ASSET PURCHASE AND ASSUMPTION OF
LIABILITIES AGREEMENT
This ASSET PURCHASE AND ASSUMPTION OF
LIABILITIES AGREEMENT (this "Agreement") is entered into this 13th
day of March, 2006, by and between NEW MEDIA LOTTERY SERVICES,
INC., a Delaware corporation ( "NMLS" or the
“Company”) ), and NEW MEDIA LOTTERY SERVICES
(INTERNATIONAL) LIMITED, an Irish limited company ( "LTD
" ).
W I T N E S S E T H:
WHEREAS, LTD is
a wholly owned subsidiary of New Media Lottery Services plc, an
Irish corporation ( “PLC” ), all of
the outstanding shares of which are owned by NMLS; and
WHEREAS, PLC has engaged Zimmerman Adams
International Ltd. (“ZAI”) to serve as its lead
financial advisor and broker to sponsor PLC’s entire
outstanding share capital for admission to trade on the AIM Market
operated by the London Stock Exchange (“ AIM
”) pursuant to an agreement between the parties dated
September 22, 2005 (the “Engagement Letter”);
and
WHEREAS, in furtherance of the admission of
PLC’s share capital to AIM, NMLS desires to sell, transfer
and assign to LTD, effective upon the date on which PLC’s
common shares are admitted for trading on the AIM (the
“Admission Date”), the assets and liabilities described
herein, all as more fully described and catalogued on the List of
Assets attached hereto as Exhibit 1.01 (the
"Assets" ), and the List of Liabilities and
Obligations Transferred to and Assumed by LTD attached hereto as
Exhibit 1.02; and
WHEREAS, simultaneous herewith, the parties are
entering into a Technology License Agreement whereby NMLS agrees to
license to LTD certain specified intellectual property which it
owns or has the right to use as of the Admission Date, on the terms
and subject to the conditions provided therein, including all
copyrights; patents; patent applications; proprietary rights,
including any trademarks, trade secrets, service marks, rights in
designs, trade or business names; technology, including any
information, know-how, experience and records, including all
formulas, designs, specifications, drawings, data, documents,
manuals and instructions and all technical or other expertise and
all computer software and computer programmes including, without
limitation, both object code and source code, and records,
technology, processes and methodologies relating to the business of
NMLS or as carried on at any time up to the date of the License
Agreement and developed by or for NMLS (the “Intellectual
Property”); and
WHEREAS, upon the Admission Date and the closing
of the sale, transfer and assignment of the Assets pursuant hereto
and the license of the Intellectual Property pursuant to the
License Agreement, LTD will posses or have the right to use all of
those assets necessary and required for it to operate the business
of NMLS substantially in the manner in which NMLS has operated its
business prior to the Closing Date (as defined herein);
WHEREAS, LTD desires to purchase and acquire the
Assets enumerated in Schedule 1.01 and agrees to become liable to
pay, perform, discharge and satisfy those liabilities transferred
hereby and assume, pay, perform, observe and discharge in
accordance with the respective terms thereof, all of the
Company’s obligations, duties, commitments and liabilities
under each and every agreement assigned by the Company to LTD
hereunder, as more fully described in, and subject to, Exhibit
1.02, as may be adjusted on the Closing Date, (collectively, the
“Liabilities and Obligations”).
NOW, THEREFORE, in consideration of the premises
and the mutual covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally
bound, agree as follows:
ARTICLE I
TRANSFER AND SALE OF
ASSETS
SECTION 1.01.
Transfer, Assignment and Sale of Assets by NMLS to LTD . On
the terms and subject to the conditions of this Agreement, on the
Closing Date (as hereafter defined), NMLS shall sell, transfer,
assign and deliver to LTD, subject, in the case of the Alladdin
Agreement (as defined in Section 2.05(a)), to the receipt of
consent from Alladdin Lotteries Limited and Alladdin Limited to the
assignment of said agreement and the benefits and properties
acquired thereunder and as may have been further developed, by the
Company thereunder, and LTD shall receive from NMLS, the Assets, as
may be adjusted on the Closing Date.
SECTION 1.02.
Consideration for the Assets . In consideration for the
purchase and sale of the Assets, upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, LTD
shall deliver to NMLS an executed Instrument of Assumption in the
form attached hereto as Exhibit 1.03 (the “Instrument
of Assumption” ).
SECTION 1.03.
Assumption of and Covenant to Satisfy Certain Liabilities and
Obligations by LTD . On and as of the close of business on the
Closing Date, LTD shall assume, and satisfy and be liable for
paying, performing and discharging the Liabilities and Obligations
and will deliver the Instrument of Assumption in favor of
NMLS.
SECTION 1.04. LTD
Indemnification of NMLS . LTD covenants and agrees to defend,
indemnify and hold harmless NMLS (and its successors-in-interest),
its stockholders, officers, directors, employees, agents, advisers,
representatives and affiliates, and their respective heirs,
successor and assigns (collectively, the "NMLS
Indemnitees" ) from and against, and shall pay or
reimburse NMLS Indemnitees for, any and all actions, causes of
actions, suits, debts, losses, charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies,
damages, and expenses (including attorney fees and costs actually
incurred), of any nature whatsoever, in law or equity (collectively
"Claims" ), which arise out of or are related to
the Liabilities and Obligations, regardless of whether known or
unknown or incurred before or after the Closing Date, all as more
fully described in and subject to the provisions of that certain
Indemnity Agreement attached hereto as Exhibit 1.04 (the
“Indemnity Agreement” ).
SECTION 1.05.
Closing . The closing of the transactions contemplated
hereby (the "Closing" ) shall occur at such time
and place as the parties shall mutually agree promptly after the
satisfaction of the condition set forth in ARTICLE VI hereof (said
date being herein referred to as the "Closing
Date" ).
(a) At the Closing, NMLS will deliver to LTD (i)
to the extent requested by LTD, assignments of all trade names and
assumed names; (ii) assignments of all the agreements being
transferred hereby listed in Schedule 1.01(b) (iii) all documents
of title necessary to transfer ownership to LTD of the Assets; and
(iv) all other previously undelivered documents required to be
delivered by NMLS to LTD at or prior to the Closing in connec-tion
with the transactions contemplated by this Agreement.
(b) At the Closing, LTD will deliver to NMLS (i)
a duly executed Instru-ment of Assump-tion; (ii) a duly executed
Indemnity Agreement; and (iii) all previously undelivered documents
required to be delivered by LTD to NMLS at or prior to the
Closing.
SECTION 1.06. Further Assurances . At any time and from time to time after the
Closing Date, at the request of any party hereto and without
further consideration, NMLS and LTD shall execute and deliver such
other instruments of sale, transfer, assignment and confirmation as
may be reasonably requested in order more effectively to sell,
transfer, and assign to LTD and to confirm LTD’s title to the
Assets and LTD’s obl
