EXHIBIT 10.2
Settlement and Termination Agreement
VIRGIN MEDIA TELEVISION LIMITED
and
TWO WAY MEDIA LIMITED
and
TWO WAY GAMING LIMITED
and
TWO WAY MEDIA HOLDINGS LIMITED
6(th) April 2009
THIS SETTLEMENT AND TERMINATION AGREEMENT IS MADE ON 6(TH) APRIL
2009
BETWEEN:
(1) VIRGIN MEDIA TELEVISION LIMITED, a company incorporated in
England and
Wales with Company number 02294553 and whose registered office
is at 160
Great Portland Street, London W1W 5QA ("VMTV");
(2) TWO WAY MEDIA LIMITED, a company incorporated in England and
Wales with
Company number 04904168 and whose registered office is at 19
Bolsover
Street, London W1W 5NA ("TWM");
(3) TWO WAY GAMING LIMITED, a company incorporated in the States
of Alderney
with Company number 1643 and whose registered office is at
Millennium
House, Olliver Street, St Anne, Alderney ("TWG"); and
(4) TWO WAY MEDIA HOLDINGS LIMITED, a company incorporated in
England and Wales
with Company number 6255877 and whose registered office is at
19 Bolsover
Street, London W1W 5NA ("TWMH"),
(each a "PARTY" and together, the "PARTIES").
WHEREAS:
(A) VMTV, TWG and TWMH entered into a brand licence agreement for
the
"Challenge Jackpot" Interactive Television Applications,
Interactive
Service and Website dated 27th June 2008 (the "BRAND LICENCE
AGREEMENT").
VMTV, TWM and TWMH entered into a production and supply
agreement for the
"Challenge Jackpot" television channel (the "CHANNEL") dated
27th June 2008
(the "PRODUCTION AGREEMENT"). TWMH and VMTV entered into two
deeds of
guarantee and indemnity relating respectively to the Brand
Licence
Agreement and the Production Agreement (the "GUARANTEES").
(B) VMTV alleges that TWG breached Clauses 4.4 and 4.5 of the
Brand Licence
Agreement by failing to pay the amount of (pound)645,849.00
(excluding VAT)
which was invoiced by VMTV to TWG on 16 January 2009
(reference number
20052247) in respect of the Minimum Royalty Guarantee owed to
VMTV for the
period between 1 October and 31 December 2008. VMTV alleges
that invoice
was due for payment on 30 January 2009 and that the alleged
failure to pay
amounts to a material breach by TWG of the Brand Licence
Agreement. VMTV
issued a notice to TWG on 9 March 2009 identifying the alleged
breach and
requiring its remedy within thirty days from the receipt of
that notice.
(C) TWG, TWM and Netplay TV PLC ("NETPLAY") have agreed that TWG
and TWM will
sell, and Netplay will purchase the business and assets
necessary for the
provision of equivalent services (save in respect of
"Challenge Jackpot"
interactive red button services) to those currently provided
by TWG and
TWM, respectively, under the Brand Licence Agreement and the
Production
Agreement (the "SERVICES") (the "ASSET ACQUISITION").
(D) VMTV and Netplay have reached agreement pursuant to which, on
completion of
the Asset Acquisition, Netplay will provide the Services to
VMTV.
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement, the following terms shall have the following
meanings:
"AGCC" means the Alderney Gambling Control Commission.
1
"BRAND LICENCE FEES" means the fees that TWG is required to pay
VMTV under
Clause 4.2 of the Brand Licence Agreement.
"CHALLENGE JACKPOT CUSTOMERS" means all clients and customers
registered with
TWG pursuant to the operation of the Brand Licence Agreement
(including the
approximately 4,735 users captured pursuant to the operation of the
Content
License Agreement).
"CLAIM(S)" means a claim, potential claim, counterclaim, right of
set-off,
indemnity, cause of action, right or interest of any kind or nature
whatsoever
(including for interest and costs), whether known or unknown,
suspected or
unsuspected, actual or contingent, however or whenever arising,
whether in a
court, tribunal and/or in arbitration, whether in this jurisdiction
or another,
including (but not limited to) any claims for costs or interest, or
for account
of profits, or for damages, and whether on the basis of contract,
equity, tort,
restitution or unjust enrichment or otherwise.
"CLIENT BALANCES" means all sums held by TWG or a third party on
behalf of
Challenge Jackpot Customers.
"CONFIDENTIAL INFORMATION" means all information conveyed (whether
directly or
indirectly) orally, in writing, in machine readable form or
otherwise which
relates to a Party's business, products, developments, trade
secrets, know-how,
personnel, suppliers and customers (whether or not designated as
"confidential
information" by the disclosing party), together with all
information derived
from the above and all information designated as confidential or
which would
reasonably be considered to be confidential. Confidential
Information does not
include information that: (a) is or becomes public knowledge other
than by
breach of this Agreement, (b) the relevant Party can demonstrate
was already in
his actual possession or knowledge prior to disclosure by the other
Party and
which such Party lawfully acquired other than from the other Party,
(c) is
received from a third party who lawfully acquired or developed it
and who is
under no obligation of confidence in relation to its disclosure, or
(d) is
independently developed without the use of the other Party's
Confidential
Information.
"CONTENT LICENSE AGREEMENT" means the content licence agreement
entered into VM
and TWM in respect of certain interactive games and gambling
services dated 25
April 2007.
"EXPIRY DATE" means 1 July 2009 or such other later date as is
agreed between
Netplay, TWG and TWM for the continued provision of some or all of
the
Transition Services.
"FINAL COMPLETION" means the date on which all of the following
have been
completed: (i) TWG and TWM have provided all of the Transition
Services to
Netplay; (ii) Netplay has acquired an eGambling Licence from the
AGCC; (iii) the
AGCC has confirmed that TWG may release the Client Balances to
Netplay; and (iv)
Netplay and TWG have fulfilled all of their obligations under the
Migration
Plan.
"FINAL COMPLETION NOTICE" means a notice from TWG to VMTV
confirming that
Completion has taken place.
"MIGRATION PLAN" means the migration plan to be agreed between TWG,
Netplay and
the AGCC as set out in Part 3, paragraph 3, of Schedule 3.
"MINIMUM ROYALTY GUARANTEE" OR "MRG" means the sums that TWG is
required to pay
VMTV under Clauses 4.4 and 4.5 of the Brand Licence Agreement.
"NETPLAY AGREEMENT" means the business transfer agreement between
TWM, TWG and
Netplay of even date.
"NETPLAY COMPLETION DATE" means the date of completion of the Asset
Acquisition
in accordance with the Netplay Agreement.
2
"PRODUCTION COSTS" means the production costs that VMTV is required
to pay TWM
in accordance with Clause 9.2 of the Production Agreement.
"PRODUCTION FEES" means the production fees that VMTV is required
to pay TWM in
accordance with Clause 9.2 of the Production Agreement.
"REGISTERED CUSTOMER DATA" means the database of personal data of
registered
customers captured by TWG pursuant to the operation of the Brand
Licence
Agreement (including the database of approximately 4,735 users
captured pursuant
to the operation of the Content License Agreement) as further
defined in Clause
11.1 of the Brand Licence Agreement.
"TRANSITION PERIOD" means the period commencing on the Netplay
Completion Date
and ending on completion of the Transition Plan.
"TRANSITION PLAN" means the timetable for provision
