DATED 29 SEPTEMBER 1999
INFOGRAMES ENTERTAINMENT SA
TAKE TWO INTERACTIVE SOFTWARE INC.
--------------------------------------------------------------
AGREEMENT
TO BUY AND SELL
DMA DESIGN HOLDINGS LIMITED
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GARRETTS
000 Xxxxxx
Xxxxxx
XX0X 0XX
Phone: 0000 000 0000
Fax: 0000 000 0000
Ref: MDLD/DCR
THIS AGREEMENT is made on 29 September 1999
BETWEEN:
(1) INFOGRAMES ENTERTAINMENT SA, a company incorporated in France (registered
number RCS Lyon B341 699 106) whose registered office is at 82 - 00 xxx
xx 0xx Xxxx 0000, 00000 Xxxxxxxxxxxx, Xxxxxx (the "Seller"); and
(2) TAKE TWO INTERACTIVE SOFTWARE INC., a Delaware Corporation whose business
address is at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX (the "Buyer").
BACKGROUND:
(A) DMA Design Holdings Limited (the "Company"), a company incorporated in
England and Wales (registered no. 3736771) whose registered office is at
00 Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx X0 0XX, has an authorised share
capital of (pound)1,000 comprising 1,000 ordinary shares of (pound)1
each, one of which is issued and legally and beneficially owned by the
Seller (the "Sale Share").
(B) DMA Design Limited (the "Subsidiary"), a company incorporated in England
and Wales (registered no. 3312220) and whose registered office is at The
Green House, 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxxx X0 0XX, has an
authorised share capital comprising 1,000 ordinary shares of (pound)1
each, one of which is issued and legally and beneficially owned by the
Company (the "Subsidiary Share").
(C) The Seller has agreed to sell and the Buyer has agreed to buy the Sale
Share on the terms and subject to the conditions of this Agreement.
THE PARTIES AGREE as follows:
1 INTERPRETATION
1.1 In this Agreement:
Attack/Clan Wars Assignment means the assignment of intellectual
property in the computer games "Attack"
and "Clan Wars" between the Subsidiary
and Gremlin Interactive Limited dated
the date of this Agreement;
Assigned Games means the computer games "Attack", "Clan
Wars" and "Tanktics";
Business Day means a day other than a Saturday or
Sunday on which banks generally in the
City of London are open to transact
normal business;
Buyer's Group Company means each of the Buyer and its parent
undertaking(s) and any subsidiary
undertaking(s) of any of them, in each
case from time to time (and including,
for the avoidance of doubt the Company
and the Subsidiary);
Claim means a claim (whether in contract, tort
or otherwise) by the Buyer under or in
relation to clause 4 or clause 9 or the
Tax Deed or for misrepresentation;
Companies Act means the Companies Xxx 0000;
Completion means completion of the sale and
purchase of the Sale Share in accordance
with clause 3;
Completion Accounts means the accounts of the Subsidiary
prepared in accordance with clause 2.5;
Encumbrance means a mortgage, pledge, charge, lien
or assignment or any other encumbrance,
priority or security interest or
arrangement of any kind, or other type
of preferential arrangement (including a
title transfer and retention agreement)
having similar effect;
First Share Sale Agreement the agreement dated the date of this
Agreement to buy and sell the share in
the Subsidiary and to lend and borrow
money for that purpose between Gremlin
Holdings Limited as seller, the Company
as buyer and borrower and the Seller as
lender;
IPR Assignments means the Wild Metal Country Assignment,
the Tanktics Assignment and the
Attack/Clan Wars Assignment;
Key Person means a person who immediately after
Completion is a director of the
Subsidiary or was employed or engaged as
an employee of the Subsidiary in the
capacity of manager or producer or in a
more senior capacity (other than the
directors of the Subsidiary who will
resign in accordance with clause 3.1.4);
Liabilities all liabilities, duties, commitments and
obligations of every description (but
excluding Tax Liabilities ), whether
deriving from contract, common law,
statute or otherwise, whether present or
future, actual or contingent or
ascertained or unascertained and whether
owed or incurred severally or jointly or
as a principal or surety;
Reorganisation means the reorganisation of the group of
companies comprising the Seller's Group
Companies, the Company and the
Subsidiary which took place between 1
July 1999 (inclusive) and Completion
including the IPR Assignments, the First
Share Sale Agreement, the Second Share
Sale Agreement and the waiver by Gremlin
Group Plc on 2 August 1999 of an amount
of(pound)3,871,000 owed by the
Subsidiary (and for the avoidance of
doubt the reorganisation shall not
include any actions carried out by the
Subsidiary in the ordinary course of its
business);
Second Share Sale Agreement means the agreement dated the date of
this Agreement to buy and sell the
shares in Gremlin Group PLC between the
Company as seller and Ocean Holdings
Limited as buyer;
Secondment Agreement means the secondment agreement in agreed
form between Gremlin Interactive
Limited, the Subsidiary and the Buyer in
respect of the Secondment of two
employees of Gremlin Interactive Limited
to the Subsidiary;
Seller's Group Company means each of the Seller and its parent
undertaking(s) and any subsidiary
undertaking(s) of any of them, in each
case from time to time;
Tanktics Assignment means the assignment of intellectual
property in the computer game "Tanktics"
between the Subsidiary and Gremlin
Interactive Limited dated the date of
this Agreement;
Tax shall have the meaning given to it in
the Tax Deed;
Tax Deed means the tax deed in agreed form to be
entered into between the Buyer and the
Seller;
Tax Liability shall have the meaning given to it in
the Tax Deed;
Uncapped Claims means any Claims (whether in contract,
tort or otherwise) and whether for
breach of warranty or misrepresentation
in respect of the warranties in clause
4.2.1 to 4.2.8, the indemnities in
clauses 9.1.2 and 9.1.3 or under the Tax
Deed; and
Wild Metal Country Assignment means the assignment of intellectual
property in and certain publishing
agreements relating to the computer game
"Wild Metal Country" between the Buyer,
the Subsidiary and Gremlin Interactive
Limited and dated the date of this
Agreement. 1.2 In this Agreement, a
reference to:
1.2.1 a clause or party or schedule, unless the context otherwise
requires, is a reference to a clause of or a party or schedule to
this Agreement;
1.2.2 a person includes, unless the context otherwise requires, a
reference to a body corporate, association, governmental
authority, public body, trustee or partnership;
1.2.3 a document is a reference to the document as from time to time
supplemented or varied;
1.2.4 a "subsidiary undertaking" or a "parent undertaking" is to be
construed in accordance with section 258 of the Companies Act;
1.2.5 "control" is to be construed in accordance with section 416 of
ICTA;
1.2.6 a document in the "agreed form" means the document in the form
agreed and, for the purposes of identification only, signed or
initialled by or on behalf of the Seller and the Buyer. A list of
these documents is set out in schedule 3;
1.2.7 a person includes a reference to the person's legal personal
representatives, successors and lawful assigns; and
1.2.8 a statutory provision includes a reference to the statutory
provision as modified or re-enacted or both from time to time
before the date of this Agreement and any subordinate legislation
made under the statutory provision before the date of this
Agreement.
1.3 The headings in this Agreement do not affect its interpretation.
1.4 In this Agreement, the words "include", "includes" and "including" are to
be construed as if they were immediately followed by the words "without
limitation".
1.5 Any statement in this Agreement which refers to "so far as the Seller is
aware" or any similar expression shall be limited to the awareness which
the Seller and/or Xxxxx Xxxxxxxxx (the company secretary of Gremlin Group
Plc) actually has.
2 AGREEMENT TO BUY AND SELL AND PRICE
2.1 The Seller agrees to sell with full title guarantee and the Buyer agrees
to buy the Sale Share and each right attaching or accruing to the Sale
Share on or after the date of this Agreement, free of any option, claim
or Encumbrance.
2.2 Subject to clause 2.3 below, as consideration for the Sale Share the
Buyer agrees to pay the Seller the sum of (pound)1 (receipt of which is
hereby acknowledged) and to procure that at Completion the Company repays
(or to repay on behalf of the Company) the (pound)3,251,703 owed by the
Company to the Seller pursuant to the loan created under the First Share
Sale Agreement, provided that all other indebtedness owed by the Company
or the Subsidiary to any Seller's Group Company shall be dealt with in
accordance with clause 6.
2.3 The Seller shall reimburse to the Buyer out of the amount paid under
clause 2.2 (for itself and acting as trustee for the Company) the amount
(if any) by which the Net Asset Value (as determined in accordance with
clauses 2.4 and 2.5 below) is below (pound)-3,500,000 (negative three
million five hundred thousand) less X (where X is (pound)500,000 less the
amount of any Claims (other than Uncapped Claims or a Claim in respect of
the indemnity in clause 9.1.1 or the warranty in clause 4.2.10) which
have been finally determined against the Seller). For the avoidance of
doubt no reimbursement shall be made of the consideration paid until the
amount by which the Net Asset Value is below (pound)-3,500,000 (negative
three million five hundred thousand) when aggregated with all Claims
(other than Uncapped Claims or a Claim in respect of the indemnity in
clause 9.1.1) which are finally determined against the Seller exceeds
(pound)500,000, in which event a reimbursement shall be made only in
respect of the excess over (pound)500,000.
2.4 For the purposes of this clause 2, "Net Asset Value" shall mean the
amount paid up or credited as paid up on the issued share capital of the
Subsidiary plus the reserves of the Subsidiary plus the retained earnings
of the Subsidiary (or less the amount standing to the debit of the profit
and loss account of the Subsidiary) less any amount included in the above
which is attributable to minority interests, goodwill assets and/or other
intangible assets in each case as at the date of Completion and as
finally determined in accordance with clause 2.5.
2.5 For the purpose of determining the amount of the Net Asset Value:
2.5.1 The Seller shall as soon as practicable following Completion (and
in any event on or before 13 October 1999) deliver to the Buyer
draft Completion Accounts prepared by the Seller (together with
copies of all working papers relating to the preparation of the
draft Completion Accounts). In order to prepare the draft
Completion Accounts the Buyer shall (and shall procure that the
Subsidiary shall) give all such reasonable assistance, documents,
information and access to premises and personnel of the Subsidiary
as the Seller shall require in order to prepare the draft
Completion Accounts in the time required. Such draft Completion
Accounts will:
(a) comprise a pro forma balance sheet and statement of income
in respect of the Subsidiary;
(b) be in respect of the period from 30 June 1999 to the date
of Completion; and
(c) be prepared using the same accounting policies as, on the
same basis as and in all respects in a manner consistent
with the audited accounts of the Subsidiary for the period
to 30 June 1999 (the "Audited Accounts").
2.5.2 The Buyer shall raise no dispute in relation to the value of work
in progress (relating to computer games in development) in the
Audited Accounts (such figure being(pound)816,044) and
acknowledges and accepts that the value of "work in progress"
(relating to computer games in development) which will appear in
the pro forma balance sheet of the Completion Accounts shall be
calculated from such figure using the same accounting policies as,
on the same basis as and in all respects in a manner consistent
with the Audited Accounts (provided that account shall be taken of
(pound)200,000 in respect of the sale by the Subsidiary of rights
in the Assigned Games) and no dispute shall be raised and no
adjustment shall be made to that amount in determining the Net
Asset Value in accordance with this clause 2.5. The Buyer also
agrees that no provision shall be made or any amount accounted for
in the Completion Accounts for any Tax Liability arising or which
may arise in connection with the waiver on 2 August 1999 by
Gremlin Group PLC of an amount of(pound)3,871,000 owing by the
Subsidiary to Gremlin Group PLC for the purposes of the
calculation of the Net Asset Value and without prejudice to the
Buyer's rights (but subject to its obligations) under the Tax
Deed.
2.5.3 Following receipt of the draft Completion Accounts from the
Seller, the Buyer shall be entitled to examine these with a view
to agreeing the Seller's calculation of the Net Asset Value. The
calculation of the Net Asset Value and Completion Accounts
prepared by the Seller shall be final and binding upon the parties
to this Agreement unless, prior to the expiry of 45 days following
their delivery to the Buyer, the Buyer serves notice on the Seller
stating that it wishes to dispute the same giving a detailed
written explanation of its grounds for wishing to do so and
incorporating any adjustment which the Buyer would wish to be made
to the draft Completion Accounts and its own calculation of the
Net Asset Value.
2.5.4 If a dispute is raised by the Buyer as to the draft Completion
Accounts and/or the Net Asset Value and such dispute is not
settled by agreement between the Buyer and the Seller within 30
days after the Buyer notifies the Seller of the dispute pursuant
to sub-clause 2.5.3 above, then either the Seller or the Buyer
may instruct an independent firm of chartered accountants (the
"Independent Accountants") appointed by agreement or in default of
agreement by the President of the Institute of Chartered
Accountants of England and Wales (acting as experts and not as
arbitrators) to determine the dispute in question (having regard
to the criteria for determining Net Asset Value in clauses 2.4 and
2.5) within 30 days of such instruction and the determination of
such firm (whose costs shall be borne as such firm shall direct or
(in default of direction) by the parties in equal proportions)
shall be final and binding on the parties in all circumstances and
each of the parties shall on request promptly supply to the Seller
or the Buyer (or their respective professional advisers) and the
Independent Accountants (as appropriate) all such assistance,
documents and information as they may respectively require for the
purpose of the determination pursuant to Clause 2.5.4 and the
parties shall use all reasonable endeavours to procure the due and
prompt determination of the Net Asset Value and finalisation of
the Completion Accounts.
2.6 The Buyer must pay (or procure the Company to pay, as the case may be)
the amount due under clause 2.2 as may be adjusted in accordance with
clause 2.3 in cash by telegraphic transfer to the following bank account
(or to such other account as the Seller may direct):
Account bank and branch: Societe Generale Lyon Entreprises Bank
Bank code: 30003
Agency code: 02280
Account name: Infogrames Entertainment SA
Account no: 00078014698
2.7 There is no clause 2.7
2.8 There is no clause 2.8
2.9 There is no clause 2.9
2.10 There is no clause 2.10
2.11 The Seller will procure that prior to Completion the overdraft of the
Subsidiary held at the National Westminster Bank plc is reduced to an
amount that is not more than (pound)3,988,905 and the Seller shall fully
and effectively indemnify the Buyer (for itself and as trustee for the
Company or the Subsidiary and their respective officers, directors and
employees) against any and all loss, damage or liability (and all costs,
charges, interest, fines, penalties and expenses relating to such loss,
damage or liability) as a result such overdraft exceeding
(pound)3,988,905 at the date of Completion.
3 COMPLETION
3.1 Completion must take place at the offices of Garretts at 000 Xxxxxx,
Xxxxxx XX0X 0XX immediately after execution of this Agreement when:
3.1.1 the Buyer must:
(a) pay (or procure payment of) the amounts due under clauses
2.2, 6.6, 6.7 and 6.8; and
(b) give or make available to the Seller the items listed in
schedule 1;
3.1.2 the Seller must give or make available to the Buyer the items
listed in schedule 2;
3.1.3 the Seller must procure that a meeting of the board of directors
of the Company takes place at which the directors resolve to:
(a) approve for registration the transfer of the Sale Share to
the Buyer or its nominee(s) and the entry of the
transferee(s) in the register of members of the Company
(subject to the production of a properly stamped transfer);
(b) change the Company's registered office to Hogarth House,
00-00 Xxxxx Xxxxxx, Xxxxxxx;
(c) revoke all existing mandates for the operation of the bank
accounts of the Company and replace them with new mandates
as required by the Buyer;
(d) change the Company's accounting reference date to 31
October;
(e) accept the resignations of Xxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxx
Xxxxxxxx, Xxxx-Xxxxx Dura and Xxxxx Xxxxxxx as directors
and Xxxx Xxxxxxxxx as secretary which have been provided in
the agreed form and appoint Xxxxx Xxxxxx and Xxxxx Xxxxxx
as directors and Xxxxx Xxxxxx as secretary with effect from
the end of the meeting;
(f) acknowledge that Deloitte, Touche, Tohmatsu had not yet
formally acknowledged their appointment as auditors of the
Company and could not therefore resign and to appoint
PricewaterhouseCoopers as auditors of the Company at a
remuneration to be agreed and subject to their consent; and
3.1.4 immediately after the board meeting of the Company has taken
place, the Seller must ensure that a meeting of the board of
directors of the Subsidiary takes place at which the directors
resolve to:
(a) change the Subsidiary's registered office to Hogarth House,
00-00 Xxxxx Xxxxxx, Xxxxxxx;
(b) revoke all existing mandates for the operation of the bank
accounts of the Subsidiary and replace them with new
mandates as required by the Buyer;
(c) change the Subsidiary's accounting reference date to 31
October;
(d) accept the resignations of Xxxxx Xxxxx-Xxxxx, Xxx Xxxxxxx
and Xxxxx Xxxxxxxx Xxxxxxx, Xxxx-Xxxxx Xxxx and Xxxxxx
Xxxxx as directors and Xxxxx Xxxxxxxxx as secretary and
which have been provided in the agreed form appoint Xxxxx
Xxxxxx and Xxxxx Xxxxxx as directors and Xxxxx Xxxxxx as
secretary with effect from the end of the meeting; and
(e) accept the resignation of Xxxxxxx Xxxx Xxxxxx as auditors
and appoint PricewaterhouseCoopers as auditors at a
remuneration to be agreed and subject to their consent.
3.2 The Seller shall not be obliged to complete this Agreement unless the
Buyer complies fully with the requirements set out in clause 3.1.1 above
or any such requirements are waived by the Seller.
3.3 The Buyer shall not be obliged to complete this Agreement unless the
Seller complies fully with the requirements set out in Clauses 3.1.2 to
3.1.4 above or any such requirements are waived by the Buyer.
3.4 The Seller shall (and shall procure that any other Seller's Group Company
or their respective professional advisers shall) on, and at all times
after Completion, execute and do all such deeds, documents, acts and
things as the Buyer shall reasonably require at or after Completion for
assigning to or vesting in the Buyer or its nominees the full beneficial
ownership of, and legal title to, the Sale Share, and for giving full
effect to this Agreement.
4 WARRANTIES
4.1 The Seller and the Buyer each warrant to the other that:
4.1.1 it has all necessary power and authority to execute and deliver,
and to perform all its obligations and exercise all its rights
under, this Agreement and all documents to be executed by it under
this Agreement, and that such execution, delivery, performance of
obligations and exercise of rights have been duly authorised by
all necessary corporate action; and
4.1.2 this Agreement has (and all documents to be executed by it under
this Agreement have) been duly executed by a duly authorised
representative of the Seller or the Buyer (as the case may be) and
constitute(s) the valid and binding obligations of the Seller or
the Buyer (as the case may be).
4.2 The Seller warrants to the Buyer that as at Completion:
4.2.1 the information in respect of the Company and the Subsidiary set
out in the section headed "Background" above is true, complete and
accurate;
4.2.2 the Seller is the sole legal and beneficial owner of the Sale
Share and the Company is the sole legal and beneficial owner of
the Subsidiary Share;
4.2.3 the Sale Share and the Subsidiary Share have been properly
allotted and issued and are fully paid or credited as fully paid;
4.2.4 there is no Encumbrance, and there is no agreement, arrangement or
obligation to create or give an Encumbrance, in relation to the
Sale Share or the Subsidiary Share and no person has claimed to be
entitled to an Encumbrance in relation to either of them;
4.2.5 other than this Agreement, there is no agreement, arrangement or
obligation requiring the transfer, redemption or repayment of, or
the grant to any person of the right (whether conditional or
unconditional) to require the transfer, redemption or repayment of
the Sale Share or the Subsidiary Share (including an option or
right of pre-emption or conversion);
4.2.6 the Sale Share comprises the entire issued share capital of the
Company and the Subsidiary Share comprises the entire issued share
capital of the Subsidiary and there is no agreement, arrangement
or obligation requiring, constituting or effecting the allotment,
issue or transfer of any additional securities (including loan
capital) of the Company or the Subsidiary (including an option or
right of pre-emption);
4.2.7 so far as the Seller is aware, the schedule of employees of the
Subsidiary produced by the Seller at Completion contains a full
and accurate list of all of the employees of the Subsidiary as at
31 August 1999 and full and accurate details of the salary
payments made to those employees on that date;
4.2.8 other than the indebtedness owed by the Company to the Seller as
created by the First Share Sale Agreement and the obligations of
the Company under the power of attorney granted to Ocean Holdings
Limited under clause 4.1.1(c) of the Second Share Sale Agreement,
the Company has no Liabilities other than shareholder funds;
4.2.9 other than the Reorganisation, the signing of the lease of the
Edinburgh office of the Subsidiary by the Subsidiary and the
arrangements entered into at or about the time of Completion and
which are listed in any of the schedules 1, 2 or 3, since 30 June
1999, so far as the Seller is aware, the Subsidiary has been
operated and its business conducted in the ordinary course of
business; and
4.2.10 so far as the Seller is aware, there has been no sale, transfer or
other disposition (other than by way of security to a bank which
has been fully discharged or other security granted solely for the
benefit of the Subsidiary) by the Subsidiary of any rights it had
to receive any income (whether by royalty or otherwise) in respect
of the exploitation of the video games known as "Grand Theft Auto"
and "Grand Theft Auto 2" and any products or merchandise derived
from those video games.
4.3 Each party acknowledges that the other is entering into this Agreement in
reliance on each warranty given by that party in clause 4.
5 USE OF NAMES ETC.
5.1 The Buyer unconditionally and irrevocably agrees with and undertakes to
the Seller (acting for itself and as trustee for each other Seller's
Group Company) to procure that the Company and the Subsidiary (and their
respective directors, officers, employees and agents) will, without cost
to any Seller's Group Company:
5.1.1 as soon as possible (and in any event within one month) after
Completion, remove from all letterhead, business cards and other
stationery, circulars and advertisements and on any signs or on
any other assets used by the Company or the Subsidiary (or any of
their respective agents) all references to;
5.1.2 with effect from Completion, not use or carry on business under,
or seek to register or acquire any right, title or interest in or
to, any xxxx, logo, name, symbol or device which is similar to or
which may be confused with that of;
5.1.3 with effect from Completion, otherwise represent or hold
themselves out as being in any way connected with;
the Seller or any other Seller's Group Company and its and their
respective marks, logos, names, symbols or devices (excluding for the
avoidance of doubt the Subsidiary's name, logos and marks).
5.2 The Seller unconditionally and irrevocably agrees with and undertakes to
the Buyer (acting for itself and as trustee for the Company and the
Subsidiary) to procure that each Seller's Group Company (and their
respective directors, officers, employees and agents) will, without cost
to any Buyer's Group Company:
5.2.1 as soon as possible (and in any event within one month) after
Completion, remove from all letterhead, business cards and other
stationery, circulars and advertisements and on any signs or on
any other assets used by any Seller's Group Company (or any of
their respective agents) all references to;
5.2.2 with effect from Completion, not use or carry on business under,
or seek to register or acquire any right, title or interest in or
to, any xxxx, logo, name, symbol or device which is similar to or
which may be confused with that of;
5.2.3 with effect from Completion, otherwise represent or hold
themselves out as being in any way connected with;
the Company and the Subsidiary and their respective marks, logos, names,
symbols or devices.
6 TERMINATION OF CERTAIN FINANCIAL OBLIGATIONS
6.1 Subject to the other provisions of this Agreement, the Seller
unconditionally and irrevocably agrees with and undertakes to the Buyer
(acting as trustee for the Company and the Subsidiary) as soon as
possible (and in any event within one month of the Seller becoming aware)
after Completion to:
6.1.1 release and discharge (or procure the release and discharge of as
and when such become known to the Seller) the Company and the
Subsidiary from; and
6.1.2 waive (or procure the waiver of) all rights against the Company
and the Subsidiary arising from or in relation to;
each liability, obligation and undertaking of any nature whatsoever
(whether actual or contingent and whether due for payment or not), which
the Company and/or the Subsidiary owe(s) or has or have before or at
Completion to:
(a) a Seller's Group Company (except for the amounts owed by the
Company to the Seller as created by the First Sale Agreement);
and/or
(b) any other person (each a "Seller's Security Beneficiary"):
(i) for the benefit of; or
(ii) in respect of a liability, obligation or undertaking of any
nature whatsoever (whether actual or contingent) of,
a Seller's Group Company,
without any provision or consideration for such release, discharge or
waiver by the Company or the Subsidiary.
6.2 Without in any way affecting clause 6.1, the Seller agrees to pay the
Buyer (acting for itself and as trustee for the Company and the
Subsidiary) on demand an amount equal to the amount of each loss,
liability and cost suffered or incurred by the Company or the Subsidiary
with effect from or after Completion because of or in relation to a
liability, obligation or undertaking of any nature whatsoever which the
Company or the Subsidiary owes or has before or at Completion to any
Seller's Group Company, and/or a Seller's Security Beneficiary.
6.3 Subject to the other provisions of this Agreement and to the extent
permitted by law, the Buyer unconditionally and irrevocably agrees with
and undertakes to the Seller (acting for itself and as trustee for each
other Seller's Group Company) as soon as possible (and in any event
within one month of the Buyer becoming aware) after Completion to:
6.3.1 release and discharge (or procure the release and discharge of as
and when such become known to the Buyer) each Seller's Group
Company from; and
6.3.2 waive (or procure the waiver of) all rights against each Seller's
Group Company arising from or in relation to,
each liability, obligation or undertaking of any nature whatsoever
(whether actual or contingent and whether due for payment or not), which
that Seller's Group Company owes or has before or at Completion to:
(a) the Company and/or the Subsidiary; and/or
(b) any other person (each a "Buyer's Security Beneficiary"):
(i) for the benefit of; or
(ii) in respect of a liability, obligation or undertaking of any
nature whatsoever (whether actual or contingent) of,
the Company and/or the Subsidiary in respect of the business of
the Company and/or Subsidiary as conducted immediately after
Completion, including:
(1) the guarantee granted to Take Two Interactive Software,
Inc. by Gremlin Group plc (Company No. 3216645) in support
of the obligation of the Subsidiary to develop the game
Grand Theft Auto 2 under the agreement dated 22 May 1998
(as amended);
(2) the guarantee granted by Gremlin Group PLC in support of
the obligations of the Subsidiary to The East Old Dock
Company Limited (registered no. 135999) under the Missives
of Lease of Second Floor Office Accommodation, Building 1,
Commercial Quay, 00 Xxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx XX0
0XX dated 2 September 1999 among those parties;
(3) the guarantee granted by Gremlin Holdings Limited
(registered no. 3049932) in support of the obligations of
the Subsidiary to Xxxxx Xxxx under the sublease of the Unit
2.7 Discovery House, Lindsay V, Lindsay Court, Dundee dated
1 October 1997 among those parties; and.
(4) the guarantees and security granted by the Seller's Group
Companies to the National Westminster Bank plc in respect
of the financial obligations of the Company and the
Subsidiary;
without any provision or consideration for such release discharge or
waiver by such Seller's Group Companies.
6.4 Without in any way affecting clause 6.3, the Buyer agrees to pay the
Seller (acting for itself and as trustee for each other Seller's Group
Company) on demand an amount equal to the amount of each loss, liability
and cost suffered or incurred by each Seller's Group Company with effect
from or after Completion because of or in relation to a liability,
obligation or undertaking of any nature whatsoever which the Seller's
Group Company owes or has before or at Completion to the Company and/or
the Subsidiary, and/or a Buyer's Security Beneficiary.
6.5 For the avoidance of doubt, nothing in this clause 6 affects the
obligation of the Company to repay the loan to the Seller created by the
First Share Sale Agreement which will be satisfied by the obligation of
the Buyer under clause 2.2 to procure that the Company repays to the
Seller the amounts set out in clause 2.2 (provided that the Seller
undertakes to the Buyer (for itself and as trustee for the Company) that
following such payments, the Company shall have no further indebtedness
to the Seller) or any of the other payments set out in this clause 6 or
any of the obligations assumed by the parties under the IPR Assignments
or any of the agreements entered into at or about the time of Completion
and which are listed in any of schedules 1, 2 and 3, and nor does
anything in this clause 6 affect any agreement or arrangement entered
into after execution of this Agreement. 6.6 The Buyer undertakes to the
Seller (for itself and as trustee for each Seller's Group Company) that
the Buyer will procure that the Subsidiary will pay (or the Buyer will
itself pay on behalf of the Subsidiary) (pound)250,000 (representing the
balance of inter company payables and receivables between the Subsidiary
and Gremlin Interactive Limited) to Gremlin Interactive Limited and such
amount shall be payable at Completion.
6.7 The Buyer undertakes to the Seller (for itself and as trustee for each
Seller's Group Company) that the Buyer will at Completion pay the
(pound)249,532 owed by the Buyer to Gremlin Interactive Limited and the
Buyer (as agent for the Subsidiary) acknowledges that the 80%
contribution payment (in consideration for development work carried out
by the Subsidiary on the game "Wild Metal Country") payable by Gremlin
Interactive Limited to the Subsidiary in connection with "Wild Metal
Country" (which would otherwise be payable out of the $400,000 payment)
has already been paid to the Subsidiary in full and final settlement of
any and all amounts payable by Gremlin Interactive Limited to the
Subsidiary in respect of "Wild Metal Country".
6.8 The Buyer undertakes to the Seller (for itself and as trustee for each
Seller's Group Company) that the Buyer will procure that the Subsidiary
will pay (or the Buyer will itself pay on behalf of the Subsidiary) the
fees payable by the Subsidiary to Gremlin Interactive Limited under the
Secondment Agreement.
6.9 For the avoidance of doubt, except in respect of the Secondment
Agreement, the Seller (for itself and as agent for each Seller's Group
Company) acknowledges and agrees that the Buyer and each Buyer's Group
Company shall be released fully and finally from any and all obligations
of any kind to any Seller's Group Company whether past or future in
relation to the interactive entertainment products known as "Grand Theft
Auto" and "Grand Theft Auto 2" and all other products and merchandise
derived from such products.
6.10 If any Seller's Group Company becomes aware of any matter which is
reasonably likely to give rise to a claim against the Buyer under the
indemnities in this clause 6, the provisions of paragraph 4 of schedule 4
shall, mutatis mutandis, apply to such claim.
6.11 If any Buyer's Group Company becomes aware of any matter which is
reasonably likely to give rise to a claim against the Seller under the
indemnities in this clause 6, the provisions of paragraph 4 of schedule 4
shall, mutatis mutandis, apply to such claim.
7 CONFIDENTIALITY
7.1 Subject to clause 7.2 and clause 8, each party must treat as strictly
confidential all information received or obtained as a result of entering
into or performing this Agreement or otherwise obtained, including all
information which relates to:
7.1.1 the negotiations relating to this Agreement or any document
referred to in this Agreement; or
7.1.2 the provisions or subject matter of this Agreement or any document
referred to in this Agreement; or
7.1.3 in the case of the Seller, each Buyer's Group Company, and, in the
case of Buyer, each Seller's Group Company and, in each case,
their respective businesses, including future projects, business
development and planning, commercial relationships and
negotiations, and financial and tax affairs.
7.2 A party may disclose information which would otherwise be confidential if
and to the extent:
7.2.1 required by the law of any relevant jurisdiction or for the
purposes of any judicial proceedings; or
7.2.2 required by any recognised securities exchange or by any
regulatory or governmental body to which either party is subject
or submits; or
7.2.3 the information is disclosed on a strictly confidential basis to
that party's professional advisers, auditors or bankers for the
purpose of advising that party in connection with this Agreement;
or
7.2.4 the information is disclosed to a director, officer or employee of
a Buyer's Group Company or Seller's Group Company (as the case may
be) whose function requires him to have the information; or
7.2.5 the information has come into the public domain otherwise than
through a fault of that party; or
7.2.6 the other party has agreed to the disclosure in writing;
but a party may only disclose under clauses 7.2.1 and 7.2.2 after
consultation (where practical) with the other party.
8 ANNOUNCEMENTS
8.1 Subject to clause 8.2, neither the Seller nor the Buyer may make or issue
at any time any announcement, circular or other publicity relating to any
matter referred to in this Agreement without the other party's prior
written approval to the form and content of the announcement.
8.2 Clause 8.1 does not apply to any announcement, circular or other
publicity required by the law of any relevant jurisdiction or by the
rules or regulations of any recognised securities exchange or of any
regulatory or governmental body to which either party is subject or
submits. In such an event, the party making or sending the announcement,
circular or other publicity must, as far as practical, consult with the
other party as to the form and content of the announcement.
9 SELLER'S INDEMNITY
9.1 The Seller will at all times indemnify and hold the Buyer (for itself and
acting as trustee for the Company and the Subsidiary and their respective
officers, directors and employees) each an "Indemnified Person", fully
and effectively indemnified against any and all loss, damage or Liability
(and all costs, charges, interest, fines, penalties, reasonable
professional fees and expenses incidental or relating to or arising in
connection with any such loss, damage or liability) suffered by an
Indemnified Person (whether or not foreseeable or contemplated) and
arising as a result of or in connection with the following:-
9.1.1 the Assigned Games; and/or
9.1.2 the Reorganisation (other than in respect of obligations and
liabilities expressly assumed by the Company or the Subsidiary in
the IPR Assignments or the First and Second Share Sale
Agreements); and/or
9.1.3 any breach of the warranty in clause 4.2.8; and/or
9.1.4 any breach of warranty in clause 4.2.9.
9.2 For the avoidance of doubt no Claim under Clause 9.1 shall be made by the
Buyer in respect of any Tax Liability, any Claim in respect of any Tax
Liability shall be made under the Tax Deed.
10 LIMITATIONS ON SELLER'S LIABILITY
10.1 The Seller's liability for Claims shall be limited or excluded (as the
case may be) as set out in Schedule 4 and conduct in respect of any
Claims shall be governed by Schedule 4.
10.2 Any payment made by the Seller to the Buyer pursuant to any claim under
this Agreement shall be treated as a reduction in the consideration
11 TAX DEED AND TAXATION
11.1 The provisions of the Tax Deed shall apply in relation to Tax and any Tax
Liabilities.
11.2 The Buyer shall procure that, following Completion, the Company and/or
the Subsidiary (as the case may be) co-operates promptly and fully with
any reasonable request of the Seller in respect of any accounting period
of the Company and/or the Subsidiary (as the case may be) ended on or
before Completion or the accounting period current at Completion to make
such claims or elections as directed by the Seller in respect of:
11.2.1 group relief (as defined in section 402 ICTA); and/or
11.2.2 advance corporation tax under section 240 ICTA; and/or
11.2.3 tax refunds under section 102 Finance Xxx 0000;
provided that the Buyer shall not be obliged to procure the surrender of
any Relief (as defined in the Tax Deed) which has been included as an
asset in or taken into account in computing any provision for Tax or
deferred Tax in the Completion Accounts which is reflected in Net Asset
Value (as defined in clause 2).
11.3 If the amount of the Net Asset Value takes account of amounts received or
receivable in respect of any surrender of any Relief by the Company or
the Subsidiary and the Company or the Subsidiary shall not receive such
amount, or such amount shall be liable to be repaid then, to the extent
so taken into account, the Seller shall on demand pay to the Buyer an
amount equal to the amount not received or the amount liable to be
repaid.
11.4 If the amount of the Net Asset Value takes account of surrenders of
Relief to the Company or the Subsidiary and such Relief is non-existent
or is lost or cancelled, in whole or in part, then the Seller shall on
demand pay to the Buyer an amount equal to the value attributed to such
Relief, or the relevant part thereof, in the computation of Net Asset
Value unless and to the extent that payment has been made under the Tax
Deed.
12 NON-SOLICITATION
12.1 The Seller agrees with the Buyer that, without prejudice to any other
duty imposed by law or equity, neither the Seller nor any Seller's Group
Company will without the prior written consent of the Buyer (which
consent will be withheld only in so far as may be reasonably necessary to
protect the legitimate interests of the Buyer, the Company or the
Subsidiary) either by itself, its employees or agents or otherwise
howsoever, on its own account or in conjunction with or as principal,
partner, director, employee, consultant or agent or otherwise on behalf
of any other person or entity for a period of one year following
Completion, directly or indirectly:
(a) solicit the employment or engagement of any Key Person; or
(b) procure or assist any third party so to solicit any Key Person
(whether or not such person would commit any breach of his
contract with the Company or the Subsidiary) unless such Key
Person had ceased to be employed or engaged by the Company or (as
the case may be) more than 3 months previously.
12.2 The Seller agrees with the Buyer that the restrictive covenants herein
contained are reasonable and necessary for the protection of the value of
the Sale Share and the Company and the Subsidiary and the Seller agrees
that having regard to that fact those covenants do not work harshly on
it.
12.3 While the restrictions aforesaid are considered by the parties to be
reasonable in all the circumstances, it is agreed that if any such
restrictions taken together shall be adjudged to go beyond what is
reasonable in all the circumstances for the protection of the interests
of the Buyer but would be adjudged reasonable if part or parts of the
wording thereof were deleted or amended or qualified or the periods
thereof were reduced then the relevant restriction or restrictions shall
apply with such modification or modifications as may be necessary to make
it or them valid and effective.
12.4 Without prejudice to any other rights or remedies that the Buyer may
have, the Seller acknowledges and agrees that damages alone would not be
an adequate remedy for any breach by the Seller of the provisions of this
clause and that, accordingly, the Buyer shall be entitled without proof
of special damage to the remedies of injunction, specific performance and
other equitable relief for any threatened or actual breach of the
provisions of this clause by the seller.
12.5 Each of the obligations on the Seller contained in the above provisions
of this clause constitutes an entirely separate and independent
restriction on the Seller notwithstanding that they may be contained in
the same sub-clause, paragraph, sentence or phrase.
13 GENERAL
13.1 No provision of this Agreement by virtue of which this Agreement is
subject to registration under the Restrictive Trade Practices Act 1976
(the "RTPA") shall, in the event that this Agreement is registerable but
is not a non-notifiable agreement under the RTPA, take effect until the
day after the date on which particulars of the Agreement have been
furnished to the Director General of Fair Trading pursuant to the RTPA.
For the purposes of this clause, "Agreement" includes this Agreement and
any other relevant agreement or arrangement of which it forms a part.
13.2 No variation of this Agreement is effective unless made in writing and
signed by or on behalf of each party.
13.3 The provisions of this Agreement survive, and are not in any way to be
affected by, Completion, so that, to the extent that they remain to be
performed or are capable of subsisting, they remain in full force and
effect and are binding on, and enforceable by, the parties.
13.4 If any provision of this Agreement is illegal or unenforceable, this does
not affect the enforceability any other provision of this Agreement.
13.5 Either party may assign its rights (but not its obligations) under this
Agreement to any subsidiary undertaking of the relevant party, provided
that if such assignee ceases to be subsidiary undertaking of such party
the assignee shall be required to reassign such rights to a subsidiary
undertaking of the original party.
13.6 No failure to exercise, and no delay in exercising, any right or remedy
in connection with this Agreement operates as a waiver of that right or
remedy. No single or partial exercise of any right or remedy under this
Agreement precludes any other or further exercise of that right or remedy
or the exercise of any other right or remedy. A waiver of any breach of
this Agreement is not to be deemed to be a waiver of any subsequent
breach.
13.7 The rights and remedies conferred upon the parties by this Agreement are
cumulative and are not exclusive of any other rights or remedies provided
by law
13.8 Each party must pay its own costs in relation to the preparation,
negotiation and execution of this Agreement and the transactions of which
it forms part (including, without limitation, the costs of their
respective professional advisers).
13.9 Each party must do and execute, or arrange for the doing and executing
of, each necessary act, document and thing reasonably within its power to
implement this Agreement.
13.10 This Agreement may be executed in any number of counterparts each of
which when executed and delivered is an original, but all counterparts
together constitute the same document.
14 NOTICES
14.1 A notice or other communication to be given under or in connection with
this Agreement must be in writing and delivered personally or sent by
first class post or by air courier or by fax to the party to be served at
its address set out in this Agreement or at another address or to a fax
number which it may from time to time notify to the other party in
accordance with this clause.
14.2 Subject to Clause 14.3 (and in the absence of evidence of earlier
receipt), any notice or other communication is deemed to be served:
14.2.1 if delivered personally, when left at the address of the relevant
party;
14.2.2 if posted first class or sent by air courier, two Business Days
after posting or sending it; and
14.2.3 if sent by fax, when the sender receives a confirmation of a
transmission.
14.3 If a notice or communication is served or deemed served on a day which is
not a Business Day, it is deemed served on the next Business Day.
15 ENTIRE AGREEMENT
15.1 This Agreement (together with the documents referred to in it or executed
at Completion) constitutes the entire and only agreement between the
parties with respect to its subject matter and replaces and extinguishes
all prior drafts, agreements, arrangements, understandings, commitments,
representations, warranties, undertakings and statements (in whatever
form) regarding that subject matter.
15.2 The Buyer acknowledges that no Seller's Group Company (nor any of its
officers, employees, advisers or agents) has made or given (and the Buyer
has not relied on or been induced to enter into this Agreement (or any of
the documents referred to in it or executed at Completion) in reliance
on) any representation, warranty or statement (in whatever form) of any
nature whatsoever in relation to the subject matter of this Agreement
other than the warranties given in clause 4.
15.3 The Buyer hereby irrevocably and unconditionally waives, in the absence
of fraud, any rights which it might otherwise have had to seek to rescind
or terminate this Agreement or to claim damages against the Seller or any
other Seller's Group Company for, or arising out of, any representation
or breach of any warranty not contained in this Agreement.
16 ACCESS TO INFORMATION
16.1 During the period of two years after Completion:-
16.1.1 if any business information Required for the Business of the
Company or the Subsidiary is not in the possession of the Buyer or
readily discoverable by the Buyer but is in the possession or
under the control of or available to any Seller or any other
Seller's Group Company, the Seller shall (provided that the Buyer
meets the Seller's out of pocket expenses) procure that such
business information is provided to the Buyer reasonably promptly
on request; and
16.1.2 if any books or records of any Seller or any other Seller's Group
Company contain business information relating to the Company or
the Subsidiary, the Seller shall (provided that the Buyer meets
the Seller's out of pocket expenses) procure that copies of the
relevant parts of such books or records are given to the Buyer
reasonably promptly on request;
provided that such period shall be extended to six years after Completion
in respect of any such business information or copies of such books or
records which are required by the Company or the Subsidiary to comply
with any law applicable in relation to the business of the Company or the
Subsidiary.
16.2 For the purposes of this clause, "Required for the Business" means any
business information of the Company or the Subsidiary which is or has in
the last 2 years been used in the business of the Company or the
Subsidiary and is needed by the Company or the Subsidiary to carry on its
business in the same manner as it is presently carried on or is needed to
fulfil any of its present contracts, plans or projects in relation to the
business of the Company or the Subsidiary or to comply with any law
applicable in relation to the business of the Company or the Subsidiary.
17 GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
17.1 This Agreement is governed by, and is to be construed in accordance with,
English law.
17.2 The courts of England and the courts of France have jurisdiction to the
exclusion of all other courts to hear and decide any suit, action or
proceedings, and to settle any disputes, which may arise out of or in
connection with this Agreement (respectively, "Proceedings" and
"Disputes") and, for these purposes, each party irrevocably submits to
the jurisdiction of the courts of England and the courts of France.
17.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England or the courts of France being nominated as
the forum to hear and decide any Proceedings and to settle any Disputes
and agrees not to claim that the courts of England or the courts of
France are not a convenient or appropriate forum.
17.4 Process by which Proceedings are begun in England may be served on the
Seller by being delivered to Infogrames United Kingdom Limited, 00 Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx, X0 0XX, marked for the attention of the
Company Secretary and may be served on the Buyer by being delivered to
Take Two Interactive Software Europe Limited, Xxxxxxx Xxxxx, 00-00 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx, marked for the attention of the Managing
Director. This clause 17.4 does not prevent the service of process in any
other lawful manner.
SCHEDULE 1
ITEMS FOR DELIVERY BY THE BUYER AT COMPLETION
1 A copy, certified to be a true copy by a director or secretary of the
Buyer, of a resolution of the Buyer's board of directors (or an
authorised committee of the board) in terms consistent with the warranty
given by the Buyer in clause 4.1.
2 A deed of release in a form satisfactory to the Seller executed by
National Westminster Bank plc in respect of guarantees and security
granted by each Seller's Group Company in support indebtedness of the
Subsidiary.
3 A counterpart duly executed by the Buyer of the Wild Metal Country
Assignment between the Buyer, the Subsidiary and Gremlin Interactive
Limited in the agreed form annexed to this Agreement .
4 Evidence in a form satisfactory to the Buyer that the overdraft of the
Subsidiary has been paid off by the Buyer.
5 A counterpart duly executed by the Buyer of the Tax Deed in the agreed
form annexed to this Agreement.
6 A counterpart duly executed by the Buyer of the Secondment Agreement.
SCHEDULE 2
ITEMS FOR DELIVERY BY THE SELLER AT COMPLETION
1 A duly executed transfer of the Sale Share in favour of the Buyer or as
it directs together with the relevant share certificates for the Sale
Share and the Subsidiary Share (or an indemnity in a form satisfactory to
the Buyer in the case of any missing certificate).
2 A deed of release executed in a form satisfactory to the Buyer by
National Westminster Bank plc in respect of guarantees and any security
granted by the Company and/or Subsidiary in support indebtedness of each
Seller's Group Company.
3 A copy of a letter from National Westminster Bank plc in a form
satisfactory to the Buyer consenting to the pre-sale reorganisation,
notwithstanding the terms of the existing security documentation granted
by any Seller's Group Company.
4 A counterpart duly executed by Gremlin Holdings Limited, the Company and
the Seller of the First Share Sale Agreement in the agreed form annexed
to this Agreement.
5 A counterpart duly executed by the Company and Ocean Holdings Limited of
the Second Share Sale Agreement in the agreed form annexed to this
Agreement together with a copy of the Power of Attorney granted to Ocean
Holdings Limited pursuant to the Second Share Sale Agreement.
6 The waiver signed by Gremlin Group PLC in favour of the Subsidiary
waiving(pound)3,871,000 of inter-company dated 2 August 1999.
7 A counterpart duly executed by the Subsidiary and Gremlin Interactive
Limited of the Wild Metal Country Assignment in the agreed form annexed
to this Agreement.
8 A counterpart duly executed by the Subsidiary and Gremlin Interactive
Limited of the Tanktics Assignment in the agreed form annexed to this
Agreement.
9 A counterpart duly executed by the Subsidiary and Gremlin Interactive
Limited of the Attack/Clan Wars Assignment in the agreed form annexed to
this Agreement.
10 A counterpart duly executed by the Subsidiary and Gremlin Interactive
Limited of the Secondment Agreement.
11 The resignations in the agreed form annexed to this Agreement of the
resigning directors and the secretary from their respective offices in
the Company and the Subsidiary, together with copies of the relative
Companies House Forms 288b.
12 The resignation in the agreed form annexed to this Agreement of Xxxxxxx
Xxxx Xxxxxxx as auditors of the Subsidiary containing a statement under
section 394 of the Companies Act together with evidence that the
statements have been deposited at the registered office of the
Subsidiary.
13 A counterpart duly executed by the Seller of the Tax Deed in the agreed
form annexed to this Agreement.
14 Schedule of employees of the Subsidiary containing details of all
employees of the Subsidiary as at 31 August 1999 and details of salary
payments made to those employees on that date.
15 Copies of the resolutions passed at the Board Meetings referred to in
clauses 3.1.3 and 3.1.4.
16 The statutory books, certificate(s) of incorporation and of incorporation
on change of name of the Company and the Subsidiary.
17 A power of attorney from the Seller granted to the Buyer in respect of
the Sale Share.
SCHEDULE 3
AGREED FORM DOCUMENTS
1 Wild Metal Country Assignment.
2 Tanktics Assignment.
3 Attack/Clan Wars Assignment.
4 First Share Sale Agreement.
5 Second Share Sale Agreement together with the Power of Attorney granted
to Ocean Holdings Limited pursuant to clause 4.1.1(c).
6 Waiver signed by Gremlin Group PLC in favour of the Subsidiary
waiving(pound)3,871,000 of inter-company debt.
7 Secondment Agreement.
8 Letters:
(a) to the Company from each of Xxxxxx Xxxxx, Xxxxxx Xxxxxxxx,
Xxxx-Xxxxx Dura and Xxxxx Xxxxxxx resigning as directors and from
Xxxx Xxxxxxxxx resigning as secretary; and
(b) to the Subsidiary from each of Xxxx-Xxxxx Dura, Xxxxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxxxxx and Xxxxx Xxxxxxxx Xxxxxxx resigning as
directors and from Xxxxx Xxxxxxxxx resigning as secretary.
9 Letter from Xxxxxxx Xxxx Xxxxxx to the Subsidiary resigning as auditors
and containing a statement under section 394 of the Companies Act.
10 Tax Deed to be entered into by the Buyer and the Seller.
11 Power of attorney from the Seller granted to the Buyer in respect of the
Sale Share.
SCHEDULE 4
LIMITATIONS ON SELLER'S LIABILITY
1 LIMITATIONS ON AMOUNT
1.1 The Seller shall not be liable for a Claim unless and until the Seller's
aggregate liability for all such Claims exceeds:
1.1.1 in the case of all Claims (other than Uncapped Claims or a Claim
in respect of the indemnity in clause 9.1.1 or the warranty in
clause 4.2.10); Z (where Z = (pound)500,000 less any amount by
which the Net Asset Value (as determined in accordance with
clauses 2.4 and 2.5) is below (pound)-3,500,000 (negative three
million five hundred thousand) (in which event the Seller shall be
liable only for the excess over and above Z); and
1.1.2 in the case of Uncapped Claims or a Claim in respect of the
indemnity in clause 9.1.1 or the warranty in 4.2.10; (pound)32,500
(in which event the Seller shall be liable only for the excess
over (pound)32,500).
1.2 The Seller's total aggregate liability for all Claims other than Uncapped
Claims is limited to(pound)6,750,000 (including all legal and other
professional costs, fees, charges and expenses of the Seller).
1.3 The Seller's total aggregate liability in respect of Uncapped Claims
shall not be limited by references to any maximum liability.
2 TIME LIMITS FOR BRINGING CLAIMS
2.1 The Seller shall not be liable for a Claim unless it receives from the
Buyer written notice of the Claim (stating in reasonable detail the
matter giving rise to the Claim and the nature and, where practicable,
amount of the Claim):
2.1.1 on or before the sixth anniversary of Completion in respect of a
Claim under the Tax Deed;
2.1.2 on or before 31 January 2001 in respect of any Claim under the
warranty in clause 4.2.9 or the indemnity in clause 9.1.4 or the
warranty in clause 4.2.10;
2.1.3 on or before the first anniversary of Completion in respect of any
Claim under the indemnity in clause 9.1.1; and
2.1.4 on or before the fourth anniversary of Completion in respect of
any other Claim including an Uncapped Claim (other than a Claim
under the Tax Deed).
2.2 Any Claim which has been made against the Seller (and which has not been
previously satisfied, settled or withdrawn) shall be deemed to have been
withdrawn and shall become fully barred and unenforceable on the expiry
of the period of one year commencing on the date on which the Seller
received notice of the Claim in accordance with paragraph 2.1 or in the
case of a Claim based on a contingent liability (which has been notified
to the Seller in accordance with paragraph 2.1), commencing on the date
on which that contingent liability shall have become an actual liability,
unless legal proceedings in respect of the Claim shall have been issued
and served on the Seller.
3 NO LIABILITY IF LOSS IS OTHERWISE COMPENSATED
3.1 Neither the Buyer nor the Company or the Subsidiary shall be entitled to
recover more than once in respect of the same loss.
3.2 No Claim shall be made in respect of any matter to the extent that such
matter has been fully reflected in the calculation of the Net Asset Value
pursuant to clause 2.5.
3.3 The Seller shall not be liable to the extent that the matter giving rise
to the Claim is an amount for which the Company or the Subsidiary
recovers (without damage, loss, liability, expense or prejudice to any
Buyer's Group Company) under any insurance policy held by or in the name
of any Buyer's Group Company.
3.4 Save in the case of a Claim under the Tax Deed nothing in this Schedule 4
shall restrict or limit the Buyer's general obligation at law where
applicable to mitigate any loss or damage which it may suffer as a result
of a matter giving rise to a Claim.
3.5 The Seller shall not be liable for a Claim if and to the extent that:
3.5.1 the Claim is attributable (in whole or in part) to, or is
increased as a result of, the passing or coming into force of, or
any change in, after the date of this Agreement, any law, rule,
regulation, directive, interpretation of the law or any
administrative practice of any government, governmental
department, agency or regulatory body or any increase in the rates
of Tax or any imposition of Tax, in any such case not actually or
prospectively in force at the date of this Agreement; or
3.5.2 save in the case of a Claim under the Tax Deed the Claim arises
directly as a result of an act or omission of a Buyer's Group
Company occurring after Completion where such Buyer's Group
Company knows (or ought reasonably to know) that such act or
omission would give rise to such Claim and is other than (a) in
the ordinary course of business of the Company or the Subsidiary
or (b) pursuant to a legally binding obligation entered into prior
to Completion or (c) with written consent of the Seller; or
3.5.3 it is excluded under Clause 3 of the Tax Deed; or
3.5.4 save in the case of a Claim under the Tax Deed the matter giving
rise to the Claim was allowed, provided for or reserved in the
Completion Accounts or was specifically referred to or taken into
account in the Completion Accounts or in the notes to those
accounts.
4. CONDUCT OF CLAIMS
4.1 If any Buyer's Group Company becomes aware of any matter which is
reasonably likely to give rise to a Claim or upon any Claim being made
other than a Claim under the Tax Deed (to which Clause 6 of the Tax Deed
shall apply) the following provisions shall apply:
4.1.1 the Buyer shall as soon as reasonably practicable give detailed
written notice to the Seller of the matter and shall consult with
the Seller with respect to the matter;
4.1.2 the Buyer shall not make, and shall procure that no other Buyer's
Group Company shall make, any admission of liability in respect of
or compromise or
settle the matter without the prior written consent of the Seller
(such consent not to be unreasonably withheld or delayed);
4.1.3 (subject to the Seller undertaking to maintain the confidentiality
of the same) the Buyer shall make available to the Seller at the
Seller's expense and upon reasonable notice and in such manner as
does not materially disrupt the business of the Buyer or any of
the Buyer's Group Companies, all relevant details documentation
and correspondence in relation to such Claim and by prior
arrangement and during normal business hours permit the Seller to
inspect the relevant accounts, books and records of the Company or
the Subsidiary and to have access to such information as the
Seller may reasonably require in order to investigate fully the
merits of such claim.
4.1.4 the Buyer shall, and shall procure that each Buyer's Group
Company, retains and preserves all relevant assets, documents,
records and information within the power, possession or control of
the Buyer's Group Company relating to the Company and the
Subsidiary which are or are reasonably likely to be relevant in
connection with any Claim for so long as any actual or prospective
Claim remains outstanding;
4.1.5 the Seller shall at its own cost be entitled to copies of any of
the details documentation, correspondence, accounts, books,
records and information referred to in paragraph 4.1.3; and
4.1.6 the Buyer shall and shall procure that each Buyer's Group Company
will at the Seller's expense:
(a) take such reasonable action and institute such proceedings,
and give such information and assistance, as the Seller may
reasonably request to dispute, resist, appeal, compromise,
defend, remedy or mitigate the matter or to enforce against
any person (other than the Seller) the rights of each
Buyer's Group Company in relation to the matter; and
(b) in connection with any proceedings related to the matter
(other than against the Seller) use professional advisers
nominated by the Seller with the approval of the Buyer
(such approval not be unreasonably withheld or delayed);
and in each case on the basis that the Seller shall indemnify the
Buyer and each Buyer's Group Company for all reasonable costs and
expenses properly incurred as a result of any request or
nomination by the Seller.
4.2 Provided that if the Seller does not take any action as aforesaid within
60 days of notice being given to the Seller, the Company, the Subsidiary
or the Buyer shall be free to defend or pay or settle the claim as they
may in their absolute discretion think fit.
4.3 The Seller's rights pursuant to Clause 4.1 are subject to the following:
4.3.1 no failure by the Buyer to give any notice under Clause 4.1 shall
relieve the Seller of any liability under this Agreement;
4.3.2 notwithstanding the Seller's election to appoint professional
advisors to represent the Seller in an action, the Buyer shall
have the right to employ separate professional advisors, and, the
Seller shall bear the reasonable fees, costs and expenses of such
separate professional advisors if (i) the use of professional
advisors chosen by the Seller would present such professional
advisors with a conflict of interest, or (ii) the Seller has not
employed professional adviser in accordance with paragraph
4.1.6(a) within 60 days, or (iii) the Seller shall authorise the
Buyer to employ separate professional advisors at the expense of
the Seller;
4.3.3 the Seller may not exercise its right pursuant to Clause 4.1 if
the Claim (i) is reasonably likely to result in imprisonment of
any officers of the Buyer or any Buyer's Group Company or (ii) is
reasonably likely to result in a criminal penalty or fine against
the Buyer or any Buyer's Group Company;
4.3.4 the Seller shall not and has no authority to (i) settle or
compromise any claim by or against any Buyer's Group Company
without the Buyer's prior written consent (not to be unreasonably
withheld or delayed) or (ii) take any action, or make any omission
which it knows or should reasonably have known would cause the
officers of the Buyer, or any Buyer's Group Company to be in
breach of their fiduciary duties or which would cause the Buyer or
any Buyer's Group Company or any of their respective officers or
employees to be in breach of any law or regulation;
4.3.5 Where any action is taken by the Seller pursuant to this clause,
it shall keep the Buyer fully informed and copied with
correspondence and shall consult the Buyer prior to taking such
action and in so doing shall act in good faith with no damage or
prejudice to the business of the Buyer or any Buyer's Group
Company.
5. RECOVERY FROM THIRD PARTIES
5.1 Save as provided in clause 5.2 where the Seller pays to the Buyer an
amount in respect of any Claim (the "Payment") and the Company or the
Subsidiary or the Buyer (or any other Buyer's Group Company) either
recovers or is entitled to recover (whether by reason of insurance,
payment, discount, credit, relief or otherwise) from a third party any
sum which is referable to a fact, matter, event or circumstance giving
rise to a Claim or obtains relief or other saving or benefit which is so
referable which, in each case, if received prior to the Claim would have
reduced the amount of the Payment, the Buyer shall (or, as appropriate,
shall procure that the Company or the Subsidiary and each Buyer's Group
Company shall):
5.1.1 as soon as reasonably practicable notify the Seller and provide
such information and assistance as the Seller may reasonably
require relating to such right of recovery or such other relief,
saving or benefit and the steps taken or to be taken by the Buyer
or (as the case may be) Buyer's Group Company in connection with
it;
5.1.2 keep the Seller informed of the progress of any action taken and
provide it with copies of all relevant correspondence and
documentation
and if the Buyer, the Company or the Subsidiary receives or obtains such
a payment, relief, saving or benefit, the Buyer shall forthwith repay to
the Seller so much of the Payment as is so reduced and does not exceed
the sum received from the third party (less any reasonable costs incurred
in recovering or obtaining such payment, saving or benefit and any tax
actually suffered (and which is not reclaimable) on such amount).
5.2 This paragraph 5 shall not apply to any matter or Claim falling within
the scope of the Tax Deed.
EXECUTED by the parties
Signed by )
o )
for an on behalf of )
INFOGRAMES ENTERTAINMENT SA )
)
Signed by )
o )
for an on behalf of )
TAKE TWO INTERACTIVE SOFTWARE INC. )
)
