HEADS OF
AGREEMENT
This Heads of
Agreement (“ HOA ”) is made and
entered into as of January 19, 2007, by and between Index Visual
and Games. Ltd., a Japanese corporation, located at 3F Yokomizo
Bldg., 2-14-1, Kamiuma, Setagaya-ku, Tokyo 154-0011, Japan
(“ IVG ”), and New Motion, Inc., a
Delaware corporation, located at 42 Corporate Park, 2 nd
Floor, Irvine, CA 92606 (“ NM ”), with
respect to the formation of a joint venture between IVG and NM on
the terms set forth in this HOA.
Pursuant to the
terms of a certain Asset Purchase Agreement (“
APA ”), dated as of an even date herewith,
between IVG and NM, NM has agreed to purchase certain billing
system assets and carrier contracts set forth in the APA (“
Purchased Assets ”) from IVG, immediately
following the acquisition of such Purchased Assets by IVG from
Mobliss, Inc., a Washington corporation located at 710 Second
Avenue, Suite 600, Seattle, WA 98104.
IVG and NM
(“ Parties ”) wish to enter into a
joint venture (“ Joint Venture ”) to
manage the Purchased Assets and to engage in content development
and licensing activities.
The Parties
agree that this HOA shall comprise the initial, and most basic
document outlining the basic terms and conditions agreed to by the
Parties, and that the Parties shall enter into more detailed
agreements related to the Joint Venture, including, among other
agreements, a Shareholders’ Agreement and Management Services
Agreement as described below (“ Cooperation
Agreements ”) more clearly defining their
obligations and the details of all relevant matters pursuant to and
based upon this HOA. Also, the obligations and roles of the Parties
set forth in this HOA shall be incorporated into the Cooperation
Agreements and this HOA shall expire and be on no further force or
effect upon the execution of the Cooperation Agreements. Until the
execution of the Cooperation Agreements, this HOA shall be legally
binding and shall remain in effect until the execution of the
Cooperation Agreements by the Parties.
NOW, THEREFORE,
in consideration of the mutual premises set forth below and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as
follows:
1. Formation
of Joint Venture Entity . The Joint Venture entity shall be a
corporation formed under the laws of Nevada, U.S.A. IVG shall own
51% of the outstanding capital stock of the entity and NM shall own
49% of the outstanding capital stock of the entity. The Joint
Venture shall have a Board of Directors consisting of three (3)
members, one of whom shall be elected by IVG (initially Shigeki
Takeuchi), one (1) of whom shall be elected by NM (initially Ray
Musci) and one of whom shall be elected with the mutual consent of
IVG and NM (initially Hideo Oishi). IVG and NM shall enter into a
mutually acceptable Shareholders’ Agreement, which shall
include share transfer restrictions
