DATED 1999
---------------------------------
TAKE TWO INTERACTIVE SOFTWARE, INC
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THE SELLERS
AGREEMENT
for the sale and purchase of
the share capital L.D.A.
Distribution Limited and such shares in the
capital of Joytech Limited not held by the
Company
HARBOTTLE & LEWIS
Hanover House
14 Hanover Square
London W1R 0BE
INDEX
1. Interpretation........................................................1
2. Agreement for Sale....................................................1
3. Consideration for Shares..............................................2
4. Conditions and Completion.............................................4
5. Rescission............................................................5
6. Representations Warranties and Undertakings...........................7
7. Limitations..........................................................10
8. Restrictions on Sellers .............................................14
9. Obligations of Buyer.................................................21
10. Effect of Completion.................................................22
11. Costs, Expenses and Insurance........................................22
12. Notices..............................................................22
13. Entire Agreement/Variation...........................................22
14. Counterparts.........................................................23
15. Announcements........................................................24
16. General..............................................................24
17. Provision of Group Business Information..............................25
18. Governing Law and Jurisdiction.......................................25
SCHEDULE 1....................................................................27
The Sellers
SCHEDULE 2....................................................................28
Particulars of the Company
SCHEDULE 3....................................................................32
Representations, Warranties and Undertakings
SCHEDULE 4....................................................................61
(The Property)
SCHEDULE 5....................................................................62
Particulars of Inter-Company Loans, Guarantees etc
SCHEDULE 6....................................................................63
Completion Arrangements
SCHEDULE 7....................................................................65
Escrow Agreement
SCHEDULE 8......................................................................
Completion Accounts
SCHEDULE 9....................................................................68
Interpretation
THIS AGREEMENT is made on 1999
BETWEEN:
(1) The shareholders listed in Schedule 1 ("the Sellers");
(2) TAKE-TWO INTERACTIVE SOFTWARE, INC a Delaware company having its office
at 575 Broadway, New York, New York 10012 ("the Buyer" which expression
shall, where consistent with the context used and to the extent
permitted, include its successors in title and assigns).
WHEREAS:
(A) The Sellers are and at Completion will be the legal and beneficial owners
of the entire issued share capital of LDA and all of the issued share
capital of Joytech not legally and beneficially owned by LDA.
(B) The particulars of the Company and the Subsidiaries are set out in
Schedule 2.
(C) The Sellers have induced the Buyer to enter into this Agreement by the
Sellers making the representations and agreeing to warrant and undertake
in the terms of Clause 6 and Schedule 3 and the Buyer has induced the
Sellers to enter into this Agreement by the Buyer agreeing to warrant and
undertake to the Sellers in the terms of Clause 5.
IT IS AGREED as follows:-
1. Interpretation
1.1 In this Agreement and its Schedules the words and expressions defined in
paragraph 1 of Schedule 9 shall, unless inconsistent with the context,
have the meanings set out in such paragraph.
1.2 This Agreement and its Schedules will be construed and interpreted in
accordance with Schedule 9.
1.3 The Schedules form part of this Agreement and will be of full force and
effect as though expressly set out in the body of this Agreement.
1.4 References to any English legal term or concept (including without
limitation any action, remedy, method of judicial procedure, legal
document, statute, court, official or any other legal concept) will in
respect of any jurisdiction other than England be construed as references
to the term or concept which most nearly corresponds to it in that
jurisdiction.
2. Agreement for Sale
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2.1 Subject to the terms of this Agreement each of the Sellers with full
title guarantee shall sell to the Buyer and the Buyer shall purchase the
Shares free from all options, claims and Security Interests with effect
from Completion and together with all rights attached or accruing to them
at Completion.
2.2 Each of the Sellers waives irrevocably any and all rights of pre-emption
in respect of the sale and purchase of the Shares or any of them pursuant
to Clause 2.1.
3. Consideration for Shares
3.1 Subject to Clause 3.4, the total consideration for the sale of the Shares
shall be (i) the payment by the Buyer to the Sellers of (pound)200,000
(allocated in the proportions set out next to each of the Sellers names
in Schedule 1) and payable in 10 equal monthly instalments beginning 5
days after Completion; and (ii) the issue by the Buyer to the Sellers (in
the proportions set out next to each of the Seller's names in Schedule 1)
of 580,000 unregistered shares par value $0.01 of the common stock of the
Buyer (as may be adjusted in accordance with Clauses 3.4 to 3.7 below)
(the "Consideration Shares") to be issued within 5 Business Days
following final determination or agreement of the amount of the Net Asset
Value (as defined below) provided that any Consideration Shares payable
to Interactive Development shall be issued to an escrow agent (the
"Escrow Agent") in accordance with an escrow agreement with regard to
which the parties shall jointly approach six reputable institutions and
shall accept the terms of such institutions as is closest to the form set
out in Schedule 10 (subject to such institution accepting an obligation
to sell the relevant shares on reasonable terms) (the "Escrow
Agreement")to be entered into by the Buyer, Interactive Development and
the Escrow Agent following final determination of any adjustment to the
total consideration in accordance with Clause 3.4 to 3.7 below.
3.2 The proportion of the total consideration to which each Seller is
entitled shall be that proportion set opposite such Seller's name in
Schedule 1.
3.3 The Buyer shall be entitled to set off, or (pending the determination of
the relevant amount) withhold any amounts payable by it after Completion
to the Sellers (save for the (pound)200,000 payable in accordance with
Clause 3.1(i)) against (a) the amount of any Bona Fide Claims by the
Buyer under any Transaction Document and (b) any other sum due to the
Buyer or its Associates by the Sellers or their Associates.
3.4 In the event that Net Asset Value (as defined below) is less than
(pound)850,000 the number of Consideration Shares shall be 580,000 less
such number ("X") calculated in accordance with the following formula:
X = (850,000 - Net Asset Value (as defined below));
-----------------------------------------------
Y
where;
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Y = Completion Price converted into sterling at the Conversion Rate.
For the avoidance of doubt there shall be no adjustment to the number of
Consideration Shares in the event that the Net Asset Value exceeds
(pound)850,000.
3.5 For these purposes "Net Asset Value" shall mean the amount paid up or
credited as paid up on the issued share capital of the Company plus the
consolidated reserves of the Company and the other Group Companies plus
the consolidated retained earnings of the Company and the other Group
Companies (or less the amount standing to the debit of the consolidated
profit and loss account of the Company and the Group Companies, as the
case may be) less any amount included in the above which is attributable
to minority interests, goodwill and/or other intangibles in each case as
at the Completion Accounts Date and determined in accordance with this
Clause 3.
3.6 For the purpose of establishing the amount of the Net Asset Value:-
3.6.1 The Sellers shall procure that as soon as practicable following
Completion (and in any event within 30 days) draft Completion
Accounts are prepared in accordance with the principles set out in
Schedule 8 and (to the extent not inconsistent with such
principles) all relevant SSAPs and generally accepted United
Kingdom accountancy principles.
3.6.2 Forthwith following preparation of the draft Completion Accounts
the Sellers shall deliver to the Buyer and to the Buyer's
Accountants a copy of the draft Completion Accounts.
3.6.3 Following receipt of the draft Completion Accounts the Buyer and
the Buyer's Accountants shall be entitled to examine these with a
view to agreeing the calculation of the Net Asset Value. Such
calculation of the Sellers' shall be final and binding upon the
parties to this Agreement unless, prior to the expiry of 60 days
following their delivery to the Buyer, the Buyer serves notice on
the Sellers stating that it wishes to dispute the same giving (so
far as practical and possible) 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 (or the Buyer's
Accountants') own calculation of the Net Asset Value.
3.6.4 If a dispute is raised by the Buyer as to the draft Completion
Accounts or the Net Asset Value, and such dispute is not settled
by agreement between the Buyer and the Sellers within 30 days
after the Buyer notifies the Sellers of the dispute pursuant to
sub-Clause 3.6.3 above, then either the Sellers or the Buyer may
instruct an independent firm of chartered accountants (the
"Independent Accountants") (acting as experts and not as
arbitrators) appointed by agreement or in default of agreement by
the President of the Institute of Chartered Accountants of England
and Wales to determine the dispute in question 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) equally by the Buyer on
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the one hand and the Sellers on the other hand) shall (in the
absence of fraud or manifest error) be final and binding on the
parties in all circumstances and:
(a) each of the parties shall on request promptly supply to the
Sellers' Accountants, the Buyer's Accountants 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 3.6.4 as appropriate and the parties
shall use all reasonable endeavours to procure the due and
prompt determination; and
(b) for the avoidance of doubt, the provisions of Clause 7 and
the Disclosure Letter shall in no way affect the adjustment
to the number of the Consideration Shares pursuant to
Clause 3.4 - 3.7.
3.7 Within five Business Days following final determination or agreement of
the amount of the Net Asset Value, the Buyer shall in accordance with
Clause 3.1 issue to the Sellers (or to the Escrow Agent as the case may
be) the Consideration Shares as may be adjusted in accordance with Clause
3.5 provided that, where there shall be a dispute as to the Net Asset
Value and the amount disputed is a specific amount, the number of
Consideration Shares that would therefore be unaffected by the final
determination shall be issued as soon as reasonably practicable following
the establishing of the maximum difference of opinion between the Sellers
and the Buyer as to the Net Asset Value.
3.8 The Buyer, Lee Guinchard and David Gillard agree that immediately prior
to the issue of the Consideration Shares in accordance with Clause 3.7
they shall enter into a Registration Rights Agreement in the agreed terms
in respect of 65% (sixty-five per cent) of the Consideration Shares
issued to Lee Guinchard and David Gillard.
4. Completion
4.1 Completion shall take place immediately after signing this Agreement at
the offices of the Buyer's Solicitors. At Completion each of the parties
shall fulfil the obligations imposed upon it by Schedule 6. To the extent
that the parties do not fulfil the obligations set out in Schedule 6 on
Completion they shall use their best endeavours to do so as soon as
practicable following Completion.
4.2 The Buyer shall not be obliged to complete this Agreement unless each
Seller complies fully with the requirements of Schedule 6 so far as they
relate to the Seller in question and, for the avoidance of doubt, the
Buyer shall not be obliged to complete this Agreement unless the purchase
of all the Shares is completed simultaneously in accordance with this
Agreement.
4.3 The Sellers shall not be obliged to sell their Shares to the Buyer unless
the Buyer fulfils its material obligations pursuant to Schedule 6.
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4.4 The Sellers shall (and shall procure that all other necessary parties
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
Shares, and for giving full effect to this Agreement.
4.5 The Sellers shall procure that prior to Completion:
4.5.1 all amounts owing (whether due for payment of not) to the Group by
any of the Sellers or any of the officers of the Company or the
Sellers or any Associate of the Sellers or such officers or any of
them respectively shall have been paid or repaid provided that,
without prejudice to the foregoing, to the extent that any such
amounts owing have not been paid, these shall continue to be due
and payable on demand on and after Completion;
4.5.2 guarantees, indemnities, mortgages, sureties or security
arrangements of any kind given by or binding on the Group
(including any assets of the Group) in respect of any liabilities
or obligations (actual or contingent) of any of the Sellers or any
of such officers or any such Associate shall have been fully and
effectively released without any provision or consideration for
such release by the Group; and
4.5.3 the Group shall be released, without payment by or other cost to
the Group, from all debts and obligations of any kind owed or
outstanding to and from all guarantees, indemnities, mortgages and
surety and security arrangements of any kind given by the Group in
favour of, and all rights of subrogation arising against any of
the Group from, any of the Sellers or any such officers or any
such Associate;
and shall indemnify and keep the Buyer indemnified (as trustee for itself
and on behalf of the Group Companies) from and against any failure so to
procure and from any Liability pending such release.
5. Buyer Warranties
5.1 The Buyer represents and warrants to, and agrees with, the Sellers, as of
the date hereof:
5.1.1 The Buyer is a corporation duly organised, validly existing and in
good standing under the laws of the jurisdiction of the state of
Delaware and has all requisite power and authority to own, lease
and operate its properties and to carry on its businesses as now
being conducted and is duly qualified to do business and is in
good standing in each jurisdiction where the failure to be so
qualified would have a material adverse effect on the Buyer and
its subsidiaries. The Buyer shall deliver to the Sellers within 5
days of this Agreement complete and correct copies of its
certificate of incorporation and bylaws as amended to the date
hereof.
5.1.2 As of the date hereof the authorised capital stock of the Buyer
consists of
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50,000,000 shares of Common Stock, par value $.01 per share
("Common Stock"), and 5,000,000 shares of Preferred Stock, par
value $0.0 per share. At the close of business on 1 February ,
1999, 18,425,924 shares of Common Stock were outstanding.
The shares of Common Stock to be issued to the Sellers pursuant to
this agreement, when issued in accordance with the documents to be
executed and delivered by the Buyer in connection with this
agreement, will be duly authorised, validly issued, fully paid and
nonassessable and issued in compliance with applicable federal and
state securities laws.
5.1.3 The Buyer has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated thereby. The execution and delivery of this
agreement, and the consummation of the transactions contemplated
thereby, have been duly authorised by all necessary corporate
action on the part of the Buyer. This agreement has been duly
executed and delivered by the Buyer and constitutes a valid and
binding obligation of the Buyer enforceable against the Buyer in
accordance with its terms except as enforcement may be limited by
bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally and except that the
availability of equitable remedies, including specific
performance, is subject to the discretion of the court before
which any proceeding therefor may be brought. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated thereby will not, conflict with or
result in any violation of, or default under, or give rise to a
right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under any provision of
the certificate of incorporation or by-laws of the Buyer. No
consent, approval, order or authorisation of, or registration,
declaration or filing with, any federal, state or local
government, or any agency or instrumentality thereof, is required
by or with respect to the Buyer in connection with the execution
and delivery of this Agreement by the Buyer or the consummation by
the Buyer of the transactions contemplated thereby except for
consents, approvals, orders or authorisations which have been
obtained or in respect of which the failure to obtain would not
have a material adverse effect on the Buyer.
5.1.4 The Buyer has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since 1 January
1998, each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended,
and the Securities Exchange Act of 1934, as amended, each as in
effect on the dates such forms, reports and documents were filed.
The Buyer will therefore deliver to the Sellers within 5 days of
this Agreement in the form filed with the SEC (including any
amendments thereto), all reports or registration statements filed
by the Buyer with the SEC (including any amendments thereto),
since 1 January 1998 (the "Buyer SEC Reports"). None of such
forms, reports or documents including, without limitation, any
financial statements or schedules included or incorporated by
reference therein (but excluding exhibits), contained, when filed,
any untrue statement of a material fact
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or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make
the statement therein, in light of the circumstances under which
they were made, not misleading.
5.1.5 The consolidated financial statements of the Buyer included in the
Purchaser SEC Reports comply as to form in all material respects
with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto and fairly
present, in conformity with US generally accepted accounting
principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial
position of the Buyer and its consolidated subsidiaries as of the
dates thereof and their position for the periods ended (subject,
in the case of the unaudited interim financial statements, to
normal year- end adjustments).
During the period commencing on 1 November 1998 and ending on the
date hereof the Buyer is not aware that any event, fact,
condition, circumstance or other development has occurred which
has had or could be reasonably expected to have a material adverse
effect on the results of operations of the Buyer for that period.
5.2 The representations and warranties made in this Clause 5 shall survive
the execution and delivery of this Agreement for a period of one year.
6. Representations Warranties and Undertakings
6.1 The Sellers jointly and severally represent, warrant and undertake
(except in relation to the warranties set out in paragraphs 1.2, 1.4,
1.6, 11.3, 11.4, 11.5, 11.6 and 11.7 of Schedule 3 in relation to which
Lee Guinchard, David Gillard and Interactive Development each severally
represents, warrants and undertakes as to each of themselves only) to the
Buyer:-
6.1.1 in the terms of Schedule 3;
6.1.2 that upon any event occurring or matter arising which results in
any of the Warranties being unfulfilled, untrue, misleading or
inaccurate in any respect at Completion or any breach or
non-fulfilment of any of the undertakings, agreements or
obligations of the Sellers or any of them contained in this
Agreement the Sellers will as soon as reasonably practicable
thereafter notify the Buyer of the same and give details of and,
where requested, investigate fully all relevant circumstances.
6.2 The Warranties contained in this Agreement will each remain in full force
and effect beyond and notwithstanding Completion and are each made
without prejudice to any of the others. Subject to Clause 7, no provision
of this Agreement will limit the extent or application of any Warranty
and although those contained in Schedule 3 are given subject to matters
fairly disclosed in the Disclosure Letter no other information relating
to any Group Company of which the Buyer or any of its advisers has
knowledge (actual or constructive) will prejudice any claim made by the
Buyer under any such Warranties or
- 7 -
operate to reduce any amounts recoverable. Each disclosure in the
Disclosure Letter shall (if it refers to any separate document) identify
such document with a copy of the relevant document being attached to the
Disclosure Letter; any disclosure which fails to comply with the
foregoing requirement in any respect shall not be effective and the
matters stated therein shall be deemed not to be disclosed so that the
Warranties shall continue to have full effect without qualification in
any respect by such disclosure. Notwithstanding the above or any other
provision of this Agreement:-
6.2.1 the Warranties contained in paragraph 1 of Schedule 3 shall not be
or be capable of being qualified or discharged by the Disclosure
Letter, Clause 7 or in any other way; and
6.2.2 the Warranties shall not be or be capable of being qualified or
discharged by the Disclosure Letter, Clause 7 or in any other way
insofar as any Claim arises as a consequence of the fraud or
wilful or negligent misconduct or concealment of the Sellers.
6.3 Subject to the provisions of Clause 7, without restricting the rights of
the Buyer or its ability to claim damages on any basis, provided that the
Buyer agrees to use reasonable endeavours to mitigate its loss in so far
as if such Claim had been brought as a breach of warranty, the amount of
any Claim may be determined as and be deemed to be and the Sellers shall
at all times indemnify and keep fully and effectively indemnified the
Buyer (for itself and at its option on behalf of the Group and its
officers, employees, directors, shareholders, advisors and agents (other
than the Sellers)) from and in respect of:-
6.3.1 the amount of all loss, damage or Liability (and all costs,
charges, interest, fines, penalties and expenses reasonably
incurred in relation to the same (including without limitation all
reasonable expenses of investigations and legal fees and expenses
on a solicitor and own client basis)) suffered by the Buyers Group
and/or the amount of any depletion or diminution in the value of
any assets of the Group in each case suffered or incurred by
Buyers Group as a result of the subject matter of such Claim; or
6.3.2 the amount by which any assets or liabilities of the Group are
respectively less or more than they would have been had the
relevant statement in Schedule 3 been true and not misleading; or
6.3.3 the amount of any decrease in the value of the Shares and of any
other loss or damage suffered or incurred by the Buyer in
consequence of or in relation to the subject matter of such Claim.
6.4 Save as otherwise provided herein and save as regards matters already
disclosed in the Disclosure Letter the rights and remedies of the Buyer
in respect of any breach of the Warranties shall not be affected by
Completion (save that the Agreement shall not be capable of rescission
after Completion), by any investigation made by it or on its behalf into
the affairs of the Company, by its rescinding or failing to rescind this
Agreement or
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by any other event or matter whatsoever. The Buyer hereby warrants and
undertakes to the Sellers that as at the date of this Agreement, it has
not been notified of any matter that it is aware will constitute a breach
of Warranty or claim pursuant to the Deed.
6.5 The accuracy of information supplied by the Group or any of its employees
or agents to the Sellers or their professional advisers prior to
Completion in connection with matters disclosed to the Buyer in the
Disclosure Letter will not be deemed to have been represented, warranted
or guaranteed by the Group and the Sellers hereby waive any and all
claims against the Group or against any of its employees (other than the
Executive Sellers) in respect thereof and assign to the Buyer any rights,
remedies or claims which they may have in respect of any
misrepresentations in, or omission from, any information or advice
supplied or given by any Group Company or its respective officers or
employees and on which reliance has been placed in giving the Warranties
and preparing the Disclosure Letter and the Deed.
6.6 Any liability of the Sellers to the Buyer under this Agreement (including
its Schedules and documents referred to in this Agreement) may be
released compounded or compromised in whole or in part by the Buyer
without in any way prejudicing or affecting its rights against the other
Sellers.
6.7 The Sellers agree that each of the Warranties will apply in relation to
each of the Group Companies as if all references to the Company are to
and include each Group Company.
6.8 If any of the Shares purchased by the Buyer shall at any time be sold or
transferred to any Connected Company (as defined in Clause 16.5), the
benefit of each of the Warranties may be assigned to the purchaser or
transferee of those Shares who shall accordingly be entitled to enforce
each of the Warranties against the Sellers as he were named in this
Agreement as the Buyer provided that if such assignee is to cease to be a
Connected Company it should first assign back to the benefit of the
Warranties to the Buyer or another Connected Company.
6.9 The Sellers will at all times indemnify and hold the Buyer (for itself
and on behalf of the Group and its officers, shareholders, directors,
employees, shareholders and advisors and agents (other than the Sellers))
fully and effectively indemnified against any and all loss, damage or
Liability (and all reasonable costs charges interest fines penalties and
expenses in connection with any such loss damage or liability, including
without limitation, all expenses of investigations and legal fees and
expenses on a solicitor and own-client basis) whether or not foreseeable,
contemplated or avoidable suffered as a result of or in connection with
the following:-
(a) the Company's occupation of the property at 12 Firbank Way,
Chartwell Business Park, Leighton Buzzard, Bedfordshire LU7 8FL to
the extent that any such liability of the Group in respect of such
occupation is not satisfied by the landlord for such property
Chartmore Estates Limited being able to exercise its rights in
respect of the retention of (pound)5000 currently being held by
it;
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(b) any claim made by Sony Computer Entertainment Europe Limited
("Sony") or any subsidiary or holding company of Sony in relation
to any product sold by or for the Group and in existence at
Completion or any element of such products;
(c) in respect of the indemnity provided by the Group to DSG Limited
dated 25 January 1999;
(d) in respect of any dispute between any member of the Group and the
Federation of International Football Associations (or any agent,
affiliate or other authorised representative thereof) with regard
to any memory cards produced by any member of the Group and
bearing World Cup '98 marks, to the extent that the aggregate
liability of the Group in respect of such dispute exceeds
(pound)15000;
(e) the Company not having obtained or secured compliance with any
consent required by the terms of its agreement with Jordan Grand
Prix Limited dated 3 November 1996;
(f) the Company not having obtained or complied with any consent
required by the terms of its lease with Chartmoor Estates Limited
relating to 2 Chartmoor Road and dated 28 August 1998; and
(g) the Company having failed to comply with any of the conditions
required by the terms of its arrangement with GE Capital
Commercial Finance or that arrangement (as set out in a letter
addressed to Lee Guinchard from Trevor Deacon of GE Capital
Commercial Finance dated 19 November 1998) otherwise not having
come into full force and effect.
The provisions of Clauses 7.9-7.11 (inclusive) shall mutatis mutandis
apply to the provisions of this Clause 6.9.
7. Limitations
7.1 The liability of the Sellers in respect of any Claim shall be limited as
follows:
(a) no liability shall arise unless the loss thereby sustained
(together with (i) the aggregate amount of losses sustained or
arising from previous or concurrent Claims (if any); and (ii) any
claims under the Deed (if any) shall exceed (pound)50,000, in
which case any and all such sums shall be liable to be met in
full;
(b) the aggregate liability of the Sellers under the Warranties and
the Deed in respect of all or any Claims against the Sellers
together with any claim or liability pursuant to Clause 6.9 above
and any claims under the Deed shall not exceed the total value of
the Consideration Shares (at the Completion Price) (which shall
exclude the amount of all reasonable costs, charges and expenses
properly incurred by the Buyer in connection with the making or
enforcement of such claims up to (pound)200,000);
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(c) no Claim shall be made by the Buyer or the Company (other than in
respect of (a) those Warranties in sub-paragraphs 1.1 - 1.6 and
1.8 of Schedule 3 or (b) fraud or wilful misconduct or
concealment), unless written notice specifying in reasonable
detail the grounds on which such Claim is based (and so far as
practicable the amount claimed) has been given by the Buyer to the
Sellers on or before:
(i) the date falling 6 months after the date of the second set
of audited accounts for the Group following Completion, in
respect of any breach or alleged breach of the Warranties
(other than those relating to Taxation or set out in (iii)
below) or, if earlier, 31 January 2001; and
(ii) the later of the seventh anniversary of Completion or the
expiry of the relevant statutory period for claims by the
relevant tax authority applicable to non-UK resident
companies, in respect of any breach or alleged breach of
any Warranties relating to Taxation; and
(iii) 4 years from the Completion Date in respect of any breach
or alleged breach of the Warranties set out in paragraphs
7.4 and 7.7 of Schedule 3.
(such dates being the "Claim Dates") and any Claim which has been
made or shall be made before the Claim Date shall (if it has not
been previously satisfied, settled or withdrawn) be deemed to have
been withdrawn and shall become fully barred and unenforceable on
the expiry of the period of six months commencing on the receipt
by the Sellers of notice of the Claim pursuant to Clause 7.1(c)
unless proceedings in respect thereof shall have been commenced
against the Sellers and for this purpose proceedings shall not be
deemed to have been commenced unless they shall have been issued
and served upon the Sellers.
7.2 Notwithstanding Clause 7.1 above, the liability of Interactive
Development shall be limited to the value of the proportion of the
Consideration Shares (at the Completion Price) issued or to be issued to
Interactive Development (or the Escrow Agent) in accordance with this
Agreement set out below:
For Claims made in the following Liability
Number of Years after Completion
up to 1 100%
1-2 70%
2-3 40%
3-7 10%
For the avoidance of doubt, the Buyer shall be entitled to claim against
the remaining Sellers for any part of any Claim (up to the maximum set
out in Clause 7.1 above) which is not recoverable from Interactive
Development in accordance with this Clause 7.2.
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7.3 Interactive Development undertakes that it will not without the written
consent of the Buyer make any distribution, loan or transfer out of the
Consideration Shares paid to it pursuant to this Agreement at any time
after notice shall have been received by it of a Claim or Claims or any
claim or claims under the Deed by the Buyer without first setting aside
and retaining an amount of cash equal to the amount of such Claim or
claim under the Deed or the Buyer's bona fide estimate thereof provided
that such provision shall cease to apply if, within 60 days of notifying
Interactive Development of such Claim or claim under the Deed the Buyer
shall have fulfilled the requirements to make such Claim or claim under
the Deed a Bona Fide Claim.
7.4 Where any loss could give rise to more than one Claim, the Buyer shall
not be entitled to recover more than once for the same loss, so that, in
calculating the amount payable in respect of any claim for breach of any
of the Warranties or any claim under the Deed, account shall be taken of
any amount paid under the Warranties and/or the Deed in respect of the
same loss.
7.5 Subject to the provision of Clause 7.6, the Sellers shall not be liable
for any Claim (other than a claim under the Tax Warranties) if and to the
extent that:
(a) a specific allowance, provision or reserve in respect of any
liability the subject of the Claim was made or taken into account,
or payment or discharge of which was taken into account, in the
Completion Accounts;
(b) any provision for Taxation in the Completion Accounts is an over
provision;
(c) any liability included in the Completion Accounts has been
unconditionally and irrevocably discharged or satisfied below the
amount attributed to it or included in respect of it in the
Completion Accounts;
(d) it is attributable to:
(i) a failure or omission on the part of any Group Company
after Completion to make any claim election, surrender or
disclaimer or the failure or omission after Completion to
give any notice or consent to do any other thing the
making, giving or doing of which in each case was taken
into account in computing the provision or reserve for
Taxation in the Completion Accounts provided that such
failure or omission is otherwise than in the ordinary
course of business of the relevant Group Company or the
Buyer and at the time of such failure or omission the Buyer
was aware or ought reasonably to have been aware that such
failure or omission would give rise to a Claim and provided
that any such action would not unduly prejudice the Buyer
or the Group Company; or
(ii) any claim, election , surrender or disclaimer made or
notice or consent given or any other thing done after
Completion by any Group Company or the Buyer or any person
connected with them (otherwise than in the
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ordinary course of business of the relevant Group Company
or the Buyer) provided that the Buyer was aware or ought
reasonably to have been aware that such claim, election,
surrender or disclaimer made or notice or consent given or
other thing done would give rise to such Claim and provided
that any such action would not unduly prejudice the Buyer
or the Group Company;
(e) it arises as a result of:
(i) the retrospective imposition of Taxation or any increase in
rates of Taxation in each case occurring after Completion
or the withdrawal after Completion of any published
concession or general practice previously made by a Tax
Authority or by a change in the law after Completion
(whether retrospectively or not);
(ii) any change (without the written consent of the Sellers
(such consent not to be unreasonably withheld or delayed))
after Completion in the bases upon which the accounts of
any Group Company are prepared or any change in accounting
or taxation practice, policies or principles provided that
the Buyer was aware or ought reasonably to have been aware
that such change would result in such Claim arising and not
making such change does not unduly prejudice the Buyer or
any Group Company; or
(iii) any change (without the written consent of the Sellers
(such consent not to be unreasonably withheld or delayed))
after Completion in the date to which any Group Company
makes up its Accounts provided that the Buyer was aware or
ought reasonably to have been aware that such change would
result in such Claim arising and not making such change
does not unduly prejudice the Buyer or any Group Company;
(f) the Buyer recovers the proceeds of any insurance policy in respect
of any relevant loss or damage suffered by it (without damage,
loss, liability, expense or prejudice to the Buyer or any Group
Company) under the terms of such insurance policy in force at
Completion;
(g) the liabilities under it is contingent or future in which case the
Sellers shall not be liable to recompense the Buyer until such
time as the Buyer shall actually have suffered loss or incurred
the liability in question.
7.6 The provisions of Clause 3.1 of Clause 3 (Exclusions & Limitations), 5
(Payments received by the Buyer or a Group Company), 6 (Over-provisions
and corresponding savings), 7 (Conduct of Claims) and 11 (Date of
Payment) of the Deed shall apply to claims made under the Taxation
Warranties as if the terms were specifically set out herein and as if
references under the Deed to the "Covenantors" and "Liability to
Taxation" were references to the "Sellers" and "Claim" respectively under
this Agreement.
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7.7 Where the subject matter of the Claim is capable of remedy without Loss,
liability or prejudice to the Buyer's Group, the Sellers shall not be
liable for the Claim if and to the extent that the breach or default is
remedied by them to the reasonable satisfaction of the Buyer within 30
days of receipt by them of the notification of the Claim pursuant to
subclause 7.1(c).
7.8 If the Sellers make any payment ("Payment") in relation to any Claim
(other than a claim under the Tax Warranties) and the Buyer (or the
Company or any company in the Buyer's group) subsequently receives from a
third party any amount or benefit directly as a result of and which would
not have been received but for the circumstances giving rise to, the
subject matter of that Claim, with the result that, if such payment or
benefit had been received prior to the Payment, would have reduced the
amount of the Payment by an amount (the "Reduction") the Buyer shall,
once it or the Company has received such amount or benefit, as soon as
reasonably practicable repay or procure the repayment to the Sellers of
the amount of the lesser of (a) the Reduction (b) such receipt and (c)
the amount paid by the Sellers in relation to such Claim (after deducting
an amount equal to the reasonable costs of the Buyer or the Company
incurred in recovering such sum).
7.9 No party shall have any claim or right of recovery for any breach of a
representation or warranty or covenant or agreement unless written notice
is given in good faith by that party to the other party of the
representation, warranty, covenant or agreement pursuant to which the
claim is made or right of recovery is sought, setting forth in reasonable
detail the specific breach of the representation, warranty, covenant or
agreement, the amount of the claim being made and the basis for that
amount.
7.10.1 Without prejudice to the provisions of Clause 7.1(c) a party seeking
indemnification or making a claim under this Agreement (an "indemnified
party") shall give prompt notice to the party from or against whom
indemnification is sought or the claim is made (the "indemnifying party")
of the assertion of any claim, or the commencement of any action, or
proceeding, in respect of which such indemnity or the claim may be sought
under this Agreement and will give the indemnifying party such
information with respect to such claims as the indemnifying part may
reasonably request, but no failure to give such notice shall relieve the
indemnifying part of any liability under this Agreement (except to the
extent the indemnifying part has suffered actual prejudice as a direct
result of such failure).
7.10.2 The indemnifying party may, at its expense, participate in or assume the
defence of any such action, or proceeding. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnifying party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and, the
indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iii) the indemnifying party
shall authorise the indemnified party to employ separate
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counsel at the expense of the indemnifying party. Whether or not the
indemnifying party chooses to defend or prosecute any claim involving a
third party, all the parties shall at the indemnifying party's cost
reasonably cooperate in the defence or prosecution thereof and shall
furnish such records, information and testimony, and attend at the
indemnifying party's cost such conferences, discovery proceedings,
hearings, trials and appeals, as may be reasonably requested in
connection therewith.
7.10.3 Notwithstanding anything to the contrary in this clause, an indemnifying
party's rights pursuant to this clause are subject to the following:-
(a) No failure by the indemnified party to give any notice under this
Clause 7.10 shall relieve the indemnifying party of any liability
under this Agreement.
(b) An indemnifying party may not exercise its rights pursuant to this
clause unless it admits in writing that the claim is one in
respect of which the indemnified party is entitled to be
indemnified under this Agreement, or, in any event, if the claim
(i) is reasonably likely to result in imprisonment of the
indemnified party, (ii) is reasonably likely to result in a
criminal penalty or fine against the indemnified party the
consequences of which would be reasonably likely to have a
material adverse effect on the indemnified party unrelated to the
size of such penalty or fine, or (iii) is reasonably likely to
result in an equitable remedy which would materially impair the
indemnified party's ability to exercise its rights under this
Agreement, or impair Buyer's right to operate the Companies. The
indemnifying party shall take no action pursuant to this clause
and the Buyer and the Group shall not be obliged to take any
action pursuant to this clause which has any prejudicial effect on
the Buyer or the Group.
The Sellers shall not and have no authority to (i) settle or compromise
any claim by or against the Group without the Buyer's prior written
consent or (ii) take any action, or make any omission which would cause
the officers of the Buyer, or any of the Group to be in breach of their
fiduciary duties or which would cause the Buyer or any of the Group or
any of their respective officers or employees to be in breach of any law
or regulation.
7.11 For any Claim or claim under the Deed or pursuant to Clause 6.9 satisfied
within 1 year following the date of issue of the Consideration Shares a
Seller shall at its option be entitled to settle such Claim or claim
under the Deed or pursuant to Clause 6.9 by the transfer to the Buyer of
Consideration Shares. Each Consideration Share so transferred shall
discharge an amount of a Claim or claim under the Deed or pursuant to
Clause 9 equal to its value at the Completion Price at the Conversion
Rate.
8. Restrictions on Sellers
8.1 As regards the service agreements proposed to be entered into between
Take-Two Interactive Software Europe Limited ("Take-Two Europe") and the
Executive Sellers severally at Completion:
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8.1.1 the Executive Sellers hereby acknowledge that:
(a) it is a term of this Agreement that the said service
agreements are being entered into for the purpose of (inter
alia) protecting the goodwill of the Group; and
(b) accordingly if any Executive Seller shall voluntarily leave
the employment of Take-Two Europe (or such other company in
the Buyer's Group to which his employment is transferred
subsequent to Completion) (the "Employer Company") within 3
years from Completion or if Two-Two Europe or the Employer
Company shall be entitled summarily to determine such
service agreement, the Company and the Buyer will suffer
loss;
8.1.2 if any Executive Seller shall leave the employment of Take Two
Europe prior to the expiry of 6 months from the date of
Completion, such Executive Seller severally undertakes to repay to
the Buyer an amount equal to(pound)726,650; if he shall leave such
employment thereafter the amount repayable shall reduce by
(pound)40,667 for each complete calendar month that he is so
employed after the expiry of the initial 6 month period (which sum
represents the agreed proportion of the total consideration
payable hereunder which is attributable to goodwill), such amount
to be payable within one calendar month after the termination of
the Executive Seller's employment;
8.1.3 nothing in this Clause shall require the Executive Sellers or any
of them to make any payment to the Buyer in circumstances in
which:
(a) the Buyer shall terminate the said service agreement
without good cause; or
(b) the Buyer shall fail to fulfil its material obligations
under this Agreement or any other Transaction Document in
any material respect; or
(c) Take-Two Europe or the Employer Company shall
constructively dismiss the Executive Seller without having
good cause to do so; or
(d) the Executive Seller shall by reason of death, illness or
injury be unable to perform his obligations under the said
service agreement in circumstances which would entitle
Take-Two Europe or the Employer Company to terminate the
same.
8.2 For the purposes of this Clause the following words and expressions shall
have the following meanings:
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"Customer" any person, firm or company who at any
time during the period of two years
immediately prior to the relevant Event
Date was a customer, client or licensee
of the Company or any Relevant Associate
being a person, firm or company with
whom the relevant Seller personally
dealt on behalf of the Company or any
Relevant Associate during the said
period of two years or for whose account
the relevant Seller had overall
responsibility;
"Distribution Business" the business of the marketing,
purchasing, sale, licensing and
distribution of interactive
entertainment software and hardware
products (but excluding the Peripherals
Business);
"the Event Dates" the Completion Date and/or the
Termination Date;
"Key Person" a person who is or was at any time
whilst the relevant Seller was employed
by or a shareholder of the Company:
(a) employed or engaged as an
employee, director or consultant of the
Group or any Relevant Associate; and
(b) a person with whom the relevant
Seller personally dealt during his
employment by or the time he held shares
in the Company; and/or
(c) employed in the capacity of
manager, marketing or sales executive or
in a more senior capacity or who is
reasonably likely to be in possession of
any Confidential Information.
"Period" the period commencing on each of the
Event Dates and ending on the date being
(in the case of the Completion Date)
four years later and (in the case of the
Termination Date) one year from the
Termination Date, save that the purposes
of Clause 8.3.5, such period shall
continue indefinitely;
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"Peripherals Business" the business of the marketing,
purchasing, sale, licensing and
distribution of interactive
entertainment hardware peripherals
(including, without limitation, joypads,
joysticks, steering wheels and memory
cards);
"Prospective Customer" any person, firm or company who has been
engaged in negotiations with the Company
or any Relevant Associate with a view to
purchasing or contracting in relation to
services or goods supplied by the
Company or any Relevant Associate in the
period of 12 months prior to the
relevant Event Date being a person, firm
or company with whom the relevant Seller
personally dealt on behalf of the
Company or any Relevant Associate during
the said period of 12 months or for
whose account the relevant Seller had
overall responsibility;
"Relevant Associate" any member of the Group and/or an
Associate of the Group from time to
time;
"Restricted Business" that part or parts of the Distribution
and/or the Peripherals Business which
competes or compete or is or are about
to compete with that part or parts of
the business of the Company or any
Relevant Associate with which the
relevant Seller was materially involved
or concerned or for which the relevant
Seller was responsible within a two year
period prior to the relevant Event Date;
"Services and/or Goods" any services and/or goods of a kind
supplied by the Company or any Relevant
Associate in the period of two years
immediately prior to the relevant Event
Date and with the supply of which the
relevant Seller was concerned during the
said two year period;
"Supplier" any person, firm or company who at any
time during the period of two years
immediately prior to the relevant Event
Date was a supplier, licensor developer
of the Company or any Relevant Associate
being a person, firm or company with
whom the relevant Seller personally
dealt on behalf of the Group or any
Relevant Associate during the said
period of two years or for whose account
the relevant Seller had overall
responsibility;
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"the Termination Date" the date on which the relevant Executive
Seller's employment with the Company or
any Relevant Associate terminates.
"Territory" means, in relation to Distribution
Business, the UK and France and, in
relation to the Peripherals Business,
Europe.
8.3 Each Seller severally agrees with the Buyer that (other than with regard
to their employment with any member of the Buyer's Group pursuant to
their service agreements), without prejudice to any other duty imposed by
law or equity, neither such Seller nor any Associate of such Seller 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 Group Business)
either by himself, his employees or agents or otherwise howsoever, on his
own account or in conjunction with or as principal, partner, director,
employee, consultant or agent or otherwise on behalf of any other person
for the Period, directly or indirectly:
8.3.1 carry on or assist with or be concerned or interested in the
carrying on of a Restricted Business in the Territory;
8.3.2 in competition with that part or parts of the Company or any
Relevant Associate with which the relevant Seller was involved,
concerned or responsible within a two year period prior to the
relevant Event Date, supply (or procure or assist the supply of)
any Services and/or Goods to any Customer or any Prospective
Customer;
8.3.3 in competition with that part or parts of the Company or any
Relevant Associate with which the relevant Seller was involved,
concerned or responsible within a two year period prior to the
relevant Event Date, canvass or solicit the custom of (or procure
or assist the canvassing or soliciting of the custom of) any
Customer or any Prospective Customer in respect of any Services
and/or Goods;
8.3.4 in competition with the Company or any Relevant Associate:
(a) offer employment to or employ or offer or conclude contract
for services with, canvass or solicit the employment or
engagement of any Key Person; or
(b) procure or assist any third party so to offer, employ,
engage or solicit any Key Person (whether or not such
person would commit any breach of his contract with the
Company or any Relevant Associate) unless such Key Person
had ceased to be employed or engaged by the Company or any
Relevant Associate (as the case may be) more than 3 months
previously;
8.3.5 interfere or seek to interfere with the continuance of supplies to
the Company or
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any Relevant Associate by any Supplier or do or say anything
likely or calculated to lead any person, firm or company to
withdraw from or cease to continue offering to the Company or any
Relevant Associate any goods, services or rights enjoyed by it.
8.4 Each of the Sellers severally agrees with the Buyer that he will not at
any time after either of the Event Dates, whether by himself, his
employees or agents or otherwise howsoever:
8.4.1 engage in any trade or business or be associated with any person
firm or company or permit any person engaged in any trade or
business using the names "LDA" or "Joytech" other trading names
owned or used by the Group or any mark or style thereof or any
name, make, style similar thereto;
8.4.2 in the course of carrying on any trade or business, claim,
represent or otherwise indicate any present association with the
Group or for the purpose of obtaining or retaining any business or
custom claim, represent or otherwise indicate any past association
with the Group;
8.4.3 without the consent of the relevant Company use whether on his own
behalf or on behalf of any third party or divulge to any third
party any Confidential Information;
8.4.4 do or say anything with the intention of harming the reputation of
the Group or any Group Company or do anything which could be
anticipated to lead to any person or Undertaking ceasing to do
business with any Group Company; or
8.4.5 induce, procure or assist any member of the Retained Group to
carry out or undertake any of those activities referred to in
Clause 8.3 or 8.4.
8.5 If the Group shall have obtained any Confidential Information from any
third party under an agreement including any restriction on disclosure
known to him, each of the Sellers severally agrees with the Buyer that he
will not at any time without the consent of the Buyer infringe such
restrictions.
8.6 Each of the Sellers severally agrees with the Buyer that the restrictive
covenants herein contained are reasonable and necessary for the
protection of the value of the Shares and the Company and each of the
Sellers agrees that having regard to that fact those covenants do not
work harshly on him.
8.7 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 or the range of products or area dealt with were
thereby reduced in scope, then the relevant restriction or restrictions
shall apply with such modification or modifications as may be necessary
to
- 20 -
make it or them valid and effective.
8.8 Each of the Sellers hereby severally agrees with the Buyer at the request
of either of the Companies to enter into a direct agreement or
undertaking with any company or companies in the Group whereby he will
accept restrictions and provisions corresponding to the restrictions and
provisions herein contained (or such of them as may be appropriate in the
circumstances) in relation to such products and services and such area
and for such period as such company or companies may reasonably require
for the protection of its or their legitimate interests.
8.9 Without prejudice to any other rights or remedies that the Buyer may
have, the Sellers severally acknowledge and agree that damages alone
would not be an adequate remedy for any breach by any of the Sellers 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 any of the Sellers.
8.10 Each of the obligations on the Sellers contained in the above provisions
of this Clause constitutes an entirely separate and independent
restriction on the Sellers notwithstanding that they may be contained in
the same sub-clause, paragraph, sentence or phrase.
8.11 This Clause shall not preclude the Sellers from holding or acquiring
directly or indirectly not more that 1% in nominal value of the issued
shares or other securities of any class of any other company which are
listed or dealt in on any recognised stock exchange and held by way of
bona fide investment only.
9. Obligations of Buyer
9.1 The Buyer agrees that it shall use all reasonable endeavours to obtain
the release of the Sellers (at the Seller's expense) from the guarantee
obligations details of which are set out below (the "Guarantees") as soon
as reasonably practicable following Completion provided that the Sellers
shall provide all reasonable assistance to the Buyer in obtaining such
release:
Guarantee by Lee Guinchard to National Westminster Bank Plc in respect of
(pound)50,000 owed by the Companies to National Westminster Bank Plc.
9.2 The Buyer indemnifies and shall at all times keep fully indemnified the
Sellers from and in respect of all liability arising after Completion
under the Guarantees.
9.3 The Buyer agrees that on or before March 31, 1999 it shall procure that
the Company shall repay a sum not to exceed (pound)260,000 (plus interest
not to exceed (pound)5000) to Banque Nationale Paris ("BNP") in respect
of the loan to the Company by BNP.
9.4 The Buyer shall procure that Lee Guinchard and David Gillard shall be
appointed to the board of directors of Take-Two Europe.
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9.5 The Buyer agrees that it shall use reasonable endeavours to transfer the
employment of David Gillard to its subsidiary Take Two Interactive
Software France SA within a reasonable time of completion on the same
terms as the service agreement in the agreed terms.
9.6 The Buyer agrees that within a reasonable time of Completion, it shall
grant options to the following persons in the numbers set out next to
their names, on the terms of the Option Agreement in the agreed terms at
an exercise price of market value on 30 March 1999:
Lee Guinchard 50,000
Daniel Gillard 50,000
Matthew Lamprell 15,000
Roy Newcombe 5,000
Paul Hooper 3,000
Christophe Frilley 3,000
Spencer Guinchard 3,000
10. Effect of Completion
Any provision of this Agreement and any other documents referred to in it
which is capable of being performed after but which has not been
performed at or before Completion and all Warranties and covenants and
other undertakings contained in or entered into pursuant to this
agreement shall remain in full force and effect notwithstanding
Completion.
11. Costs, Expenses and Insurance
11.1 All costs and expenses incurred by or on behalf of the parties to this
Agreement in connection with this Agreement or any of the documents to be
executed pursuant to this Agreement will be borne solely by the party who
incurs them (and for the avoidance of doubt, any fees, charges,
disbursements or other remuneration payable in respect of the Completion
Accounts or this Agreement:
(a) to the Buyer's Accountants or the Buyer's Solicitors shall be
borne by the Buyer; and
(b) to the Sellers' Accountant or the Seller's Solicitors shall be
borne by the Seller)
11.2 For 90 days following Completion the Sellers shall take such steps as are
reasonably available to them to maintain in good standing all insurance
policies relating to the Group Companies, details of which are given in
the Disclosure Letter. The Buyer shall be responsible for making new
insurance arrangements for the Group Companies as soon as reasonably
practicable after Completion and undertakes to pay on demand (against
evidence thereof) to the Sellers all costs properly attributable to
keeping the said insurance arrangements in force after Completion.
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12. Notices
12.1 To be effective all notices consents approvals requests or other
communications relating to this Agreement must be in writing but may be
delivered personally or sent by first class prepaid (airmail if overseas)
recorded delivery post or facsimile (with a confirmation copy sent by
post) to the party to be served at its address as stated in this
Agreement or to that party's facsimile transmission number at that
address or as notified from time to time;
and if to the Buyer to:-
Take Two Interactive Software Europe Limited
Hogarth House
29-31 Sheet Street
Windsor
Berkshire
SL4 1BY
For the attention of: Kelly Sumner
and if to the Sellers to the respective addresses set out in Schedule 1.
12.2 A communication will be deemed to have been served as follows:-
12.2.1 if personally delivered or by overnight mail at the time of
delivery;
12.2.2 if posted at the expiration of two days (three days if overseas)
(excluding days which are not Business Days) after the envelope
containing the communication was delivered into the custody of the
postal authorities;
12.2.3 if sent by facsimile at the expiration of one day (excluding a
Business Day) after the facsimile was transmitted.
12.3 In proving service it will be sufficient to prove that the personal
delivery was made or that the envelope containing the communication was
properly addressed as a pre-paid first class (airmail if overseas)
recorded delivery letter or that the facsimile was properly addressed and
sent.
13. Entire Agreement/Variation
13.1 This Agreement (together with any Transaction Documents) constitutes the
entire agreement and understanding between the parties and supersedes any
previous agreement, arrangement or understanding between the parties in
relation to the subject matter of this Agreement.
- 23 -
13.2 No variation of this Agreement shall be effective unless made in writing
and signed by or on behalf of each party.
14. Counterparts
This Agreement may be executed in any number of counterparts all of which
together shall constitute a single instrument.
15. Announcements
Unless specifically otherwise agreed in writing or required by law, no
public announcement shall be made in respect of the subject matter of
this Agreement and the parties shall co-operate with respect to any such
public announcement.
16. General
16.1 The termination of this Agreement for whatever cause shall not prejudice
or affect the rights or remedies of either party against the other in
respect of any antecedent breach of this Agreement and shall not
prejudice the rights or remedies of either party in respect of any sums
or sum of money owed or owing from one party to the other.
16.2 No failure or delay by either party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor
shall any single or partial exercise by either party of any right, power
or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided
are cumulative and not exclusive of and are without prejudice to any
rights or remedies available under law or otherwise.
16.3 No breach of any provision of this Agreement shall be waived or
discharged except with the express written consent of the parties.
16.4 If any term or provision in this Agreement shall be held to be illegal or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or provision or part shall to that extent be deemed not to form
part of this Agreement but the enforceability of the remainder of this
Agreement shall not be affected. The parties further agree to replace
such void or unenforceable provision of this Agreement with valid and
enforceable provisions that will achieve, to the greatest extent
possible, the economic, business and other purposes of the illegal or
unenforceable term or provision.
16.5 Subject to the express provisions of this Agreement, neither party may
assign the benefit of this Agreement in whole or in part without the
prior written consent of the other Provided That the Buyer may upon
giving written notice to the Sellers, assign the benefit of this
Agreement to any Connected Company. For the purposes of this sub-clause
"Connected Company" will mean any Subsidiary Undertaking, Parent
Undertaking or Associate of the Buyer or any Subsidiary Undertaking of
such Parent Undertaking or Associate. If that assignee (or in the case of
a series of assignments the ultimate assignee)
- 24 -
ceases to be a Connected Company, the rights held by the relevant
assignee shall lapse unless they are reassigned within 14 days to the
Buyer or any other person or Undertaking at that time a Connected
Company.
16.6 Notwithstanding any other provisions of this Agreement no provision of
any Transaction Document of such a nature so as to cause it to be
registered under the Restrictive Trade Practices Act of 1976 shall take
effect unless and until such time as appropriate notice of that provision
shall have been furnished to the Director General of the Office of Fair
Trading and notified in relation to Article 85 of the Treaty of Rome. The
parties shall use all reasonable endeavours to procure the furnishing of
such notice at the Buyer's cost as soon as possible after the signing of
this Agreement.
16.7 If the Sellers or the Buyer default in the payment when due of any sum
payable under this Agreement or the Deed (whether determined by agreement
or pursuant to an order of the Court or otherwise) the liability of the
Sellers or the Buyer (as the case may be) shall be increased to include
interest on such sum from the date when such payment was due until the
date of actual payment (as well after as before judgment) at a rate per
annum of 2 per cent above the base rate from time to time of National
Westminster Bank Plc. Such interest shall accrue from day to day.
17. Provision of Group Business Information
17.1 During the period of six years after Completion and without prejudice to
any of the Warranties:-
17.1.1 if any Group Business Information Required for the Group Business
of the Company or other member of the Group 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, the Sellers shall procure that such Group Business
Information is provided to the Buyer promptly on request; and
17.1.2 if any Books or Records of any Seller or any other member of the
Retained Group contain Group Business Information which should be
provided to the Buyer, the Sellers shall procure that copies of
such Books or Records are given to the Buyer promptly on request.
17.2 For the purposes of this clause and this Agreement generally, "Required
for the Group Business" means any Intellectual Property or Group Business
Information of the Company or any other member of the Group which is or
has in the last 6 years been used in the business of the Company or any
other member of the Group or if it will be needed by the Company or any
other member of the Group to carry on its business in the same manner as
it is presently carried on or to fulfil any of its present contracts,
plans or projects in relation to the business of the Company or that
member of the Group or to comply with any law applicable in relation to
the business of the Company or that member of the Group or if it is
vested in any of the Buyers and its retention by any Buyer after
Completion of this agreement would be damaging or detrimental to the
business of the
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Company or any member of the Group.
18. Governing Law and Jurisdiction
18.1 This Agreement and the Transaction Documents save as expressly stated
otherwise shall be governed by and construed in accordance with English
law and the parties irrevocably submit to the non-exclusive jurisdiction
of the English courts as regards any claim, dispute or matter ensuing in
relation to this Agreement and the Transaction Documents.
18.2 Each of the Sellers and the Buyer hereby irrevocably designate, appoint
and empower (in the case of the Sellers) the Sellers' Solicitors and (in
the case of the Buyer) the Buyer's Solicitors as its agent to receive for
and on its behalf service of process in any legal action, matter or
proceedings with respect to this Agreement service on whom shall be
deemed completed whether or not received by the Sellers or the Buyer as
the case may be. Each party shall inform the other in writing of any
change in the address of its process agents within 28 days. If such
process agents cease to have an address in England, the relevant party
irrevocably agrees to appoint new process agents acceptable to the other
party and deliver to it within 14 days a copy of a written acceptance of
appointment by its new process agents. Nothing contained in this
Agreement shall however affect the right to serve process in any other
manner permitted by law or the right to bring proceedings in any other
jurisdiction for the purposes of the enforcement or execution of any
judgment or other settlement in any other courts.
IN WITNESS of which this Agreement has been duly executed the day and year first
above written.
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SIGNED by LEE GUINCHARD ) /s/ Lee Guinchard
in the presence of: )
/s/ Sabastian Belcher
SIGNED by DAVID GILLARD ) /s/ David Gillard
in the presence of: )
/s/ Sabastian Belcher
SIGNED by LEE GUINCHARD ) /s/ Lee Guinchard
as authorised signatory for )
INTERACTIVE DEVELOPMENT )
in the presence of: )
/s/ Sabastian Belcher
SIGNED by KELLY SUUNER ) /s/ Kelly Sumner
for and on behalf of )
TAKE TWO INTERACTIVE )
SOFTWARE, INC )
in the presence of: )
/s/ Sabastian Belcher
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