Exhibit 10.9


 


DATED                         8 OCTOBER 2009


 






 


between


 


MONEYGATE GROUP LIMITED


 


AND


 


THE PERSONS LISTED IN SCHEDULE 1


 


AND


 


MGT CAPITAL INVESTMENTS LIMITED


 






 


SUBSCRIPTION
AGREEMENT


 


for
shares in


 


MONEYGATE
GROUP LIMITED


 










 

















 


THIS AGREEMENT is dated                                          2009


 


PARTIES


 


(1)           MONEYGATE GROUP LIMITED, a company incorporated and registered in
England and Wales with company number 06599555 whose registered office is at 1
The Bulrushes Woodstock Way Boldon Business Park Boldon Colliery Tyne &
Wear NE35 9PF further details of which are set out in Schedule 2 (“the Company”)


 


(2)           THE SEVERAL PERSONS whose names and addresses are set out in Part 1
of Schedule 1 (the Warrantors).


 


(3)           MGT CAPITAL INVESTMENTS LIMITED incorporated and registered in
England and Wales with company number 07034382 whose registered office is at 66
Hammersmith Road, London, W14 8UD (MGT)


 


BACKGROUND


 


(1)           The Company is a
private company limited by shares incorporated under the Companies Act 1985 and is the beneficial owner of
the whole of the issued share capital of the companies set out in Part 2
of Schedule 2.


 


(2)           The Company wishes to
raise additional capital by issue at par of 9,607,843  ordinary shares of £0.00001 each for a total of £96.08 in
the capital of the Company to be issued to MGT on completion on the terms of
this Agreement. MGT has agreed to subscribe for such shares and the Company has
agreed to issue and allot these to it on the terms of this Agreement


 


(3)           Separately, MGT will
provide the MGT Secured Facilities to the Company on the terms set out therein


 


AGREED TERMS


 


1.             INTERPRETATION


 


1.1           The definitions and rules of
interpretation in this clause apply in this agreement.


 


Accounts
Date: 30 June 2009


 


Articles: the existing Articles of Association of the Company


 


Business
Day: a day (other than a Saturday, Sunday or public holiday) when banks
in London are open for business.


 


Claim and
Substantiated Claim: have the meanings set out respectively in clause 5.


 


Companies
Acts: the Companies Act 1985 and the Companies Act 2006.


 


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Completion: completion of the
subscription for the Subscription Shares in accordance with this agreement.


 


Completion Date:  means the date of this agreement


 


Connected: in relation to a
person, has the meaning contained in section 839 of the ICTA 1988.


 


Control: in relation to a
body corporate, the power of a person to secure that the affairs of the body
corporate are conducted in accordance with the wishes of that person:


 


(a)        by means of the holding of shares, or the possession of voting
power, in or in relation to that or any other body corporate; or


 


(b)        by virtue of any powers conferred by the constitutional or corporate
documents, or any other document, regulating that or any other body corporate,


 


and a Change of Control occurs if a
person who controls any body corporate ceases to do so or if another person
acquires control of it.


 


Company’s
Solicitors: Muckle LLP, Time Central , 32 Gallowgate Newcastle upon Tyne NE14BF.


 


Continuing Shareholders: the several persons who are the existing shareholders of the
Company whose names and addresses are set out in Part 1 of Schedule 1


 


Director: each person who is a
director or shadow director of the Company or any of the Subsidiaries, the
names of whom are set out in Schedule 2.


 


Disclosed: fairly disclosed
(with sufficient details to identify the nature and scope of the matter
disclosed) in or under the Disclosure Letter


 


Disclosure
Letter: the letter from the Warrantorsto MGT with the same date as this
agreement and described as the disclosure letter, including the bundle of
documents attached to it (Disclosure
Bundle).


 


Encumbrance: any interest or
equity of any person (including any right to acquire, option or right of
pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation,
security, interest, title, retention or any other security agreement or
arrangement.


 


Group: in relation to a
company (wherever incorporated) that company, any company of which it is a
Subsidiary (its holding company) and any other Subsidiaries of any such holding
company; and each company in a group is a member of the group.


 


Unless the context otherwise requires, the
application of the definition of Group to any company at any time will apply to
the company as it is at that time.


 


Listing: the successful application and
admission of all or any of the shares in the capital of the Company, or
securities representing such shares to the Official List of the UK Listing
Authority or on the AIM market operated by the London Stock 


 


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Exchange plc, or
the Nasdaq National Stock Market of the Nasdaq Stock Market Inc or to any
recognised investment exchange (as defined in section 285 of the Financial
Services and Markets Act 2000 (as amended)).


 


MGT Debenture: the debenture between MGT and the Company (to secure the MGT Loan
Agreement and the MGT Working Capital Agreement) in agreed form


 


MGT Secured Facilities: the MGT Loan Agreement and the MGT Working Capital Agreement


 


MGT Loan Agreement: the loan agreement for up to £2,000,000 between the Company and
MGT in agreed form


 


MGT Representatives: Tim Paterson-Brown and Allan Rowley or such other persons as MGT
may nominate from time to time in its absolute discretion


 


MGT Working Capital Agreement: the loan agreement for working capital of up to £250,000 between
the Company and MGT in agreed form


 


Management
Accounts: the unaudited consolidated balance sheet and the unaudited consolidated
profit and loss account of the Company and the Subsidiaries for the period of
six months ended on  the Accounts Date as
contained in the Accounts Review dated 26 August 2009 by Baker Tilly Tax
and Accountants Limited (a copy of which is attached to the Disclosure Letter).


 


New
Articles: the new Articles of
Association of the Company in agreed form;


 


New Directors: Lee Graham Hartley, Dennis Lee Reed and Alexander Hugh Edward
Campbell;


 


Original Shares: the existing shares of £0.00001 held by the Continuing Shareholders
in the proportions set against their names in Part 1 of Schedule 1


 


Properties: has the meaning
given in paragraph 13.1 of Part 1 of Schedule 4.


 


Service Agreements: the service agreements between the Company and the New Directors in
agreed form


 


Shares: the Ordinary Shares of £0.00001 each in the Company.


 


Subscription
Price:  £96.08


 


Subscription
Shares:  the 9,607,843
new Ordinary shares of £0.00001 each to be subscribed by MGT pursuant to clause
2


 


Subsidiary: in relation to a
company wherever incorporated (a holding company) means a “subsidiary” as
defined in section 736 of the Companies Act 1985 and any other company which is
a subsidiary (as so defined) of a company which is itself a subsidiary of such
holding company.


 


Unless the context otherwise requires, the
application of the definition of Subsidiary to any company at any time will
apply to the company as it is at that time.


 


Subsidiaries: the wholly owned subsidiaries of the Company listed in Schedule 2


 


Transaction: the transaction
contemplated by this agreement or any part of that transaction.


 


3

















 


1.2           Warranties: the representations and
warranties in clause 4 and Schedule 4.Clause and schedule headings do not
affect the interpretation of this agreement.


 


1.3           A person includes
a corporate or unincorporated body.


 


1.4           Words in the singular include the plural
and in the plural include the singular.


 


1.5           A reference to one gender includes a
reference to the other gender.


 


1.6           A reference to a particular statute,
statutory provision or subordinate legislation is a reference to it as it is in
force at the date of this agreement, taking account of any amendment or
re-enactment and includes any statute, statutory provision or subordinate legislation
which it amends or re-enacts and subordinate legislation for the time being in
force made under it.


 


1.7           Writing or written
includes faxes and email.


 


1.8           Documents in agreed form
are documents in the form agreed by the parties or on their behalf and
initialled by them or on their behalf for identification.


 


1.9           References to clauses and schedules are to
the clauses and schedules of this agreement; references to paragraphs are to
paragraphs of the relevant schedule.


 


1.10         References to this agreement include this
agreement as amended or varied in accordance with its terms.


 


1.11         References to “Subsidiary” or “Subsidiaries”
are references to a Subsidiary or Subsidiaries of the Company.


 


2.             SUBSCRIPTION SHARES AND MGT SECURED
FACILITIES


 


2.1           MGT applies for the allotment and issue to
it at Completion of the Subscription Shares, at the Subscription Price, payment
for which shall be made in accordance with clause 3, subject to the Articles
and the terms and conditions contained in this Agreement.


 


2.2           For the purposes of clause 2.1 the
Subscription Shares shall rank pari passu with the Original Shares, including
the right to receive all dividends declared made or paid after Completion


 


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2.3           The Company warrants to MGT that, on the
Completion Date, the Company shall be entitled to allot the Subscription Shares
to MGT on the terms of this agreement, without the consent of any other person.


 


2.4           The Warrantors warrant to MGT that:


 


(a)        The Company has the power and authority to enter into and perform
its obligations under this agreement;


 


(b)        when executed, the Company’s obligations under this agreement will
be binding on it; and


 


(c)        execution and delivery of, and performance by the Company of its
obligations under this agreement will not result in any breach of applicable
law.


 


2.5            Each of the Continuing
Shareholders irrevocably waives any pre-emption rights that he or his nominees
may have under the Articles or otherwise, so as to enable the issue of the Subscription
Shares to proceed.


 


3.             COMPLETION


 


3.1           Completion shall take place simultaneously with the
execution of this agreement at a place and time agreed in writing by
the parties or electronically.


 


3.2           Completion of the subscription by MGT for
the Subscription Shares shall take place on the Completion Date when the events
set out in clause 3.3 below shall take place in such order as MGT may require.


 


3.3           The following events shall occur on the
Completion Date:


 


(a)        MGT shall pay the Company the Subscription Price by electronic
transfer to the Company’s bank account as advised to MGT by the Company.
Payment made in accordance with this clause 3.3(a) shall constitute a good
discharge for MGT of its obligations under this clause3;


 


(b)        MGT will enter into the MGT Secured Facilities.


 


(c)        a meeting of the Board shall be held at which the Company shall:


 


(i)         adopt the New Articles;


 


(ii)        subject to receipt of the
Subscription Price, issue and allot the Subscription Shares credited as fully
paid to MGT and enter its name in the register of members in respect of them;


 


(iii)       execute and deliver to MGT a
share certificate for the Subscription Shares;


 


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(iv)       accept the resignations of each
of the Continuing Shareholders  as
employees of the Company;


 


(v)        appoint MGT as Company
Secretary and a Director (on the basis that 
MGT shall be represented on the Board of the Company by the MGT
Representatives who shall each be entitled to exercise one vote on the Board
notwithstanding the Articles or the New Articles or otherwise) ;


 


(vi)       approve and authorise the
execution of the Service Agreements by the Company; and


 


(vii)      pass any other resolutions
required to carry out the Company’s obligations under this agreement;


 


(d)        the Company and each of the New Directors shall enter into the
Service Agreements; and


 


(e)        the Company Secretary shall be instructed to file all appropriate
resolutions and forms with the Registrar of Companies within the time limits
prescribed for filing each of them.


 


4.             WARRANTIES


 


4.1           MGT is entering into this Agreement on the
basis of, and in reliance on, the Warranties.


 


4.2           The Warrantors jointly and severally
warrant and represent to MGT that each Warranty is true, accurate and not
misleading on the date of this agreement except as Disclosed.


 


4.3           Warranties qualified by the expression so far as the Warrantors  are
aware  (or any similar
expression) are deemed to be given to the best of the knowledge, information
and belief of the Warrantors after they have made all reasonable and careful
enquiries. Each of the Warranties is separate and, unless otherwise
specifically provided, is not limited by reference to any other Warranty or any
other provision in this agreement.


 


4.4           With the exception of the matters
Disclosed, no information of which MGT and/or its agents and/or advisers has
knowledge (actual, constructive or imputed) or which could have been discovered
(whether by investigation made by MGT or made on its behalf) shall prejudice or
prevent a Claim or reduce any amount recoverable thereunder.


 


4.5           The Company and the Warrantors undertake to
inform MGT in writing immediately on becoming aware of any breach of the
Warranties, supplying brief particulars.


 


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5.             LIMITATIONS ON CLAIMS


 


5.1           The definitions and rules of
interpretation in this clause apply in this Agreement.


 


Claim: a claim for breach
of any of the Warranties as may be applicable.


 


Substantiated
Claim: a Claim in respect of which liability is admitted by the party
against whom such Claim is brought, or which has been adjudicated on by a Court
of competent jurisdiction and no right of appeal lies in respect of such
adjudication, or the parties are debarred by passage of time or otherwise from
making an appeal.


 


A Claim is connected with
another Claim or Substantiated Claim if they all arise out of the occurrence of
the same event or relate to the same subject matter.


 


5.2           This clause limits the liability of the
Warrantors in relation to any Claim.


 


5.3           The liability of the Warrantors for all
Substantiated Claims when taken together shall not exceed £250,000


 


5.4           The Warrantors shall not be liable for a
Claim unless:


 


(a)        the amount of a Substantiated Claim, or of a series of connected
Substantiated Claims of which that Substantiated Claim is one, exceeds £15,000;


 


(b)        the amount of all Substantiated Claims that are not excluded under
clause 5.4(a)  when taken together, exceeds £20,000 in which case the
whole amount (and not just the amount by which the limit in this clause  5.4(b) is exceeded) is recoverable by
MGT.


 


5.5           The Warrantors are not liable for any Claim
to the extent that the Claim:


 


(a)        relates to matters Disclosed; or


 


(b)        relates to any matter specifically and fully provided for in the
Management Accounts.


 


5.6           The Warrantors are not liable for a Claim
unless MGT has given to the Warrantors notice in writing of the Claim,
summarising the nature of the Claim as far as it is known to the party making
the claim and the amount claimed within the period of one year  beginning with the Completion Date,


 


5.7           Nothing in this clause 5 applies to a Claim
that arises or is delayed as a result of dishonesty, fraud, wilful misconduct
or wilful concealment by either party, their respective agents or advisers.


 


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6.             MGT’S CONSENT TO FUTURE TRANSACTIONS


 


6.1           The Company
undertakes to MGT that it shall not, for so long as MGT is the holder of any
Shares, take any of the following actions without the prior written consent of
MGT, such consent not to be unreasonably withheld or delayed, and each of the
Warrantors undertake (as a separate covenant by each of
them) that without the prior written consent of MGT
such consent not to be unreasonably withheld or delayed,
they shall use reasonable endeavours to procure that the Company shall not take
any of the following actions:


 


(i)         issue or allot, or permit any subsidiary to
issue or allot, any share or security (including stock options); or


 


(ii)        consolidate, merge or amalgamate with any other
person or enter into any joint venture, partnership, consortium or joint
purchase arrangement; or


 


(iii)      sell, transfer or otherwise
dispose of the whole (or substantially the whole) of the Company’s business ,
trade or assets


 


7.             TRANSFER OF SHARES


 


7.1           Notwithstanding the Articles or the New
Articles or otherwise and subject to (1) the terms of clause 8 below and (2) MGT
owning Shares equal to 10% or more of the issued share capital of the Company,
the Warrantors undertake to MGT that they shall not, and shall not agree to
create any Encumbrance over, transfer or otherwise dispose of the whole or any
part of their respective interests in or grant any option over any Shares to
any person except with the prior written consent of MGT, such consent not to be
unreasonably withheld or delayed;


 


8.             RIGHT OF FIRST REFUSAL


 


8.1           Each of the Warrantors shall have the right
of first refusal to purchase their shares from each other in such proportions
as they may agree between them.  MGT will
have any second right of refusal


 


8.2           Each party acknowledges and agrees that,
upon the sale of any Shares owned by MGT, MGT shall not be obliged at any time
to give warranties or indemnities (except a warranty as to title to the shares
held by MGT).


 


8.3           This clause shall cease to have effect
automatically on (a) a Listing or (b) where all of the parties agree
in writing or (c) a resolution is passed for the winding up of the Company


 


8
















 


9.                                       PERSONAL GUARANTEES
LIABILITIES


 


9.1                                 Subject
to clause 9.2, the Warrantors undertake to the Company and to MGT (jointly and
severally) to repay any sums still to be paid by the Company  after the date of this Agreement in respect
of personal guarantees given to Royal Bank of Scotland by the Continuing
Shareholders (or any of them) and/or Graham Robert Jackson against an overdraft
facility granted to Moneygate Limited. (“PG Liabilities”)


 


9.2                                 Any
repayments in respect of the PG Liabilities shall be made as follows:


 


(a)                        They shall be borne equally by the
Continuing Shareholders


 


(b)                       the PG Liabilities shall be
repayable within three years from the date of this Agreement, initially out of
bonuses rather than monthly salary; and


 


(c)                        Subject to clause 9.2(b), in the
event any of the Continuing Shareholders ceases to be a director of the
Company, the balance of the PG Liabilities then remaining, if any, shall become
the of the responsibility of the other Continuing Shareholders, provided that
if all of the Continuing Shareholders ceases to be directors of Company at the
same (or substantially the same time), the balance of the PG Liabilities then
remaining, if any, shall be repayable in full immediately.


 


10.                               CONFIDENTIALITY AND
ANNOUNCEMENTS


 


10.1                           Except so far as may be
required by law, and in such circumstances only after prior consultation with
each other,  neither party shall ,at any
time, disclose to any person or use to the detriment of the other this
agreement or any trade secret or other confidential information which they hold
in relation to the  other or its affairs.


 


10.2                           No party shall make any
announcement relating to this agreement or its subject matter without the prior
written approval of the other party except as required by law or by any legal
or regulatory authority (in which case the parties shall co-operate, in good
faith, in order to agree the content of any such announcement so far as
practicable prior to it being made).


 


11.                               FURTHER ASSURANCE


 


Both parties shall (at their expense) promptly execute
and deliver all such documents, and do all such things, as either party may
from time to time reasonably require for the purpose of giving full effect to
the provisions of this agreement.


 


9

















 


12.                               REPORTING REQUIREMENTS


 


12.1                           The Continuing
Shareholders shall procure that the Company keeps true, accurate and up-to-date
books and records of all the affairs of the Company,


.


12.2                           Within 2
weeks from the end of each calendar month, the Company must prepare and send to
MGT:


 


(a)                        unaudited management
accounts of the Company for that month,


 


(b)                       cumulative management
accounts for the current accounting period up to and including that month,


 


(c)                        rolling cash flow
forecasts for a period of 12 months from the end of each month, and


 


(d)                       details of the
capital expenditure and work in progress of the Company at that date.


 


12.3                           The
Directors and the Company shall provide annual audited reports and accounts for
the Company within 3 months after each financial year end.


 


12.4                           Not
later than one month before the start of each of the Company’s financial years,
the Company must at its own cost prepare and send to the board an annual budget
and business plan for the Company for that financial year..


 


12.5                           In addition to accounts and management information, the Company must
supply to MGT any other information relating to the Company it may require. In
particular it must:


 


(a)                        keep MGT fully and promptly informed as to all
material developments regarding the Company’s financial and business affairs,


 


(b)                       promptly notify MGT of any significant
litigation or arbitration affecting or likely to affect the Company, and of any
bona fide offer to purchase or subscribe for any share capital of the Company,
and


 


(c)                        immediately notify MGT in writing if the
Company and the Directors become aware of any material litigation, arbitration
or administrative proceedings current, pending or threatened by or against the
Company or the Directors which might have a material adverse affect on the
Company or the reputation of the Directors.


 


12.6                           If the Company fails to
keep accounts or supply information as required by this agreement, MGT may
appoint any accountants, auditors and other professionals it thinks fit in order to prepare the required
information, accounts or documents, and the Company must pay the cost of doing
so on demand.


 


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13.                               WHOLE AGREEMENT


 


13.1                           This agreement, and any
documents referred to in it, constitute the whole agreement between the parties
and supersede any arrangements, understanding or previous agreement between
them relating to the subject matter they cover.


 


13.2                           Nothing in this clause 13
operates to limit or exclude any liability for fraud.


 


14.                               VARIATION AND WAIVER


 


14.1                           Any variation of this
agreement shall be in writing and signed by or on behalf of the parties.


 


14.2                           Any waiver of any right
under this agreement is only effective if it is in writing and it applies only
to the party to whom the waiver is addressed and to the circumstances for which
it is given and shall not prevent the party who has given the waiver from
subsequently relying on the provision it has waived.


 


14.3                           No failure to exercise or
delay in exercising any right or remedy provided under this agreement or by law
constitutes a waiver of such right or remedy or shall prevent any future
exercise in whole or in part thereof.


 


14.4                           No single or partial
exercise of any right or remedy under this agreement shall preclude or restrict
the further exercise of any such right or remedy.


 


14.5                           Unless specifically
provided otherwise, rights arising under this agreement are cumulative and do
not exclude rights provided by law.


 


15.                               COSTS


 


Unless otherwise provided, all costs in connection
with the negotiation, preparation, execution and performance of this agreement,
and any documents referred to in it, shall be borne by the party that incurred
the costs.


 


16.                               NOTICE


 


16.1                           A notice given under this
agreement:


 


(a)                        shall be in writing and sent for the attention of the person, and to
the address or fax number, specified in clause 16.3 (or such other address, fax
number or person as each party may notify to the others in accordance with the
provisions of clause 16.3); and


 


(b)                       shall be:


 


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(i)                           delivered personally; or


 


(ii)                        sent by fax; or


 


(iii)                     sent by pre-paid first-class post or recorded delivery.


 


16.2                           Any notice to be given to
or by the Company or the Warrantors or MGT under this agreement is deemed to
have been properly given if it is given to or by the Company’s, Warrantors’ or
MGT’s representative named in clause 16.3 Any notice required to be given to or
by some only of the Warrantors  shall be
given to or by the  Warrantor concerned
(and in the case of a notice to the Warrantors) at their address or fax number
as set out in Part 1 Schedule 1


 


16.3                           The addresses for service
of notice are:


 


(a)                        WARRANTORS’ REPRESENTATIVE


 


(i)                           name: Dennis Lee Reed


 


(ii)                        address: 1, The Bulrushes, Boldon Business Park, Boldon Colliery,
Tyne & Wear NE35 9PF


 


(b)                       The Company


 


(i)                           name: Dennis Lee Reed


 


(ii)                        address: 1, The Bulrushes, Boldon Business Park, Boldon Colliery,
Tyne & Wear NE35 9PF


 


(c)                        MGT


 


(i)                           name: MGT Capital Investments Limited


 


(ii)                        address: 66 Hammersmith Road London W14  8UD


 


(iii)                     for the attention of: Tim Paterson-Brown


 


16.4                           A notice is deemed to
have been received:


 


(a)                        if delivered personally, at the time of delivery; or


 


(b)                       in the case of fax, at the time of transmission; or


 


(c)                        in the case of pre-paid first class post, recorded delivery, 2
Business days from the date of posting; or


 


(d)                       if deemed receipt under the previous paragraphs of this clause 13.4
is not within business hours (meaning 9.00 am to 5.30 pm Monday to Friday on a
day that is not a public holiday in the place of receipt), when business next
starts in the place of receipt.


 


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16.5                           To prove service, it is
sufficient to prove that the notice was transmitted by fax to the fax number of
the party or, in the case of post, that the envelope containing the notice was
properly addressed and posted.


 


17.                               INDEMNITY


 


Notwithstanding any other term of this Agreement, the
Warrantors hereby jointly and severally indemnify the Company (on a continuing
basis) against all and any losses, charges or expenses incurred (or to be
incurred) in relation to a claim made by Tenon regarding the payment of
allegedly illegal dividends declared by the Warrantors in their capacity of
former directors of Moneygate Limited in the financial year ending 31st March 2008, all as more fully described
in the Disclosure Letter.


 


18.                               SEVERANCE


 


18.1                           If any provision of this
agreement (or part of a provision) is found by any court or administrative body
of competent jurisdiction to be invalid, unenforceable or illegal, the other
provisions shall remain in force.


 


18.2                           If any invalid,
unenforceable or illegal provision would be valid, enforceable or legal if some
part of it were deleted, the provision shall apply with whatever modification
is necessary to give effect to the commercial intention of the parties.


 


19.                               AGREEMENT SURVIVES COMPLETION


 


This agreement (other than obligations that have
already been fully performed) remains in full force after Completion.


 


20.                               THIRD PARTY RIGHTS


 


20.1                           Subject to clause 21 and
23, this agreement and the documents referred to in it are made for the benefit
of the parties and their successors and permitted assigns and are not intended
to benefit, or be enforceable by, anyone else.


 


20.2                           Each party represents to
the other that their respective rights to terminate, rescind or agree any
amendment, variation, waiver or settlement under this agreement are not subject
to the consent of any person that is not a party to this agreement.


 


21.                               SUCCESSORS


 


The rights and obligations of the Company, the
Warrantors and MGT under this agreement shall continue for the benefit of, and
shall be binding on, their respective successors and permitted assigns.


 


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22.                          COUNTERPARTS


 


This agreement may be executed in any number of
counterparts, each of which is an original and which together have the same
effect as if each party had signed the same document.


 


23.                          ASSIGNMENT AND MGT SHARE
TRANFERS


 


23.1                           Except as provided otherwise
in this agreement, no party may assign, or grant any Encumbrance or security
interest over, any of its rights under this agreement.


 


23.2                           Each party that has
rights under this agreement is acting on its own behalf.


 


23.3                           For the avoidance of
doubt, nothing in this clause or otherwise shall prejudice the right of MGT to (1) transfer
any Shares in the Company to such persons as it thinks fit in its absolute
discretion and (2) grant any Encumbrance or security interest over any
Shares it owns in the Company.


 


23.4                           Notwithstanding any other
provision of this agreement, if MGT:


 


(a)                        shall transfer all of the Subscription Shares, the transferee shall
be entitled to the benefit of clauses 7 and 8 as set out in this Agreement as
if the reference to MGT therein was a reference to the transferee; and


 


(b)                       shall transfer part only of the Subscriptions Shares, clause 8 shall
operate so that the second right of refusal shall apply to both MGT and the
transferee pro-rata to the amount of Subscription Shares owned by MGT and the
transferee.


 


24.                               GOVERNING LAW AND
JURISDICTION


 


24.1                           This agreement and any
disputes or claims arising out of or in connection with its subject matter or
formation (including non-contractual disputes and claims) are governed by and
construed in accordance with the law of England.


 


24.2                           The parties irrevocably
agree that the courts of England have exclusive jurisdiction to settle any
dispute or claim that arises out of or in connection with this agreement or its
subject matter or formation (including non-contractual disputes and claims).


 


This
agreement has been entered into on the date stated at the beginning of it.


 


14

















 


Schedule
1 Particulars of the Company and Warrantors/Continuing Shareholders


 


Part 1.
Particulars of the Continuing Shareholders/Warrantors


 


	
  Warrantors
  names and addresses

  	
   

  	
  Number of

  Shares

  	
   

  	
  Nominal value per share

  	
   

  	
  Total Value

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lee Hartley of 160 Bents Park Road, South Shields, NE33 3NB

  	
   

  	
  3,500,000

  	
   

  	
  £

  	
  0.00001

  	
   

  	
  £

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dennis Reed of 3, Corbiere Close, Sunderland SR3 2SP

  	
   

  	
  3,500,000

  	
   

  	
  £

  	
  0.00001

  	
   

  	
  £

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alexander Campbell 2, Garden
  Cottages, Croxdale Hall, Durham DH6 5JP

  	
   

  	
  3,000,000

  	
   

  	
  £

  	
  0.00001

  	
   

  	
  £

  	
  30

  	
   

  



 


15

















 


Schedule
2 Particulars of the Company and the Subsidiaries


 


Part 1
The Company


 


	
  Name:

  	
   

  	
  Moneygate
  Group Limited

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  06599555

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital  Amount:

  	
   

  	
  Amount:
  £1,000 

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of Original Shares held):

  	
   

  	
  Lee
  Graham Hartley (3,500,000)

  Dennis Lee Reed (3,500,000)

  Alexander Hugh Edward Campbell (3,000,000)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Auditor

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Registered charges

  	
   

  	
  None

  



 


Part 2
The Subsidiaries


 


	
  Name:

  	
   

  	
  MONEYGATE
  IFA LIMITED

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  6599587

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital  Amount:

  	
   

  	
  Amount:
  £1,000

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of shares held):

  	
   

  	
  Moneygate
  Group Limited (10,000,000 ordinary shares)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Registered charges

  	
   

  	
  None

  



 


16

















 


	
  Name:

  	
   

  	
  MONEYGATE
  NETWORK LIMITED

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  6617881

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital

  	
   

  	
  Amount:
  £1,000

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of shares held):

  	
   

  	
  Moneygate
  Group Limited (10,000,000 ordinary shares)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Registered Charges

  	
   

  	
  None

  



 


 


	
  Name:

  	
   

  	
  MONEYGATE
  DIRECT LIMITED

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  6599571

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital

  	
   

  	
  Amount:
  £1000 

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of shares held):

  	
   

  	
  Moneygate
  Group Limited (10,000,000 ordinary shares)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Registered Charges

  	
   

  	
  None

  



 


 


	
  Name:

  	
   

  	
  MONEYGATE
  OUTSOURCING LIMITED

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  6617912

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital

  	
   

  	
  Amount:
  £1,000

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of shares held):

  	
   

  	
  Moneygate
  Group Limited (10,000,000 ordinary shares)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Registered Charges

  	
   

  	
  None

  



 


17

















 


	
  Name:

  	
   

  	
  MONEYGATE
  SOLUTIONS LIMITED

  
	
   

  	
   

  	
   

  
	
  Registration number:

  	
   

  	
  6617851

  
	
   

  	
   

  	
   

  
	
  Registered office:

  	
   

  	
  1 The Bulrushes,
  Woodstock Way, Boldon Business Park, Tyne & Wear, NE35 9PF

  
	
   

  	
   

  	
   

  
	
  Authorised share capital

  	
   

  	
  Amount:
  £1,000

  Divided into: 100,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Issued share capital

  	
   

  	
  Amount:
  £100

  Divided into: 10,000,000 ordinary shares

  
	
   

  	
   

  	
   

  
	
  Registered shareholders (and number of shares held):

  	
   

  	
  Moneygate
  Group Limited (10,000,000 ordinary shares)

  
	
   

  	
   

  	
   

  
	
  Directors and shadow directors:

  	
   

  	
  Dennis
  Lee Reed

  
	
   

  	
   

  	
   

  
	
  Secretary:

  	
   

  	
  Alexander
  Hugh Edward Campbell

  
	
   

  	
   

  	
   

  
	
  Registered Charges

  	
   

  	
  None

  



 


18
















 


Schedule
3 Completion


 


Part 1.   What the Company  shall deliver to MGT at Completion


 


1.            At Completion, the Company
shall deliver or cause to be delivered to MGT 
the following documents and evidence:


 


(a)        the documents set out at
clause 3 above including the share certificates for the Subscription Shares in
the name of the Company


 


(b)        deliver the written
resignations, executed as deeds and in the agreed form between the Company and
the Continuing Shareholders and secretaries of the Company and each of the
Subsidiaries with effect from the end of the relevant board meeting:


 


(c)        copy of leasehold agreement
relating to the Properties;


 


Part 2.   Matters for the board meetings at
Completion


 


1.            The Company shall cause a
board meeting to be held at Completion at which the following resolutions shall
be passed:


 


(a)        to issue and allot the
Subscription Shares shall be passed.


 


(b)        the appointment of the New
Directors:


 


(c)        the appointment of MGT as
non-executive Director at a fee of £80,000 exclusive of VAT per annum and on
the basis that  MGT shall be  represented on the Board of the Company by
the MGT Representatives who shall each be entitled to exercise one vote on the
Board notwithstanding the Articles or the New Articles or otherwise


 


(d)        the appointment of MGT as
Company Secretary:


 


(e)        The adoption of the New
Articles


 


19

















 


Schedule
4 the Warranties


 


Part 1.   General warranties


 


1.             POWER TO ENTER INTO THIS AGREEMENT


 


1.1          The Warrantors have all requisite power and
authority to enter into and perform this agreement in accordance with its terms
and the other documents referred to in it.


 


1.2          Compliance with the terms of this agreement
and the documents referred to in it shall not breach or constitute a default under
any of the following:


 


(a)        any agreement or instrument to
which any of the Sellers is a party or by which any of them is bound; or


 


(b)        any order, judgment, decree or
other restriction applicable to any of the Sellers.


 


2.             SHARES IN THE COMPANY AND SUBSIDIARIES


 


2.1          The Original Shares constitute the whole of
the allotted and issued share capital of the Company and are fully paid.


 


2.2          Part 2 of Schedule 2 lists all the
Subsidiaries of the Company at the date of this agreement and sets out
particulars of their allotted and issued share capital.


 


2.3          The Company is the sole legal and
beneficial owner of the whole allotted and issued share capital of each of the
Subsidiaries.


 


2.4          The issued shares of the Subsidiaries are
fully paid up.


 


2.5          The Original Shares of the Subsidiaries are
free from all Encumbrances and no commitment has been given to create an
Encumbrance affecting the Original Shares of the Subsidiaries.


 


2.6          No right has been granted to any person to
require the Company or any of the Subsidiaries to issue any share capital and
no Encumbrance has been created and no commitment has been given to create an
Encumbrance in favour of any person affecting any unissued shares or debentures
or other unissued securities of the Company or any of the Subsidiaries.


 


20

















 


3.             INFORMATION


 


3.1          All information contained in the Disclosure
Letter is complete, accurate and not misleading.


 


3.2          The particulars relating to the Company and
the Subsidiaries in this agreement are accurate and not misleading.


 


4.             COMPLIANCE WITH LAWS


 


The Company and each of the Subsidiaries has at all
times conducted its business in accordance with its memorandum and articles of
association and in all material respects with all applicable laws and
regulations.


 


5.             LICENCES AND CONSENTS


 


5.1          The Company and each of the Subsidiaries
has all necessary licences, consents, permits and authorities necessary to
carry on its business in the places and in the manner in which its business is
now carried on, all of which are valid and subsisting.


 


5.2          There is no reason why any of those
licences, consents, permits and authorities should be suspended, cancelled,
revoked or not renewed on the same terms.


 


6.             INSURANCE


 


6.1          The insurance policies maintained by or on
behalf of the Company and the Subsidiaries provide full indemnity cover against
all losses and liabilities including business interruption and other risks that
are normally insured against by a person carrying on the same type of business
as the Company and the Subsidiaries.


 


6.2          There are no material outstanding claims
under, or in respect of the validity of, any of those policies and so far as
the Seller is aware, there are no circumstances likely to give rise to any
claim under any of those policies.


 


6.3          All the insurance policies are in full
force and effect, are not void or voidable, nothing has been done or not done
which could make any of them void or voidable and Completion will not
terminate, or entitle any insurer to terminate, any such policy.


 


7.             DISPUTES AND INVESTIGATIONS


 


7.1          Neither the Company nor any of the
Subsidiaries nor any of their respective Directors nor any person for whom the
Company or any of the Subsidiaries is vicariously liable:


 


(a)        is engaged in any litigation,
administrative, mediation or arbitration proceedings or other proceedings or
hearings before any statutory or 


 


21

















 


governmental body, department, board or
agency (except for debt collection in the normal course of business); or


 


(b)        is the subject of any
investigation, inquiry or enforcement proceedings by any governmental,
administrative or regulatory body.


 


7.2          No such proceedings, investigation or
inquiry as are mentioned in paragraph 7.1 of this Schedule 4 have been
threatened or are pending and there are no circumstances likely to give rise to
any such proceedings.


 


8.             CONTRACTS


 


8.1          The definition in this paragraph applies in
this agreement.


 


Material
Contract: an agreement or arrangement to which the Company or any of the
Subsidiaries is a party or is bound by and which is of material importance to
the business, profits or assets of the Company or any of the Subsidiaries.


 


8.2          Except for the agreements and arrangements
Disclosed, neither the Company nor any of the Subsidiaries is a party to or
subject to any agreement or arrangement which:


 


(a)        is a Material Contract; or


 


(b)        is of a long term, unusual or
exceptional nature or restricts the freedom of the Company or any of the
Subsidiaries; or


 


(c)        is not in the ordinary and
usual course of business of the Company or any of the Subsidiaries; or


 


(d)        involves agency or
distributorship; or


 


(e)        involves partnership, joint
venture, consortium, joint development, shareholders or similar arrangements.


 


8.3          Each Material Contract is in full force and
effect and binding on the parties to it. Neither the Company nor any of the
Subsidiaries have defaulted under or breached a Material Contract and:


 


(a)        no other party to a Material
Contract has defaulted under or breached such a contract; and


 


(b)        no such default or breach by
the Company, any of the Subsidiaries or any other party is likely or has been
threatened.


 


8.4          No notice of termination of a Material
Contract has been received or served by the Company or any of the Subsidiaries
and there are no grounds for determination, rescission, avoidance, repudiation
or a material change in the terms of any such contract.


 


22

















 


9.             TRANSACTIONS WITH DIRECTORS


 


9.1          There is no outstanding indebtedness or
other liability (actual or contingent) and no outstanding contract, commitment
or arrangement between the Company and any of the following, or between any of
the Subsidiaries and any of the following:


 


(a)        any of the Directors or any
person Connected with any of the Directors ; or


 


(b)        any director of a member of
the Company’s Group or any person Connected with such a member or director.


 


10.          FINANCE AND GUARANTEES


 


10.1        No guarantee, mortgage, charge, pledge,
lien, assignment or other security agreement or arrangement has been given by
or entered into by the Company or any of the Subsidiaries or any third party in
respect of borrowings or other obligations of the Company or the Subsidiaries
or any other person.


 


10.2        Neither the Company nor any of the
Subsidiaries has any outstanding loan capital, or has lent any money that has
not been repaid, and there are no debts owing to the Company or the
Subsidiaries other than debts that have arisen in the normal course of
business.


 


10.3        Neither the Company nor any of the
Subsidiaries has:


 


(a)        factored any of its debts or
discounted any of its debts or engaged in financing of a type which would not
need to be shown or reflected in the Management Accounts; or


 


(b)        waived any right of set-off it
may have against any third party.


 


10.4        All debts (less any provision for bad and
doubtful debts) owing to the Company or any of the Subsidiaries reflected in
the Management Accounts and all debts subsequently recorded in the books of the
Company and the Subsidiaries have either prior to the date of this agreement
been realised or will, within three months after the date of this agreement,
realise in cash their full amount as included in those Management Accounts or
books and none of those debts nor any part of them has been outstanding for
more than two months from its due date for payment.


 


10.5        Full particulars of all money borrowed by
the Company and each of the Subsidiaries (including full particulars of the
terms on which such money has been borrowed) have been Disclosed.


 


10.6        No indebtedness of the Company or any of
the Subsidiaries is due and payable and no security over any of the assets of
the Company or any of the Subsidiaries is now enforceable, whether by virtue of
the stated maturity date of the indebtedness having 


 


23

















 


been
reached or otherwise. Neither the Company nor any of the Subsidiaries has
received any notice whose terms have not been fully complied with and/or
carried out from any creditor requiring any payment to be made and/or
intimating the enforcement of any security which it may hold over the assets of
the Company or the Subsidiaries.


 


11.          ASSETS


 


11.1        The Company or one of the Subsidiaries is
the full legal and beneficial owner of, and has good and marketable title to,
all the assets included in the Management Accounts, any assets acquired since
the Accounts Date and all other assets used by the Company or the Subsidiaries
except for those disposed of since the Accounts Date in the normal course of
business and such assets are free from any Encumbrance.


 


11.2        None of the assets shown in the Management
Accounts or acquired by the Company or any of the Subsidiaries since the
Accounts Date or used by the Company or any of the Subsidiaries is the subject
of any lease, lease hire agreement, hire purchase agreement or agreement for
payment on deferred terms or is the subject of any licence or factoring
arrangement.


 


12.          DATA PROTECTION


 


12.1        The Company and the Subsidiaries have
notified registrable particulars under the Data Protection Act 1998 of all
personal data held by them and:


 


(a)        have renewed such
notifications and have notified any changes occurring in between such
notifications as required by that Act;


 


(b)        have paid all fees payable in
respect of such notifications;


 


(c)        the contents of such
notifications (copies of which are attached to the Disclosure Letter) are
complete and accurate; and


 


(d)        there has been no unauthorised
disclosure of personal data outside the terms of such notifications.


 


12.2        The Company and the Subsidiaries have:


 


(a)        complied in all respects with
the Data Protection Act 1984 and the Data Protection Act 1998 including in
relation to any manual data in respect of which the transitional exemptions
under Schedule 8 of the Data Protection Act 1998 have now expired);


 


(b)        satisfied any requests for
access to personal data subject to paragraph 19.3(a) of Schedule 4;


 


(c)        established the procedures
necessary to ensure continued compliance with such legislation; and


 


24

















 


(d)        complied with the requirements
of the seventh principle of the Data Protection Act 1998 in respect of any
processing of data carried out by a data processor on behalf of the Company or
any of the Subsidiaries, including by entering into a written contract with the
data processor confirming that the data processor will only act on the
instructions of the Company or the relevant Subsidiary, and requiring the data
processor to comply with obligations relating to security measures equivalent
to those imposed on the Company or the relevant Subsidiary by the seventh
principle as mentioned above.


 


12.3        Neither the Company nor any of the
Subsidiaries has received any:


 


(a)        notice or complaint under the
Data Protection Act 1998 alleging non-compliance with the Act (including any
information or enforcement notice, or any transfer prohibition notice); or


 


(b)        claim for compensation for
loss or unauthorised disclosure of data; or


 


(c)        notification of an application
for rectification or erasure of personal data,


 


and neither the Company nor any of the Subsidiaries is
aware of any circumstances which may give rise to the giving of any such notice
or the making of any such notification.


 


13.          PROPERTY


 


13.1        The definitions in this paragraph apply in
this agreement.


 


Properties: the freehold and
leasehold land and buildings, short particulars of which are set out in Parts 1
and 2 of Schedule 5 and includes any part or parts of them and Property
means any one of them or any part or parts of any one of them.


 


13.2        The particulars of the Properties set out
in Parts 1 and 2 of Schedule 5 are true, complete and accurate.


 


13.3        The Properties are the only land and
buildings owned, used or occupied by the Company and the Subsidiaries.


 


13.4        Neither the Company, nor any company that
is or has at any time been a Subsidiary, has given any guarantee or indemnity
for any liability relating to any of the Propertiesor any other land and
buildings.


 


14.          MANAGEMENT ACCOUNTS


 


14.1        The Management Accounts have been prepared
in accordance with the Companies Acts and with accounting standards, policies,
principles and practices generally 


 


25

















 


accepted
in the UK and in accordance with the law and give a true and fair view of the
state of affairs of the Company and the Subsidiaries, and as the Company’s
Group as a whole as at the Management Accounts Date and of the profit and loss
of the Company and the Subsidiaries, and of the Company’s Group, for the
financial year ended on that date.


 


14.2        The Management Accounts:


 


(a)        make proper and adequate
provision for all bad and doubtful debts, for depreciation on fixed assets and
for liabilities (including contingent liabilities) and Taxation (including deferred
Taxation);


 


(b)        do not overstate the value of
current or fixed assets; and


 


(c)        do not understate any
liabilities (whether actual or contingent).


 


14.3        The Management Accounts are not affected by
any unusual or non-recurring items or any other factor that would make the
financial position and results shown by the Management Accounts unusual or
misleading in any material respect.


 


14.4        The Management Accounts have been prepared
on a basis consistent with the audited accounts of, as the case may be, the
Company, the Subsidiaries or the consolidated accounts of the Company and the
Subsidiaries, for the two prior accounting periods without any change in
accounting policies used.


 


14.5        The Management Accounts fairly represent
the assets and liabilities and the profits and losses of the Company and the
Subsidiaries as at and to the date for which they have been prepared.


 


15.          ACCOUNTING, FINANCIAL AND OTHER RECORDS


 


15.1        All accounting, financial and other records
of the Company and the Subsidiaries (including the statutory books of the
Company and each of the Subsidiaries):


 


(a)        have been properly prepared,
filed and maintained;


 


(b)        constitute an accurate record
of all matters required by law to appear in them;


 


(c)        do not contain any material
inaccuracies or discrepancies;


 


(d)        are in the possession of the
Company or the Subsidiary to which they relate; and


 


(e)        comply with all applicable
laws.


 


15.2        No notice has been received or allegation
made that any of those records are incorrect or should be rectified.


 


26

















 


16.          CHANGES SINCE ACCOUNTS DATE


 


Since the Accounts Date:


 


(a)        the Company and each of the
Subsidiaries has conducted its business in the normal course and as a going
concern;


 


(b)         there has been no material
adverse change in the turnover, financial position or prospects of the Company
or any of the Subsidiaries nor the loss of any supplier or customer;


 


(c)        neither the Company nor any of
the Subsidiaries has issued or agreed to issue any share or loan capital;


 


(d)        no dividend or other
distribution of profits or assets has been, or agreed to be, declared, made or
paid by the Company or any of the Subsidiaries;


 


(e)        neither the Company nor any of
the Subsidiaries has borrowed or raised any money or taken any form of
financial security and no capital expenditure has been incurred on any
individual item by the Company or any of the Subsidiaries in excess of £15,000
and neither the Company nor any of the Subsidiaries has acquired, invested or
disposed of (or agreed to acquire, invest or dispose of) any individual item by
the Company or any of the Subsidiaries in excess of £15,000; and


 


(f)        no shareholder resolutions of
the Company or any of the Subsidiaries have been passed other than as routine
business at an annual general meeting;


 


17.          FINANCIAL AND OTHER RECORDS


 


17.1        All financial and other records of the
Company and of each of the Subsidiaries:


 


(a)        have been properly prepared
and maintained;


 


(b)        constitute an accurate record
of all matters required by law to appear in them;


 


(c)        do not contain any material
inaccuracies or discrepancies; and


 


(d)        are in the possession of the
Company or the Subsidiary to which they relate.


 


17.2        No notice has been received or allegation
made that any of those records are incorrect or should be rectified.


 


17.3        All statutory records, including accounting
records, required to be kept or filed by the Company or any of the Subsidiaries
have been properly kept or filed and comply with the requirements of the
Companies Acts.


 


17.4        The Company’s balance sheet as at 30 September 2009
has been prepared in accordance with the Companies Acts and with accounting
standards, policies, principles and practices generally accepted in the UK and
in accordance with the law 


 


27

















 


and
give a true and fair view of the state of affairs of the Company and the
Subsidiaries, and as the Company’s Group as a whole as at that date  and of the profit and loss of the Company and
the Subsidiaries, and of the Company’s Group, as at that date.


 


17.5        The Company will (a) have not less
than £30,000 in cash in its bank account after paying all creditors in the
normal course of business on the Completion Date and (b) positive working
capital


 


28

















 


Schedule
5 Particulars of properties


 


Part 1.   Freehold properties


 


	
  Description of the Property

  	
   

  
	
   

  	
   

  
	
  Owner

  	
   

  
	
   

  	
   

  
	
  Registered/unregistered  (and title number)

  	
   

  
	
   

  	
   

  
	
  Occupier

  	
   

  
	
   

  	
   

  
	
  Use

  	
   

  



 


Part 2.   Leasehold properties


 


	
  Description of the Property

  	
   1,
  The Bulrushes, Boldon Business Park, Boldon Colliery, Tyne & Wear
  NE35 9PF

  
	
   

  	
   

  
	
  Owner

  	
   Moneygate
  Group Limited

  
	
   

  	
   

  
	
  Registered/unregistered (and title number)

  	
   Unregistered

  
	
   

  	
   

  
	
  Contractual date of termination of lease

  	
   
  18th January 2018

  
	
   

  	
   

  
	
  Occupier

  	
   Moneygate
  Group Limited

  
	
   

  	
   

  
	
  Use

  	
   Business
  premises

  



 


29

















 


	
  Signed by Dennis Lee Reed

  	
   

  
	
  for and on behalf of Moneygate Group Limited

  	
  /s/ Dennis Lee Reed

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  Signed by Lee Graham Hartley

  	
  /s/ Lee Graham Hartley

  
	
   

  	
   

  
	
  Signed by Dennis Lee Reed

  	
  /s/ Dennis Lee Reed

  
	
   

  	
   

  
	
  Signed by Alexander Hugh Edward Campbell

  	
  /s/ Alexander Hugh Edward Campbell

  
	
   

  	
   

  
	
  Signed by Tim Paterson-Brown

  	
   

  
	
  for and on behalf of

  	
  /s/ Tim Paterson-Brown

  
	
  MGT Capital Investments Limited

  	
  Director

  



 


30