EXHIBIT 10.1
ASSET AND STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of the 29th day of July 1997,
by and among GameTek (UK) Limited ("GameTek"), a United
Kingdom corporation, Alternative Reality Technologies, Inc.
("ART"), a Florida corporation (GameTek and ART are
sometimes hereinafter collectively referred to as
"Sellers"), GameTek (FL), Inc., a Florida corporation (the
"Stockholder") and Take Two Interactive Software, Inc.
("Buyer").
W I T N E S S E T H :
WHEREAS, the Stockholder is the owner of all of
the issued and outstanding Common Stock of the Sellers; and
WHEREAS, the Stockholder is also the owner of
certain assets which the Buyer wishes to purchase; and
WHEREAS, the Sellers are engaged in the business
of creating, developing and/or distributing computer
software games (the "Business"); and
WHEREAS, the Stockholder wishes to sell to Buyer,
and Buyer wishes to purchase from Stockholder, all of
Stockholder's right, title and interest in (i) PC CD
software games known as Dark Colony, Quarantine and Road
Warrior (the "Existing Titles"), (ii) the PC CD software
games known as Guardians of Justice, the Reap and all other
software programs and PC CD games being developed in
GameTek's office (the "UK Titles") and (iii) all of the
outstanding capital stock of the Sellers (the "Stock").
WHEREAS, simultaneously herewith Buyer and
Stockholder are entering into a distribution agreement (the
"Gameboy Distribution Agreement"), a copy of which is
annexed hereto as Exhibit A pursuant to which Buyer shall
receive the European distribution rights to all Gameboy
Titles currently published by the Stockholder (the "Gameboy
Titles").
WHEREAS, simultaneously herewith, Buyer and
Stockholder are entering into a distribution agreement (the
"Jeopardy Distribution Agreement"), a copy of which is
annexed hereto as Exhibit A-1 (the Jeopardy Distribution
Agreement and the Gameboy Distribution Agreement are
hereinafter sometimes referred to collectively as the
"Distribution Agreements").
NOW, THEREFORE, in consideration of and in
reliance upon the covenants, conditions, representations and
warranties herein contained, the parties hereto hereby agree
as follows:
1. Purchase and Sale Agreement.
1.1 Agreement of Purchase and Sale. Subject
to the terms and conditions set forth in this Agreement and
in reliance upon the representations, warranties, covenants
and conditions herein contained, Stockholder is (a) selling,
conveying, assigning, transferring and delivering to Buyer,
and Buyer is purchasing from Stockholder, the Purchased
Assets (as defined in subparagraph 1.2 hereof), free and
clear of any and all liens, claims, charges or encumbrances
of any nature whatsoever other than those created by third
party agreements set forth on Schedule 1.3 and those that
are reflected on or referred to in the financial statements
identified in section 4.6 hereof (collectively, the
"Permitted Encumbrances").
1.2 Purchased Assets. As used in this
Agreement, the term "Purchased Assets" means (i) all of
Stockholder's rights, title and interest in the Existing
Titles, and (ii) all of Stockholder's rights, title and
interest in the UK Titles; (the Existing Titles, and the UK
Titles are sometimes hereinafter collectively referred to as
the "Software Assets"); and (iii) the Stock. Schedule 1.2
contains a complete list of all Existing Titles and all UK
Titles. The transfer of the Existing Titles and the UK
Titles (and the term "Purchased Assets") includes all of
Stockholder's right, title and interest in all forms of
expression and media, including but not limited to the
source code, object code, flowcharts, block diagrams, and
all related documentation; and all trade secrets, know-how,
inventions (whether or not patentable), proprietary rights
and intellectual property contained therein, including,
without limitation, all copyrights, trademarks and patents
and all applications therefor, goodwill, all right, title,
interest and benefit of Stockholder in, to, and under, and
subject to, all agreements, contracts and licenses entered
into by Stockholder, or having Stockholder as a beneficiary,
and pertaining to the Existing Title and UK Titles and all
System Documentation and End User Documentation (as
hereinafter defined).
1.3 Assumed Liabilities. Subject to the
terms and conditions set forth in this Agreement and in
reliance upon the representations, warranties, covenants and
conditions herein contained, Buyer is assuming, and shall
only assume (i) all obligations of Sellers, Stockholder
and/or the entities listed on Schedule 1.3 as Stockholder's
affiliates (the "Affiliates") under the third-party
agreements relating to the Existing Titles and the UK
Titles, all of which agreements are listed on Schedule 1.3
(the "Assumed Agreements") and (ii) all of the outstanding
liabilities of the Sellers (the assumed liabilities set
forth in (i) and (ii) above are collectively referred to
hereinafter as the "Assumed Liabilities"). All liabilities
and obligations which are not being assumed by Buyer
pursuant hereto are hereinafter collectively called the
"Retained Liabilities".
1.4 Purchase Price. The purchase price for
the Purchased Assets consists of the following: (a) $50,000,
(b) 406,553 shares (the "Stock Consideration") of the common
stock of the Buyer, (c) two unsecured promissory notes in
the principal amounts of $500,000 and $200,000, respectively
(the "Promissory Notes") of Buyer, in the form annexed
hereto as Exhibit B-1 and B-2, (d) the assumption by Buyer
of all of the Assumed Liabilities pursuant to the Assumption
and Assignment Agreement attached hereto as Exhibit C and
(e) the tax refund, if any, referred to in Section 3.7 (the
aggregate of (a), (b), (c), (d) and (e) is collectively
referred to hereinafter as the "Purchase Price").
2. Closing.
2.1 Closing Date. This Agreement shall be
executed, and the closing of the sale and purchase provided
for herein (the "Closing") shall take place at 10 a.m., New
York time, at the offices of Xxxxxx Xxxxxxxxxx LLP, 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on
the date hereof (such time and date of Closing being
hereinafter called the "Closing Date").
2.2 Action by Buyer. Simultaneously
herewith, Buyer is delivering or causing to be delivered to
Stockholder (in addition to the documents and instruments to
be delivered by it pursuant to paragraph 3 hereof), (a) on
account of the Purchase Price (i) $50,000, (ii) the
Promissory Notes, (iii) certificates representing the Stock
Consideration registered as directed by the Stockholder and
(b) an opinion of Xxxxxx Xxxxxxxxxx LLP, counsel to the
Buyer, dated the Closing Date, in substantially the form
annexed hereto as Exhibit D and (c) the Assumption and
Assignment Agreement.
2.3 Action by Stockholder. Simultaneously
herewith, Stockholder is delivering to Buyer (in addition to
the documents and instruments to be delivered by it pursuant
to paragraph 3 hereof): (i) a duly executed Xxxx of Sale
and Assignment in substantially the form attached hereto as
Exhibit E with respect to the Software Assets, (ii) all
such patent, trademark, trade name and copyright assignments
(in the form attached hereto as Exhibit F), (iii) the
Distribution Agreements, (iv) an opinion of Xxxxxxxx, Xxxxxx
& Xxxxxx, LLP, counsel for Stockholder and Sellers, dated
the Closing Date, in substantially the form of Exhibit G
hereto and (v) all third party consents and governmental and
administrative approvals, as are, in the opinion of Buyer,
necessary or appropriate in order to convey, transfer and
assign to and vest in Buyer good and marketable right, title
and interest in and to the Purchased Assets free and clear
of all liens, security interests, claims, charges and
encumbrances of any nature whatsoever, except for consents
or approvals required under any agreement set forth in
Schedule 1.3 and indicated thereon the Permitted
Encumbrances, and (vi) certificates representing the Stock
with stock powers duly executed in blank. Simultaneously
herewith, Stockholder is delivering (i) the entire inventory
of copies of the Existing Titles and the UK Titles in object
form, consisting of disks together with all improvements,
corrections, modifications, updates enhancements or other
changes; (2) a master copy of the software (in both source
and object code format of the Existing Titles and the UK
Titles), in a form suitable for copying (to the extent such
masters exist); and (3) all existing System Documentation
and User Documentation. System Documentation means all
documentation used in the development and updating of the
Existing and U.K. Titles, including but not limited to,
design or development specifications, error reports, and
related correspondence and memoranda. User Documentation
means the end-user instruction manual that usually
accompanies the Existing Titles and UK Titles instructing
end users in the use of the Existing Titles and UK Titles in
both printed and electronic form.
3. Additional Covenants.
3.1 Further Assurances. Stockholder hereby
agrees that it shall from time to time after the Closing
Date, at Buyer's sole cost and expense, take any and all
actions, and execute, acknowledge, deliver, file and/or
record any and all documents and instruments, as Buyer may
reasonably request, in order to more fully perfect the
rights which are intended to be granted to Buyer hereunder.
3.2 Payment of Taxes Upon Transfer of
Purchased Assets. Stockholder shall be responsible for, and
shall pay, any and all sales, use, purchase, transfer and
similar taxes, and any and all filing, recording,
registration and similar fees, arising out of the
transactions contemplated by this Agreement.
3.3 Survival of Representations and
Warranties. Each of the parties hereto hereby agrees that
all representations and warranties made by or on behalf of
it in this Agreement or in any document or instrument
delivered pursuant hereto shall survive the Closing Date and
the consummation of the transactions contemplated hereby for
a period of eighteen (18) months, provided, however, that
the representations and warranties set forth in Section 4.13
(taxes), Section 4.4 (authority) and Section 4.8 (assets
free and clear) shall continue until the expiration of the
applicable statute of limitations.
3.4 Books and Records. Stockholder shall,
for a period of at least three years following the Closing
Date, maintain and make available to Buyer and its
representatives for inspection and reproduction, during
regular business hours, all books and records relating to
Sellers, the Purchased Assets, the Business or the Assumed
Liabilities which are not included among the Purchased
Assets and which are retained by the Stockholder. Buyer
shall, for a period of at least three years following the
Closing Date, maintain and make available to Stockholder and
its representatives for inspection and reproduction, during
regular business hours upon reasonable notice, all books and
records relating to Sellers, which are included among the
Purchased Assets or delivered to or left in the possession
of Sellers, but only insofar as said books and records
relate to periods ending on or prior to the Closing Date.
3.5 Employment Agreement. Simultaneously
herewith, Xxxxx Xxxxxx is delivering to GameTek an
Employment Agreement in the form annexed hereto as Exhibit
I.
3.6 Discharge of Liens. Stockholder or
Sellers have caused all liens, claims, charges and
encumbrances upon any of the Purchased Assets or any of the
assets of either Seller that are not reflected or referred
to in the latest financial statements referred to in Section
4.6 hereof or that did not arise after the date thereof in
the ordinary course of business, to be terminated or
otherwise discharged at or prior to the Closing other than
the Permitted Encumbrances.
3.7 Cancellation of Intercompany
Indebtedness. On or prior to the Closing Date, each of
Stockholder and any Affiliate shall cause all intercompany
indebtedness due from Sellers to Stockholder and any
Affiliate to be converted into equity. Any tax refunds due
to and received by either GameTek or ART in respect of
periods prior to the Closing Date which are not reflected on
the balance sheet of Sellers previously furnished to Buyer
shall be paid to Stockholder as an additional payment of
Purchase Price including, without limitation, the tax refund
of approximately 250,000 pounds sterling owed to GameTek in
respect of fiscal 1994 and fiscal 1995. Buyer, Sellers and
Stockholder shall cooperate with each other and use their
reasonable best efforts to obtain such refund and cause the
same to be paid to Stockholder promptly.
3.8 Retained Liabilities. Subsequent to the
Closing Date, Stockholder shall pay, discharge and perform
the Retained Liabilities in due course.
3.9 Registration Rights. Simultaneously
herewith, Buyer and Stockholder are executing and delivering
a registration rights agreement in substantially the form
annexed hereto as Exhibit J (the "Registration Rights
Agreement").
3.10 Certificate of Stockholder.
Simultaneously herewith, Stockholder is delivering a
certificate of the Secretary of Stockholder stating that the
sale of all of the Stock and the Purchased Assets has been
approved by the directors of Stockholder and annexing true
and correct copies of the minutes approving the execution
and delivery of the Agreement and the consummation of the
transactions contemplated thereby.
3.11 Certificate of Buyer. Simultaneously
herewith, Buyer is delivering a certificate by its Secretary
stating that the acquisition of the Purchased Assets and the
issuance of the Promissory Notes and Stock Consideration has
been approved by the shareholders of Buyer and annexing a
true and correct copy of the Buyer's minutes approving such
acquisition.
3.12 Use of Name. Promptly after the
execution hereof, and at its cost and expense, Buyer shall
change the corporate name of each of each of the Sellers and
GameTek Deutschland GmbH to a name bearing no resemblance to
either Alternative Reality Technologies, Inc., GameTek (UK)
Limited or GameTek Deutschland GmbH, the rights to which are
being retained by Stockholder; provided, however, that the
Buyer may continue to use the GameTek and ART names in
connection with the disposition of existing finished goods
inventory of games subject to existing purchase orders for
finished goods inventory.
3.13 Cooperation. Each of the parties
hereto hereby agrees to fully cooperate with the other
parties hereto in preparing and filing any notices,
applications, reports and other instruments and documents
which are required by, or which are desirable in the opinion
of any of the parties hereto, in respect of any statute,
rule, regulation or order of any governmental or
administrative body in connection with the transactions
contemplated hereby, including, without limitation, the
execution and filing of any financial reports or tax returns
which are delinquent as of the Closing Date.
4. Representations and Warranties as to Seller
and Stockholder. Sellers and the Stockholder hereby
severally and not jointly represent and warrant to Buyer as
follows:
4.1 Organization, Standing and Power. Each
of the Stockholder, GameTek and ART is a corporation duly
organized, validly existing and in good standing under the
laws of Florida, the United Kingdom and Florida,
respectively, with full corporate power and authority to
own, lease and operate its respective properties and to
carry on its respective business as presently conducted by
it. There are no states or jurisdictions in which the
character and location of any of the properties owned or
leased by either of GameTek or ART, or the conduct of its
respective business, makes it necessary for it to qualify to
do business as a foreign corporation and where it has not so
qualified, except for those jurisdictions in which the
failure to so qualify would not have a materially adverse
effect on the business or operations of such entity. Copies
of the Certificate of Incorporation of each of Stockholder,
GameTek and ART and all amendments thereof, and of the By-laws of each
of Stockholder, GameTek and ART, as amended to
date, have been furnished to Buyer and are complete and
correct. GameTek's and ART's respective minute books
heretofore exhibited to Buyer contain complete and accurate
records of all meetings and other corporate actions of their
respective stockholders and Board of Directors (including
committees of its Board of Directors).
4.2 Capitalization. The authorized capital
stock of GameTek consists of 1,677,756 shares of Common
Stock, par value one pound sterling per share, of which
1,050,601 shares are issued and outstanding. The authorized
capital stock of ART consists of 200 shares of Common
Stock, par value $0.01 per share, of which 100 shares are
issued and outstanding. Stockholder owns all of the Stock
of the Sellers and has good and valid title to the Stock,
free and clear of any and all liens, claims, charges and
encumbrances of any nature whatsoever. The Stock has not
been assigned, transferred, hypothecated or otherwise
encumbered. There are no outstanding options, warrants,
rights, calls, commitments, conversion rights, puts, plans
or other agreements of any character to which Stockholder or
the Sellers are a party or otherwise bound which provide for
the acquisition or disposition of any of the Stock or any of
the securities of either Seller. All of the Stock has been
duly and validly issued and is fully paid and nonassessable.
4.3 Interests in Other Entities. Neither
GameTek nor ART (A) own, directly or indirectly, of record
or beneficially, any shares of voting stock or other equity
securities of any other corporation except that GameTek
Deutschland GmbH is a wholly owned subsidiary of GameTek,
(B) have any ownership interest, direct or indirect, of
record or beneficially, in any unincorporated entity, or (C)
have any obligation, direct or indirect, present or
contingent, (1) to purchase or subscribe for any interest
in, advance or loan monies to, or in any way make
investments in, any person or entity, or (2) to share any
profits or capital investments or both other than those set
forth on Schedule 4.3 annexed hereto.
4.4 Authority. The execution and delivery
by Stockholder, GameTek and ART of this Agreement and of all
of the agreements to be executed and delivered by each of
them pursuant hereto (including, without limitation, the
Distribution Agreements), the performance by each of them of
its respective obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all
necessary corporate action on the part of Stockholder,
GameTek and ART (including, but not limited to, the
unanimous consent of their respective stockholders, if
required, and Boards of Directors) and each of Stockholder,
GameTek and ART has all necessary power with respect
thereto. This Agreement is, and when executed and delivered
by Stockholder and the Sellers (to the extent that they are
parties thereto) each of the other agreements to be
delivered by any or all of them pursuant hereto will be, the
valid and binding obligation of Stockholder, GameTek and ART
(to the extent that they are parties thereto) in accordance
with its terms.
4.5 Noncontravention. Neither the execution
and delivery by Stockholder and/or the Sellers of this
Agreement or of any agreement to be executed and delivered
by Stockholder and/or the Sellers pursuant hereto, nor the
consummation of any of the transactions contemplated hereby
or thereby, nor the performance by Stockholder or the
Sellers of their respective obligations, as the case may be,
hereunder or thereunder, will (nor with the giving of notice
or the lapse of time or both would) (a) conflict with or
result in a breach of any provision of the Certificate of
Incorporation or By-laws of the Stockholder or the Sellers,
or (b) except as set forth on Schedule 1.3, give rise to a
default, or any right of termination, cancellation or
acceleration, or otherwise be in conflict with or result in
a loss of contractual benefits to the Sellers or, with
respect to the UK Titles, the Existing Titles or the GameBoy
Titles (collectively the "Titles"), under any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or
obligation to which it is a party or by which the Sellers or
the Stockholder may be bound or to which the Titles may be
subject, or require any consent, approval or notice under
the terms of any such document or instrument, or (c) except
as set forth on Schedule 1.3, violate any order, writ,
injunction, decree, law, statute, rule or regulation of any
court or governmental authority which is applicable to
Stockholder with respect to the UK Titles, the Existing
Titles or the GameBoy Titles, or the Sellers, or (d) except
as set forth on Schedule 1.3, result in the creation or
imposition of any lien, claim, charge, restriction or
encumbrance upon any of the properties or assets of the
Sellers, or, with respect to the UK Titles, the Existing
Titles or the GameBoy Titles or (e) except as set forth on
Schedule 1.3, give any individual or entity a legally
enforceable claim against Buyer, Stockholder, Sellers or the
Stock.
4.6 Financial Statements. Attached to
Schedule 4.6 are copies of GameTek's and ART's respective
unaudited balance sheets as of June 15, 1997 (the "Balance
Sheets"). Said Balance Sheets fairly present the financial
position of each of GameTek and ART as at the dates thereof
and each is true and correct in all material respects.
Notwithstanding the foregoing or any other provision hereof
to the contrary, neither Stockholder nor Sellers make any
representation or warranty of any kind regarding the
collectability of any account receivable or note receivable
reflected on the Balance Sheets, the availability to any
person or entity of any set-offs, contras, counterclaims,
rights of recoupment or similar claims to any portion
thereof, or with respect to the likelihood or amount of
future product returns or claims for price protection,
discounts, allowances or similar claims in respect of
products sold prior to the Closing hereunder, or with
respect to the inventory shown thereon except as provided in
Section 4.11 below. Except as set forth on Schedule 4.6,
the books and records of each of GameTek and ART are in all
material respects complete and correct, have been maintained
in accordance with good business practices, and accurately
reflect the basis for the financial condition of each of
GameTek and ART as set forth in the aforementioned financial
statements.
4.7 Absence of Undisclosed Liabilities.
Subject to the penultimate sentence of Section 4.6, and
except for Permitted Encumbrances, Sellers have no
liabilities or obligations of any nature whatsoever, whether
accrued, absolute, contingent or otherwise which have not
been (i) in the case of liabilities and obligations of a
type customarily reflected on a corporate balance sheet
prepared in accordance with generally accepted accounting
principles, set forth on the balance sheet described in
subparagraph 4.6 above or (ii) in the case of other types of
liabilities and obligations, described in any of the
Schedules delivered pursuant hereto or omitted from said
Schedules in accordance with the terms of this Agreement, or
(iii) incurred, consistent with past practice, in the
ordinary course of business since June 15, 1997 (in the case
of liabilities and obligations of the type referred to in
clause (i) above).
4.8 Properties. (a) Stockholder has good
and valid title to all of the Purchased Assets, free and
clear of all mortgages, liens, pledges, claims, charges or
encumbrances of any nature whatsoever ("Liens"), except for
Permitted Encumbrances and for those which are described on
Schedule 4.8 hereto.
(b) Except as set forth on Schedule 4.8 and
except for Permitted Encumbrances, each Seller has good and
valid title to all of the properties and assets, reflected
on the Balance Sheet as owned by it or thereafter acquired,
except properties or assets sold or otherwise disposed of in
the ordinary course of business, free and clear of any and
all Liens except for Permitted Encumbrances and Liens not
yet due and payable or being contested in good faith by
appropriate proceedings. All plants, structures and
equipment which are utilized in the Sellers' Businesses, or
are material to the condition (financial or otherwise) of
either Seller are owned or leased by either Seller.
Schedule 4.8 sets forth all (a) real property which is
owned, leased (whether as lessor or lessee) or subject to
contract or commitment of purchase or sale or lease (whether
as lessor or lessee) by either Seller, or which is subject
to a title retention or conditional sales agreement or other
security device, and (b) tangible personal property which is
owned, leased (whether as lessor or lessee) or subject to
contract or commitment of purchase or sale or lease (whether
as lessor or lessee) by either Seller.
(c) Except as otherwise provided herein or in
any third party agreement identified in Schedule 1.3, Buyer
shall receive, pursuant to this Agreement as of the Closing
Date, complete and exclusive right, title and interest in
and to all tangible and intangible property rights existing
in the Existing Titles and UK Titles.
(d) Except as otherwise provided herein or in
any third party agreement identified in Schedule 1.3,
Stockholder has developed the Existing Titles and UK Titles
entirely through its own efforts for its own account.
(e) To the best of Stockholder's knowledge,
except as otherwise provided herein or in any third party
agreement identified in Schedule 1.3, the Existing Titles
and UK Titles do not infringe any patent, copyright or trade
secret of any third party.
(f) Except as otherwise provided herein or in
any third party agreement identified in Schedule 1.3, all
personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the
conception and development of the Existing Titles and UK
Titles either (1) have been party to a work-for-hire
relationship with Stockholder that has accorded Stockholder
full, effective and exclusive original ownership of all
tangible and intangible property arising with respect to the
Existing Titles and UK Titles or (2) have executed
appropriate instruments of assignment in favor of
Stockholder as assignee that have conveyed to Stockholder
full, effective and exclusive ownership of all tangible and
intangible property thereby arising with respect to the
Existing Titles and UK Titles.
4.9 Litigation. Other than as set forth in
Schedule 4.9 annexed hereto, there are no suits or actions,
or administrative, arbitration or other proceedings or
governmental investigations, pending or, to the best of the
knowledge of Stockholder or Sellers, threatened, against or
relating to Sellers, the Business or any of the Purchased
Assets. There are no judgments, orders, stipulations,
injunctions, decrees or awards in effect which relate to
Sellers, the Business or any of the Purchased Assets, the
effect of which is (A) to limit, restrict, regulate, enjoin
or prohibit any business practice in any area, or the
acquisition of any properties, assets or businesses, or (B)
otherwise materially adverse to the Business or any of the
Purchased Assets.
4.10 No Violation of Law. Sellers and/or
Stockholder, as the case may be, are not engaging in any
activity or omitting to take any action as a result of which
(A) they are in violation of any law, rule, regulation,
zoning or other ordinance, statute, order, injunction or
decree, or any other requirement of any court or
governmental or administrative body or agency, applicable to
Sellers, the Business or any of the Purchased Assets,
including, but not limited to, those relating to:
occupational safety and health; environmental and ecological
protection (e.g., the use, storage, handling, transport or
disposal of pollutants, contaminants or hazardous or toxic
materials or wastes, and the exposure of persons thereto);
business practices and operations; labor practices; employee
benefits; and zoning and other land use, and (B) Seller, the
Business and/or any of the Purchased Assets have been or
will be materially and adversely affected.
4.11 Inventories. To the best knowledge of
Stockholder and Sellers, the inventories reflected on the
Balance Sheets and thereafter added consist of items of a
quality and quantity usable or saleable in the ordinary
course of business, except for obsolete materials, slow-moving items,
materials of below standard quality and not
readily marketable items, all of which have been written
down to net realizable value or adequately reserved against
on the books and records of GameTek, ART, or GameTek
Deutschland GmbH, respectively.
4.12 Intellectual Property. Annexed hereto
as Schedule 4.12 is a list containing a complete and correct
list of all (A) United States and foreign patents, trademark
and trade name registrations, trademarks and trade names,
brandmarks and brand name registrations, servicemarks and
servicemark registrations, assumed names and copyrights and
copyright registrations, owned in whole or in part or used
by Sellers or with respect to the Software Assets, and all
applications therefor, (B) inventions, discoveries,
improvements, processes, formulae, proprietary rights and
trade secrets required for the development of the Software
Assets and sequels thereof, and (C) licenses and other
agreements to which Sellers or Stockholder (with respect to
the Purchased Assets) are a party to or otherwise bound
which relate to any of the foregoing. Except as expressly
set forth in the documents listed in Schedule 4.8, (A)
Sellers or Stockholder owns or has the right to use all of
the foregoing; (B) no proceedings have been instituted, are
pending or, to the best of the knowledge of Sellers and
Stockholder are threatened, which challenge the rights of
Sellers or Stockholder in respect thereto or the validity
thereof; and (C) to the best of the knowledge of Sellers and
Stockholder, none of the aforesaid violates any laws,
statutes, ordinances or regulations, or has at any time
infringed upon or violated any rights of others, or is being
infringed by others; and (D) to the best knowledge of
Sellers and Stockholder, none of the aforesaid is subject to
any outstanding order, decree, judgment, stipulation or
charge. The foregoing sentence notwithstanding, Buyer
acknowledges that the title Dark Colony is subject to an
existing distribution agreement with Strategic Simulations,
Inc. and that the GameBoy Titles are subject to a
distribution agreement with Microware, Inc., copies of which
have been provided to Buyer. To the extent owned by
Stockholder or Sellers, the Existing Titles and UK Titles
are fully eligible for protection under applicable copyright
law and has not been forfeited to te public domain; and that
the source code and system specifications for the Existing
Titles and UK Titles have been maintained in confidence.
4.13 Tax Matters. GameTek and ART,
respectively, have filed with the appropriate governmental
agencies all tax returns and reports required to be filed by
it, and has paid in full or made adequate provision for the
payment of, all taxes, interest, penalties, assessments and
deficiencies shown to be due or claimed to be due on such
tax returns and reports, except that ART has not yet filed
tax returns for the fiscal year ending July 31, 1996. The
provision for income and other taxes which is set forth on
the balance sheets referred to in subparagraph 4.6 above,
together with any available tax receivable or loss
carryforward or other tax credit, are adequate for all
accrued and unpaid income taxes of Sellers as of June 15,
1997, whether (A) incurred in respect of or measured by
income of Sellers for any periods prior to the close of
business on that date, or (B) arising out of transactions
entered into, or any state of facts existing on or prior to
that date. To the best knowledge of Stockholder and
Sellers, Sellers have not executed or filed with any taxing
authority any agreement extending the period for the
assessment or collection of any income or other taxes, and
is not a party to any pending or, to the best of the
knowledge of Sellers, threatened, action or proceeding by
any governmental authority for the assessment or collection
of income or other taxes. The United States federal income
tax returns of Seller have not been examined by the Internal
Revenue Service ("the IRS"). Seller has paid all V.A.T. and
other taxes due with respect to periods prior to the Closing
to the extent due and payable on or before the date hereof.
Buyer, Sellers and Stockholder will cooperate with each
other in the filing of all required tax returns of Sellers
for all periods ending on or prior to Closing.
4.14 Insurance. To the best knowledge of
Stockholder and Sellers, annexed hereto as Schedule 4.14 is
a list containing a complete and correct list and summary
description of all policies of insurance relating to any of
the Purchased Assets, the Business or in which Sellers or
Stockholder is an insured party, beneficiary or loss payable
payee. Such policies are in full force and effect, all
premiums due and payable with respect thereto have been
paid, and no notice of cancellation or termination has been
received by Sellers or Stockholder with respect to any such
policy.
4.15 Banks; Powers of Attorney. Schedule
4.15 is a complete and correct list showing (i) the names of
each bank in which Sellers have an account or safe deposit
box and the names of all persons authorized to draw thereon
or who have access thereto, and (ii) the names of all
persons, if any, holding powers of attorney from Sellers or
Stockholder with respect to the Software Assets.
4.16 Employee Arrangements. To the best
knowledge of Stockholder and Sellers, Schedule 4.16 is a
complete and correct list and summary description of all (i)
union, collective bargaining, employment, management,
termination and consulting agreements to which Sellers are a
party or otherwise bound, and (ii) compensation plans and
arrangements; bonus and incentive plans and arrangements;
deferred compensation plans and arrangements; pension and
retirement plans and arrangements; profit-sharing and thrift
plans and arrangements; stock purchase and stock option
plans and arrangements; hospitalization and other life,
health or disability insurance or reimbursement programs;
holiday, sick leave, severance, vacation, tuition
reimbursement, personal loan and product purchase discount
policies and arrangements; and other plans or arrangements
providing for benefits for employees of Sellers. Said
Schedule also lists the names and compensation of all
employees of Seller whose earnings during the last fiscal
year was U.S.$50,000 or more (including bonuses and other
incentive compensation), and all employees who are expected
to receive at least said amount in respect of the present
year.
4.17 Certain Business Matters. Except as is
set forth in Schedule 4.17 neither Sellers nor the Purchased
Assets are (a) a party to or bound by any distributorship,
dealership, sales agency, franchise or similar agreement
which relates to the sale or distribution of the Purchased
Assets, (b) to the best knowledge of Sellers and
Stockholder, there are no pending, or to the best of the
knowledge of Sellers threatened, labor negotiations, work
stoppages or work slowdowns involving or affecting the
Sellers' businesses, and, to the best of the knowledge of
Sellers, no union representation questions exist, and there
are no organizing activities, in respect of any of the
employees of Sellers, or (c) to the best knowledge of
Sellers and Stockholder, the product warranties given by
Sellers, or Stockholder with respect to the Existing Titles,
or by which they are bound (complete and correct copies or
descriptions of which have heretofore been delivered by
Sellers and Stockholder to Buyer) entail no greater
obligations than are customary in the businesses of Sellers
and Stockholder.
4.18 Certain Contracts. To the best knowledge of
Sellers and Stockholder, set forth on Schedule 4.18 is a
complete and correct list of all contracts, commitments,
obligations and understandings which are not set forth in
any other Schedule delivered hereunder and to which the
Sellers are a party or otherwise bound, except for each of
those which (a) was made in the ordinary course of business,
and (b) either (i) is terminable by Sellers will be
terminable by Buyer) without liability, expense or other
obligation on thirty (30) days' notice or less, or (ii) may
be anticipated to involve aggregate payments to or by
Sellers or Stockholder of $5,000 (or the equivalent) or less
calculated over the full term thereof, and (c) is not
otherwise material to the Sellers' businesses. Also set
forth on Schedule 4.18 is a complete and correct list of
contracts, commitments, obligations and undertakings to
which the Existing Titles and UK Titles are subject. Except
as set forth in the immediately preceding sentence, there
are no agreements or arrangements in effect with respect to
the marketing, distribution, licensing or promotion of the
Existing Titles and UK Titles by any independent
salesperson, distributor, sublicensor or other remarketer or
sales organization. To the best knowledge of Stockholder
and Sellers, complete and correct copies of all contracts,
commitments, obligations and undertakings set forth on any
of the Schedules delivered pursuant to this Agreement have
been furnished by Sellers and Stockholder to Buyer or have
been made available for Buyer's inspection at Seller's
offices, and except as expressly stated on the Schedule on
which they are set forth to the best of Seller's knowledge,
(a) each of them is in full force and effect, no person or
entity which is a party thereto or otherwise bound thereby
is in default thereunder, and, to the best of the knowledge
of Sellers and Stockholder, no event, occurrence, condition
or act exists which does (or which with the giving of notice
or the lapse of time or both would) give rise to a default
or right of cancellation, acceleration or loss of
contractual benefits thereunder; (b) there has been no
threatened cancellations thereof, and there are no
outstanding disputes thereunder; except, in any of the
foregoing cases, where such default, cancellation or the
like (i) would not have a materially adverse effect on the
Business, the Sellers or the value of the Purchased Assets
or (ii) results from the change of control, transfer, sale
and assignment effected by the terms of the agreements
identified on Schedule 1.3 by reason of the Closing under
this Agreement.
4.19 Approvals. Set forth on Schedule 4.19
hereto, is a complete and correct list of all governmental
and administrative consents, permits, appointments,
approvals, licenses, certificates and franchises which, to
Stockholder's knowledge, are necessary for the operation of
the Sellers' businesses, all of which have been obtained by
Sellers and are in full force and effect.
4.20 Business Practices and Commitments.
Intentionally Omitted.
4.21 Brokers. No agent, broker, person, or
firm acting on behalf of Sellers or Stockholder, or under
their respective authority, is or will be entitled to a
financial advisory fee, brokerage commission or other like
payment in connection with any of the transactions
contemplated hereby except for the fee payable by
Stockholder to Xxxxxx & Company.
4.22 Customers and Suppliers. Stockholder
has previously provided to Buyer, to the best of
Stockholder's knowledge, a complete and correct list setting
forth, for each of GameTek and ART, for the twelve months
ended July 31, 1996 and July 31, 1997 (projected), (a) the
10 largest customers of each Seller's businesses and the
amount for which each such customer was invoiced, and (b)
the 10 largest suppliers of each Seller's businesses and the
amount of goods and services purchased from each such
supplier. To the Stockholder's knowledge, the aforesaid
suppliers and customers will continue their respective
relationships with the Sellers after the Closing Date on
substantially the same basis as now exists.
4.23 Information as to Sellers and
Stockholder. None of the representations or warranties made
by Sellers or Stockholder in this Agreement or in any
agreement executed and delivered by or on behalf of any of
them pursuant hereto are false or misleading with respect to
any material fact, or omit to state any material fact
necessary in order to make the statements therein contained
not misleading.
4.24 Nature of Securities. Stockholder
understands that as of the date hereof (a) the Stock
Consideration has not been registered under the Securities
Act of 1933, as amended (the "Act"), based upon an exemption
from such registration requirements; (b) the Stock
Consideration to be received is "restricted securities," as
said term is defined in Rule 144 of the General Rules and
Regulations promulgated under the Act; (c) the Stock
Consideration to be received may not be sold or otherwise
transferred unless it has first been registered under the
Act and applicable state securities laws or an exemption
from the registration provisions of the Act and applicable
state securities laws are available with respect to the
proposed sale or transfer; (d) the certificates evidencing
the Stock Consideration will bear a legend to the effect
that the transfer thereof is restricted; and (e) stop
transfer instructions will be placed with the transfer agent
for the Stock Consideration.
4.25 Investment Representations.
(i) Stockholder or its representatives have received and
carefully reviewed Buyer's registration statement on
Form SB-2 as declared effective by the Securities and
Exchange Commission (the "SEC") on April 14, 1997 and most
recent Form 10-QSB, and except for the foregoing and the
representations and warranties contained herein, Stockholder
has not been furnished with any other materials or
literature relating to the Buyer or the Stock Consideration;
(ii) Stockholder or its representatives have had a
reasonable opportunity to ask questions of and receive
answers from Buyer concerning Buyer and the Stock
Consideration.
4.26 As used herein, the terms "to the best
of Stockholder's knowledge", "to the best of Sellers'
knowledge" or words of similar import shall mean only the
actual knowledge of X. Xxxxxxx Blue, Jr., Xxxxxx X.
Xxxxxxxxx III, J. Xxxxxx Xxxxxxxxxx or Xxx Xxxxxxxx.
5. Representations and Warranties as to Buyer.
Buyer hereby represents and warrants to Stockholder as
follows:
5.1 Organization, Standing and Power. Buyer
is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate
its properties and to carry on its business as presently
conducted by it.
5.2 Authority. The execution and delivery
by Buyer of this Agreement and of each agreement, document
and instrument to be executed and delivered by it pursuant
hereto, the compliance by Buyer with the provisions hereof
and thereof, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of
Buyer, and Buyer has all necessary corporate power with
respect thereto. This Agreement is, and when executed and
delivered by Buyer each other agreement to be executed and
delivered by it pursuant hereto will be, the valid and
binding obligation of Buyer in accordance with its terms.
Neither the execution and delivery by Buyer of this
Agreement or of any of the aforementioned other agreements,
nor the consummation of the transactions contemplated hereby
or thereby, nor the compliance by Buyer with the provisions
hereof and thereof, will (nor with the giving of notice or
the lapse of time or both, would) conflict with or result in
a violation of any provision of the Certificate of
Incorporation or By-laws of Buyer, or in the breach of any
material agreement to which Buyer is a party or otherwise
bound.
5.3 Securities and Exchange Commission
Filings; Financial Statements. Buyer has filed all forms,
reports, statements and documents required to be filed with
the SEC since April 14, 1997, (collectively, the "SEC
Reports"), each of which has complied in all material
respects with the applicable requirements of the Act or the
Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, each as in effect on the date so filed. Buyer
has delivered to the Stockholder, in the form filed with the
SEC (including any amendments thereto), (A) its Quarterly
Report on Form 10-QSB for the quarter ended April 30, 1997
(the "April 30 10-QSB") and (B) its Prospectus dated
April 14, 1997. None of such forms, reports or documents
(including but not limited to any financial statements or
schedules included or incorporated by reference therein)
filed by the Buyer, when filed (except to the extent revised
or superseded by a subsequent filing with the SEC) contained
any untrue statement of a material fact or omitted to state
a material fact required to be stated or incorporated by
reference therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. The financial
statements included in such forms were prepared in
accordance with generally accepted accounting principles
consistently applied, and fairly present the financial
position of Buyer as at the dates thereof and its results of
operations for the periods indicated, except that any
unaudited financial statements are subject to normal
reoccurring adjustments which might be required as a result
of year-end audits.
5.4 Capitalization. The authorized capital
stock of Buyer consists of 15,000,000 shares of Common Stock
and 5,000,317 shares of Preferred stock, par value $.01 per
share, of which, as of the date hereof, 7,847,455 shares of
Common Stock and 317 shares of preferred stock are issued
and outstanding. All issued shares of Buyer's Common Stock
have been duly and validly issued and are fully paid and
nonassessable. Except as set forth in the SEC Reports or
the other documents specifically set forth in Schedule 5.4,
there are no outstanding options, warrants, rights, puts,
calls, commitments, conversion rights, plans or other
agreements of any character to which Buyer is a party or
otherwise bound which provide for the acquisition,
disposition or issuance of any issued but not outstanding,
outstanding, or authorized and unissued shares of Buyer
Common Stock or preferred stock. There is no personal
liability, and there are no preemptive or similar rights,
attached to Buyer's Common Stock.
5.5 Absence of Changes. Since January 31,
1997, there have not been (i) any material adverse changes
in the condition (financial or otherwise), assets,
liabilities, business, prospects, or results of operations
of Buyer (including, without limitation, any such adverse
change resulting from damage, destruction or other casualty
loss, whether or not covered by insurance), (ii) any
declarations, setting asides or payments of any dividend or
other distribution or payments in respect of the capital
stock of Buyer, or (iii) any changes in the accounting
principles or methods which are utilized by Buyer.
5.6 Litigation. Except as set forth in the
SEC Reports, there are no material suits or actions, or
administrative, arbitration or other proceedings or
governmental investigations, pending or, to the best of the
knowledge of Buyer threatened, against or relating to Buyer.
Except as set forth in SEC Reports there are no material
judgments, orders, stipulations, injunctions, decrees or
awards in effect which relate to Buyer, Buyer's business or
any of its assets, the effect of which is (A) to limit,
restrict, regulate, enjoin or prohibit any business practice
in any area, or the acquisition of any properties, assets or
businesses, or (B) otherwise to have a material adverse
effect on the condition (financial or otherwise), assets,
liabilities, business, prospects or results of operations of
Buyer.
5.7 Information as to Buyer. None of the
representations or warranties made by Buyer in this
Agreement or in any agreement executed and delivered by or
on behalf of it pursuant hereto are false or misleading with
respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein
contained not misleading.
6. Representations and Warranties as to Stock
Consideration. Buyer represents and warrants to the
Stockholder that the Stock Consideration, when issued, will
be, (i) duly authorized and validly issued, fully paid and
non-assessable, (ii) delivered hereunder free and clear of
any security interests, pledges, mortgages, claims, liens
and encumbrances of any kind whatsoever except that the
Stock Consideration will be "restricted securities" as such
term is defined in the rules and regulations of the
Securities Exchange Commission and will be subject to
restrictions on transfers pursuant to such rules and
regulations and State laws, and (iii) issued in compliance
with all applicable federal and state securities laws.
7. Indemnification.
7.1 Indemnification by Sellers and
Stockholder. Sellers and Stockholder hereby jointly and
severally agree to indemnify and hold Buyer harmless from
and against any and all losses, obligations, deficiencies,
liabilities, claims, damages, costs and expenses (including,
without limitation, the amount of any settlement entered
into pursuant hereto, and all reasonable legal and other
expenses incurred in connection with the investigation,
prosecution or defense of any matter indemnified pursuant
hereto) which Buyer may sustain, suffer or incur and which
arise out of, are caused by, relate to, or result or occur
from or in connection with (i) the Retained Liabilities,
(ii) the noncompliance with any applicable bulk transfer
laws of any jurisdiction, or (iii) the breach by Sellers or
Stockholder of any representation, warranty or covenant made
by it in this Agreement or in any agreement or instrument
executed and delivered pursuant hereto.
7.2 Indemnification by Buyer. Buyer hereby
agrees to indemnify and hold Sellers and Stockholder
harmless from and against any and all losses, obligations,
deficiencies, liabilities, claims, damages, costs and
expenses (including, without limitation, the amount of any
settlement entered into pursuant hereto, and all reasonable
legal and other expenses incurred in connection with the
investigation, prosecutor defense of any matter indemnified
pursuant hereto), which any of them may sustain, suffer or
incur and which arise out of, are caused by, relate to, or
result or occur from or in connection with (i) the Assumed
Liabilities, or (ii) the breach by Buyer of any
representation, warranty or covenant made by it in this
Agreement or in any agreement or instrument executed and
delivered pursuant hereto.
7.3 Third Party Claims. If a claim by a
third party is made against any party or parties hereto and
the party or parties against whom said claim is made intends
to seek indemnification with respect thereto under this
paragraph 7, the party or parties seeking such
indemnification shall promptly notify the indemnifying party
or parties, in writing, of such claim; provided, however,
that the failure to give such notice shall not affect the
rights of the indemnified party or parties hereunder unless
such failure materially and adversely affects the
indemnifying party or parties. The indemnifying party or
parties shall have ten days after said notice is given to
elect, by written notice given to the indemnified party or
parties, to undertake, conduct and control, through counsel
of their own choosing (subject to the consent of the
indemnified party or parties, such consent not to be
unreasonably withheld) and at their sole risk and expense,
the good faith settlement or defense of such claim, and the
indemnified party or parties shall cooperate with the
indemnifying parties in connection therewith; provided: (i)
in the case of Sellers and/or Stockholder as the
indemnifying party or parties, it or they shall not thereby
permit to exist any lien, encumbrance or other adverse
change upon any of the Purchased Assets, Buyers or the
Business, and (ii) the indemnified party or parties shall be
entitled to participate in such settlement or defense
through counsel chosen by the indemnified party or parties,
provided that the fees and expenses of such counsel shall be
borne by the indemnified party or parties. So long as the
indemnifying party or parties are contesting any such claim
in good faith, the indemnified party or parties shall not
pay or settle any such claim; provided, however, that
notwithstanding the foregoing, the indemnified party or
parties shall have the right to pay or settle any such claim
at any time, provided that in such event they shall waive
any right of indemnification therefor by the indemnifying
party or parties. If the indemnifying parties do not make a
timely election to undertake the good faith defense or
settlement of the claim as aforesaid, or if the indemnifying
parties fail to proceed with the good faith defense or
settlement of the matter after making such election, then,
in either such event, the indemnified party or parties shall
have the right to contest, settle or compromise the claim at
their exclusive discretion, at the risk and expense of the
indemnifying parties to the full extent set forth in
subparagraph 7.1 or 7.2 hereof, as the case may be.
7.4 Limitations Upon Indemnification. Buyer
shall not have any right to indemnification under this
paragraph 7 or otherwise to recover damages against
Stockholder based upon the breach of a representation or
warranty by Sellers or Stockholder unless and until the
amount of its claims is in excess of $100,000.00 (the
"Retained Indemnification") in the aggregate. The
obligation of Stockholder to indemnify or pay damages to
Buyer for any breach of representation or warranty shall
apply only to the excess of the aggregate amount of all such
claims over $100,000.00. Buyer shall not be entitled to
assert as a defense, counterclaim or set-off against any
portion of the Purchase Price any claim for indemnification
or damages, it being the intention of the parties that
Buyer's obligation to pay the Purchase Price and perform
under the Promissory Notes and the Registration Rights
Agreement be absolute and unconditional and that any claim
for indemnification or damages should be asserted by Buyer
in a separate action.
8. Miscellaneous Provisions.
8.1 Expenses. Except as otherwise provided
in this Agreement, Stockholder, on the one hand, shall pay
its and Sellers' costs and expenses and Buyer shall pay its
own costs and expenses in connection with this Agreement and
the transactions contemplated hereby.
8.2 Execution in Counterparts. This
Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original but all of
which taken together shall constitute one and the same
agreement, and shall become effective when one or more
counterparts has been signed by each of the parties hereto
and delivered to each of the other parties hereto.
8.3 Notices. All notices, requests, demands
and other communications given hereunder shall be in writing
and shall be deemed to have been duly given: (i) on the
date of delivery, if delivered personally or by messenger,
(ii) on the first business day following the date of timely
deposit with Federal Express or other nationally recognized
overnight courier service, if sent by such courier
specifying next day delivery, (iii) upon receipt of
confirmation of transmission, if transmitted by telecopier;
and (iv) on the third business day after mailing, if mailed
by registered or certified mail (postage prepaid, return
receipt requested); provided, however, that a notice of
change of address or telecopier number shall not be deemed
to have been given until actually received by the addressee.
All such notices, requests, demands and other communications
shall be addressed as set forth below or to such other
address or telecopier number as either party hereto may
designate to the other party hereto by like notice (except
that a notice of change of address shall only be effective
upon receipt):
If to Buyer, to: Take Two Interactive Software
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Copy to: Xxxxxx Xxxxxxxxxx LLP
23rd Floor
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
If to Stockholder, to: GameTek (FL), Inc.
x/x X. Xxxxxxx Xxxx, Xx., Xxx.
The Northern Blue Law Firm
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000-0000
Copy to: Xxxxxxxx, Xxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxx Xxxx
Xxxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
If to ART, to: Alternative Reality
Technologies, Inc.
x/x X. Xxxxxxx Xxxx, Xx., Xxx.
The Northern Blue Law Firm
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000-0000
If to GameTek, to: GameTek (UK) Limited
x/x X. Xxxxxxx Xxxx, Xx., Xxx.
The Northern Blue Law Firm
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000-0000
8.4 Amendment. This Agreement may only be
amended by a written instrument executed by each of the
parties hereto.
8.5 Entire Agreement. This Agreement
(together with the other agreements and documents being
delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof, other
than the Confidentiality Agreement which shall remain in
full force and effect.
8.6 Applicable Law. This Agreement shall be
governed by the laws of the State of New York applicable to
contracts made and to be wholly performed therein.
8.7 Headings. The headings contained herein
are for the sole purpose of convenience of reference, and
shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this
Agreement.
8.8 Assignment. Neither this Agreement nor
any rights, interests or obligations hereunder may be
assigned (by operation of law or otherwise) by any party
hereto without the prior written consent of all of the
parties hereto.
8.9 Binding Effect; Benefits. This
Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
Nothing herein contained, express or implied, is intended to
confer upon any person other than the parties hereto and
their respective heirs, legal representatives, successors
and permitted assigns, any rights or remedies under or by
reason of this Agreement.
8.10 Waiver, etc. The failure of any of the
parties hereto to at any time enforce any of the provisions
of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the
right of any of the parties hereto to thereafter enforce
each and every provision of this Agreement. No waiver of
any breach of any of the provisions of this Agreement shall
be effective unless set forth in a written instrument
executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any
such breach shall be construed or deemed to be a waiver of
any other or subsequent breach.
8.11 Severability. Any provision of this
Agreement which is held by a court of competent jurisdiction
to be prohibited or unenforceable in any jurisdiction(s)
shall be, as to such jurisdiction(s), ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision
in any other jurisdiction.
8.12 Announcements. No party hereto shall
issue any press release or otherwise make any public
statement with respect to the existence of this Agreement or
the transactions contemplated hereby without the prior
approval of the other parties hereto, except as may be
required by applicable law or the applicable rules or
regulations of any stock exchange (upon reasonable prior
written notice to the other party).
8.13 Schedules. The Schedules delivered
pursuant to this Agreement are an integral part hereof.
Each such Schedule shall be in writing, shall indicate the
subparagraph pursuant to which it is being delivered, and
shall be initialled by the delivering party.
IN WITNESS WHEREOF, this Agreement has been
executed and delivered by the parties hereto as of the date
first above written.
Attest: TAKE TWO INTERACTIVE
SOFTWARE, INC.
By: /s/ Xxxx X. Xxxxx, CEO
------------------------------
President
----------------------
Secretary
Attest: GAMETEK (FL), INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Authorized Signer
_______________________
Secretary
Attest: GAMETEK (UK), INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
President
------------------------
Secretary
Attest: ALTERNATIVE REALITY
TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Vice President
-------------------------
Secretary
TABLE OF CONTENTS
Page
1. Purchase and Sale Agreement. . . . . . . . . . . 2
1.1 Agreement of Purchase and Sale . . . . . . 2
1.2 Purchased Assets . . . . . . . . . . . . . 2
1.3 Assumed Liabilities. . . . . . . . . . . . 3
1.4 Purchase Price . . . . . . . . . . . . . . 4
2. Closing. . . . . . . . . . . . . . . . . . . . . 4
2.1 Closing Date . . . . . . . . . . . . . . . 4
2.2 Action by Buyer. . . . . . . . . . . . . . 4
2.3 Action by Stockholder. . . . . . . . . . . 5
3. Additional Covenants . . . . . . . . . . . . . . 6
3.1 Further Assurances . . . . . . . . . . . . 6
3.2 Confidentiality. . . . . . . . . . . . . . 6
3.3 Payment of Taxes Upon Transfer of
Purchased Assets . . . . . . . . . . . . . 6
3.4 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . 6
3.5 Books and Records. . . . . . . . . . . . . 7
3.6 Distribution and/or License Agreement. . . 7
3.7 Employment Agreement . . . . . . . . . . . 8
3.8 Discharge of Liens . . . . . . . . . . . . 8
3.9 Cancellation of Intercompany
Indebtedness . . . . . . . . . . . . . . . 8
3.10 Retained Liabilities. . . . . . . . . . . 8
3.11 Registration Rights . . . . . . . . . . . 8
4. Representations and Warranties as to Seller
and Stockholder . . . . . . . . . . . . . . . . 9
4.1 Organization, Standing and Power . . . . . 9
4.2 Capitalization . . . . . . . . . . . . . . 9
4.3 Interests in Other Entities. . . . . . . . 10
4.4 Authority. . . . . . . . . . . . . . . . . 11
4.5 Noncontravention . . . . . . . . . . . . . 11
4.6 Financial Statements . . . . . . . . . . . 12
4.7 Absence of Undisclosed Liabilities . . . . 13
4.8 Properties . . . . . . . . . . . . . . . . 14
4.9 Litigation . . . . . . . . . . . . . . . . 16
4.10 No Violation of Law . . . . . . . . . . . 16
4.12 Use of Name.. . . . . . . . . . . . . . . 17
4.13 Intellectual Property.. . . . . . . . . . 17
4.14 Tax Matters . . . . . . . . . . . . . . . 18
4.15 Insurance . . . . . . . . . . . . . . . . 19
4.16 Banks; Powers of Attorney . . . . . . . . 20
4.17 Employee Arrangements . . . . . . . . . . 20
4.18 Certain Business Matters. . . . . . . . . 21
4.19 Certain Contracts . . . . . . . . . . . . 21
4.20 Approvals . . . . . . . . . . . . . . . . 22
4.21 Business Practices and Commitments. . . . 23
4.22 Brokers . . . . . . . . . . . . . . . . . 23
4.23 Customers and Suppliers . . . . . . . . . 23
4.24 Information as to Sellers and
Stockholder. . . . . . . . . . . . . . . . 24
4.25 Nature of Securities. . . . . . . . . . . 24
4.26 Investment Representations. . . . . . . . 25
4.27 . . . . . . . . . . . . . . . . . . . . . 25
5. Representations and Warranties as to Buyer . . . 25
5.1 Organization, Standing and Power . . . . . 25
5.2 Authority. . . . . . . . . . . . . . . . . 26
5.3 Securities and Exchange Commission
Filings; Financial Statements. . . . . . . 26
5.4 Capitalization . . . . . . . . . . . . . . 27
5.5 Absence of Changes . . . . . . . . . . . . 28
5.6 Litigation . . . . . . . . . . . . . . . . 28
5.7 Information as to Buyer. . . . . . . . . . 29
6. Representations and Warranties . . . . . . . . . 29
7. Indemnification. . . . . . . . . . . . . . . . . 30
7.1 Indemnification by Sellers and
Stockholder. . . . . . . . . . . . . . . . 30
7.2 Indemnification by Buyer . . . . . . . . . 30
7.3 Third Party Claims . . . . . . . . . . . . 31
7.4 Limitations Upon Indemnification . . . . . 32
7.6 Validity of Transactions . . . . . . . . . 33
7.7 . . . . . . . . . . . . . . . . . . . . . 33
7.8 Performance of Agreements. . . . . . . . . 34
7.9 . . . . . . . . . . . . . . . . . . . . . 34
7.10 Expenses. . . . . . . . . . . . . . . . . 34
7.11 Execution in Counterparts . . . . . . . . 34
7.12 Notices . . . . . . . . . . . . . . . . . 34
7.13 Amendment . . . . . . . . . . . . . . . . 36
7.14 Entire Agreement. . . . . . . . . . . . . 36
7.15 Applicable Law. . . . . . . . . . . . . . 36
7.16 Headings. . . . . . . . . . . . . . . . . 36
7.17 Assignment. . . . . . . . . . . . . . . . 37
7.18 Binding Effect; Benefits. . . . . . . . . 37
7.19 Waiver, etc . . . . . . . . . . . . . . . 37
7.20 Severability. . . . . . . . . . . . . . . 38
7.21 Announcements . . . . . . . . . . . . . . 38
7.22 Schedules . . . . . . . . . . . . . . . . 38
