Buyer shall receive evidence
satisfactory to it that all such agreements have terminated without any
liability to GIG.
Provided always that the Buyer may in its absolute discretion waive the
satisfaction of any of the conditions contained in this Article 8.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 9.1. Survival of Representations and Warranties
All representations and warranties of the Seller and Buyer included in
this Agreement shall survive until December 31, 2002 and shall thereafter expire
except with respect to breaches and violations if any, as to which Buyer or
Seller has given notice to the other, which notice shall specify in reasonable
detail the alleged breach.
ARTICLE 10
INDEMNIFICATION
Section 10.1. Indemnification of Buyer
Subject to the terms and conditions of this Article 10 and Article 9,
the Seller agrees to indemnify and hold harmless the Buyer and its successors,
assigns, and Affiliates, against and in respect of any and all claims, demands,
losses, damages, costs and reasonable expenses, including, without limitation,
reasonable legal fees and expenses ("Damages"), resulting or arising from (a)
any failure by such Seller to perform or otherwise fulfill or comply with any
provision of this Agreement, (b) any breach or violation of any representation
or warranty of Seller hereunder.
Section 10.2. Indemnification of the Seller
Subject to the terms and conditions of this Article 10, Buyer agrees to
indemnify and hold harmless the Seller and its respective successors and
permitted assigns and its respective Affiliates against and in respect of any
and all Damages resulting or arising from any of the following: (a) any failure
by Buyer to perform or otherwise fulfill or comply with any provision of this
Agreement and (b) any breach or violation of any representation, warranty,
covenant or agreement of Buyer hereunder.
Section 10.3. Claims
13
Any claim for indemnity under Section 10.1 or 10.2 shall be made by
written notice from the party seeking to be indemnified (the "Indemnitee") to
the party from which indemnification is sought (the "Indemnifying Party")
specifying in reasonable detail the basis of the claim. When an Indemnitee
seeking indemnification under Section 10.1 or 10.2 receives notice of any claims
made by third parties ("Third Party Claims") which is to be the basis for a
claim for indemnification hereunder, the Indemnitee shall give written notice
promptly after receipt of notice of such Third Party Claim to the Indemnifying
Party reasonably indicating the nature of such claims and the basis thereof.
Upon notice from the Indemnitee, the Indemnifying Party may (in respect of Third
Party Claims only), but shall not be required to, assume the defense of any such
Third Party Claim, including its compromise or settlement, and the Indemnifying
Party shall pay all reasonable costs and expenses thereof and shall be fully
responsible for the outcome thereof, provided, however, that the Indemnifying
Party shall not settle any such claim without the Indemnitee's prior written
consent (which consent shall not be unreasonably withheld) unless the only
remedy for such claim is monetary damages which are paid in full by the
Indemnifying Party and unless such settlement includes as an unconditional term
thereof the giving by the claimant or the plaintiff to Indemnitee, a release
from all liability in respect to such claim. In connection with any claim
involving any remedy other than such monetary damages, the Indemnitee shall have
the right to be kept informed and be consulted in connection with the resolution
of such claim. The Indemnifying Party shall give notice to the Indemnitee as to
its intention to assume the defense of any such Third Party Claim within ten
(10) days after the date of receipt of the Indemnitee's notice in respect of
such Third Party Claim. The Indemnitee shall cooperate fully in the defense of
the Third Party Claim as and to the extent reasonably requested by the
Indemnifying Party (such cooperation shall include the retention and, upon the
request of the Indemnifying Party, the provision to such party of records and
information which are reasonably relevant to such claim or demand and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder). If an
Indemnifying Party does not, within ten (10) days after the Indemnitee's notice
is given, give notice to the Indemnitee of its assumption of the defense of the
Third Party Claim, the Indemnifying Party shall not have the right to control
the defense thereof unless it thereafter elects to assume the defense thereof by
notice to the Indemnitee. If the Indemnitee assumes the defense of any Third
Party Claim because of the failure of the Indemnifying Party to do so in
accordance with this Section 10.3, the Indemnifying Party shall pay all
reasonable costs and expenses of such defense and shall be fully responsible for
the outcome thereof. The Indemnifying Party shall have no liability with respect
to any compromise or settlement thereof effected without its prior written
consent, which consent shall not be unreasonably withheld.
Section 10.4. Limitation of Liability
Any claims by Buyer or any Seller for breach of any representation or
warranty made hereunder shall be subject to the following:
With respect to Sections 10.1(b) and 10.2(b), the provisions for
indemnity shall be effective only to the extent that the aggregate amount of all
such claims for which Buyer or Seller is liable hereunder and under the
Xxxxxxx/MultiGames Agreement exceeds $200,000 in the aggregate, in which case
Buyer or Seller, as the case may be, shall be liable to the other hereunder for
all such amounts in excess thereof. Except with respect to the representations
and warranties contained in Sections 4.1, 4.2, 4.3 and 4.7 in no event shall
Seller be liable to Buyer in an amount in excess of US$430,000; and in no event
shall Buyer be liable to Seller in an amount in excess of US$365,000.
14
ARTICLE 11
TERMINATION
Section 11.1. Grounds for Termination
This Agreement may be terminated at any time prior to the Closing by
written agreement of Buyer and Seller.
Section 11.2. Effect of Termination
Termination of this Agreement pursuant to this Article 11 shall
terminate all obligations of the parties hereto; provided, however, that the
provisions of this Article 11 and the provisions set forth in Sections 12.1,
12.2, 12.3 and 12.4 shall survive any such termination.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Governing Law
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF ENGLAND, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF
CONFLICTS OF LAW THEREOF.
Section 12.2. Notices
All notices, requests, permissions, waivers, and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
received only if delivered personally, by facsimile transmission, by first class
mail (registered or certified mail, return receipt requested), properly
addressed and postage prepaid or by Federal Express or other overnight mail
service:
If to ISW Acquisition Co., LLC, to:
c/o Interactive Systems Worldwide Inc.
0 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxx Xxxxxxxx, XX 00000
Telephone: x000-000-0000
Telecopier: x000-000-0000
Attention: Xxxxx Xxxxxx
15
with a copy to:
Xxxxxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: x(000) 000-0000
Telecopier: x(000) 000-0000
If to PiV, to:
Prisma iVentures Ltd.
Floor 32, Centrepoint Tower
000 Xxx Xxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Attention: Xxxxx X. Xxxxxxx
Fax: x00 000 000 0000
Phone: x00 000 000 0000
with a copy to:
Global Interactive Gaming Ltd.
Floor 30, Centrepoint Tower
000 Xxx Xxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Attention: Xxxxxxx Lunjevich
Fax: x00 000 000 0000
Phone: x00 000 000 0000
Such names and addresses may be changed by such notice.
Section 12.3. Entire Agreement
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein and therein, and supersedes
and cancel all prior agreements, negotiations, correspondences, undertakings and
communications of the parties, oral or written, regarding such subject matter.
Section 12.4. Amendments
This Agreement may be amended only by a written instrument executed by
the parties or their respective successors or permitted assigns.
16
Section 12.5. Headings; References
The article, section and paragraph headings and table of contents
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. All references
herein to "Articles", "Sections", or "Schedules" shall be deemed to be
references to Articles or Sections hereof and Schedules hereto unless otherwise
indicated.
Section 12.6. Counterparts
This Agreement may be executed in one or more counterparts and each
counterpart shall be deemed to be an original.
Section 12.7. Parties in Interest; Assignment
This Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any Person not a party
to this Agreement (other than ISW) any rights or remedies under or by reason of
this Agreement, except as otherwise provided in Article 10 with respect to
Indemnities. No party to this Agreement may assign or delegate all or any
portion of its rights, obligations or liabilities under this Agreement without
the prior written consent of the other parties to this Agreement. Any assignment
in violation of this Section 12.7 shall be null and void, without any force or
effect.
Section 12.8. Severability: Enforcement
Whenever possible, each provision of this Agreement will be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable
under any applicable law or rule in any jurisdiction, such provision will be
ineffective only to the extent of such invalidity, illegality or
unenforceability in such jurisdiction, without invalidating the remainder of
this Agreement in such jurisdiction or any provision hereof in any other
jurisdiction.
Section 12.9. Waiver
Any of the conditions to Closing set forth in this Agreement may be
waived in writing at any time prior to or at the Closing hereunder by the party
entitled to the benefit thereof. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be construed to
be a waiver of any such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of such party thereafter to enforce
each and every such provisions. No waiver of any breach of or noncompliance with
this Agreement shall be held to be a waiver of any other or subsequent breach or
noncompliance.
17
Section 12.10. Disclosure Schedules
The information contained in the Schedules hereto shall not be deemed
to constitute an admission by the Seller or Buyer or otherwise imply that any
such information is material for purposes of this Agreement or otherwise. The
Seller and Buyer shall have the right at any time prior to the Closing to
supplement or amend in writing the Schedules hereto with respect to any matter
required to be set forth or described in such Schedules; provided, however, that
such supplement or amendment shall not be deemed to cure a breach of a
representation or warranty or satisfy a condition unless waived by the party for
whose benefit the representation or warranty is made. For purposes of the rights
and obligations of the parties hereunder, upon the occurrence of the Closing,
any such supplemental or amended disclosure shall not be deemed to have been
disclosed as of the date of this Agreement for purposes of indemnification
hereunder.
Section 12.11. Specific Performance.
Each of the parties acknowledges and agrees that the PiV Shares are
unique and that, prior to Closing, remedies at law, including monetary damages,
will be inadequate in the event of a breach by Seller in the performance of its
obligations under this Agreement. Accordingly, the parties agree that in the
event of any such breach, the non-breaching party shall be entitled to a decree
of specific performance pursuant to which the breaching party is ordered to
affirmatively carry out its pre-Closing obligations under this Agreement. The
foregoing shall not be deemed to be or construed as a waiver or election of
remedies by any non-breaching party and each non-breaching party expressly
reserves any and all rights and remedies available to it at law or in equity in
the event of any breach or default by the breaching party under this Agreement.
Section 12.12. Further Assurances
Following the Closing, the Seller and Buyer shall, and shall cause each
of their Affiliates to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions as
shall be necessary, or otherwise reasonably requested by the other party, to
confirm and assure the rights and obligations provided for in this Agreement and
render effective the consummation of the Transaction.
Section 12.13. Expenses
All costs and expenses incurred in connection with this Agreement and
the Transaction (including fees and disbursements of financial advisors,
accountants and attorneys and any brokers or finders), shall be paid (a) by the
Seller, if such costs or expenses are incurred by or on behalf of the Seller,
(b) by Buyer, if such costs or expenses are incurred by or on behalf of Buyer,
and (c) with respect to all sales, filing, recordation, transfer and similar
taxes arising from or associated with the sale and transfer of the Shares
("Transfer Taxes"), one-half by Buyer and one-half by the Seller.
18
Section 12.14. Termination
In the event that the Closing has not occurred by August 15, 2002, this
Agreement may be terminated by either party upon written notice to the other and
neither party shall have any liability to the other except in respect of any
prior breach of this Agreement For the avoidance of doubt, failure of the
Liquidator to approve this Agreement shall not be considered a breach of this
Agreement.
Section 12.15. Third Party Interests
Except as set out in Section 6.2 and 6.4 which shall be enforceable by
GIG, each party confirms that no term of this Agreement is enforceable under the
Contracts (Rights of Third Parties) Xxx 0000 by a person who is not a party to
this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
ISW ACQUISITION CO., LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Chairman of the Board
PRISMA iVENTURES LTD.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
19
TABLE OF CONTENTS
Page
ARTICLE - 1 DEFINITIONS..................................................................................1
Section 1.1. Definitions...................................................................1
Section 1.2. Other Definitional Provisions.................................................4
ARTICLE 2 - PURCHASE AND SALE............................................................................4
Section 2.1. Purchase and Sale.............................................................4
Section 2.2. Purchase Price................................................................4
Section 2.3. Assumption of GIG Loan........................................................5
ARTICLE 3 - CLOSING......................................................................................5
Section 3.1. Closing.......................................................................5
Section 3.2. Delivery and Payment..........................................................5
Section 3.3. Other Deliveries by Seller....................................................5
Section 3.4. Other Deliveries by Buyer.....................................................6
Section 3.5. Other Deliveries..............................................................6
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF PiV........................................................6
Section 4.1. Organization of PiV; Authority................................................7
Section 4.2. Authorization; No Breach......................................................7
Section 4.3. Share Ownership...............................................................7
Section 4.4. Governmental Consents.........................................................7
Section 4.5. Third Party Consents and Approvals............................................7
Section 4.6. Litigation....................................................................8
Section 4.7. Brokers and Intermediaries....................................................8
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BUYER......................................................8
Section 5.1. Organization of Buyer; Authority..............................................8
Section 5.2. Authorization; No Breach......................................................8
Section 5.3. Governmental Consents.........................................................8
Section 5.4. Third Party Consents and Approvals............................................9
Section 5.5. Litigation....................................................................9
Section 5.6. Acquisition of PiV Shares.....................................................9
Section 5.7. Brokers and Intermediaries....................................................9
ARTICLE 6 - COVENANTS OF PiV AND BUYER...................................................................9
Section 6.1. Calling Creditors Meeting and Conditionality..................................9
Section 6.2. Transfer of Certain Property.................................................10
Section 6.3. Forgiveness of all inter-company debts between GIG and PiV...................10
ARTICLE 7 - CONDITIONS PRECEDENT OF THE SELLER..........................................................10
Section 7.1. Representations and Warranties...............................................11
Section 7.2. Agreements...................................................................11
Section 7.3. Buyer Certificate............................................................11
Section 7.4. Compliance with Law..........................................................11
Section 7.5. Consents.....................................................................11
Section 7.6. Release of Funding Obligation................................................11
Section 7.7. Liquidator's Approval........................................................11
ARTICLE 8 - CONDITIONS PRECEDENT OF BUYER...............................................................12
Section 8.1. Representations and Warranties...............................................12
Section 8.2. Agreements...................................................................12
Section 8.3. Seller's Certificates........................................................12
Section 8.4. Compliance with Law..........................................................12
Section 8.5. Consents.....................................................................12
Section 8.6. Xxxxxxx/MultiGames Agreement and KirchSport Agreement........................12
Section 8.7. Miscellaneous................................................................13
ARTICLE 9 - SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................................................13
Section 9.1. Survival of Representations and Warranties...................................13
ARTICLE 10 - INDEMNIFICATION............................................................................13
Section 10.1. Indemnification of Buyer.....................................................13
Section 10.2. Indemnification of the Seller................................................13
Section 10.3. Claims.......................................................................13
Section 10.4. Limitation of Liability......................................................14
ARTICLE 11 - TERMINATION................................................................................15
Section 11.1. Grounds for Termination......................................................15
Section 11.2. Effect of Termination........................................................15
ARTICLE 12 - MISCELLANEOUS..............................................................................15
Section 12.1. Governing Law................................................................15
Section 12.2. Notices......................................................................15
Section 12.3. Entire Agreement.............................................................16
Section 12.4. Amendments...................................................................16
Section 12.5. Headings; References.........................................................17
Section 12.6. Counterparts.................................................................17
Section 12.7. Parties in Interest; Assignment..............................................17
Section 12.8. Severability: Enforcement....................................................17
Section 12.9. Waiver.......................................................................17
Section 12.10. Disclosure Schedules.........................................................18
Section 12.11. Specific Performance.........................................................18
Section 12.12. Further Assurances...........................................................18
Section 12.13. Expenses.....................................................................18
Section 12.14. Termination..................................................................19
Section 12.15. Third Party Interests........................................................19
ii
EXHIBIT A - List of PiV Assets
EXHIBIT B - Assignment of GIG Loan
EXHIBIT C - Due Diligence Material
EXHIBIT D - Form of Release of PiV's Obligations to Fund GIG or Pay
Further Calls on GIG Shares.
