**Exhibit 10.9**

** **

**DATED                         8 OCTOBER 2009**

 

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between

 

**MONEYGATE GROUP LIMITED**

 

**AND**

** **

**THE PERSONS LISTED IN SCHEDULE 1**

 

**AND**

** **

**MGT CAPITAL INVESTMENTS LIMITED**

** **

----

** **

**SUBSCRIPTIONAGREEMENT**

** **

forshares in

 

**MONEYGATEGROUP LIMITED**

** **

----

 

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**THIS AGREEMENT** is dated                                          2009

 

**PARTIES**

 

(1)           MONEYGATE GROUP LIMITED, a company incorporated and registered inEngland and Wales with company number 06599555 whose registered office is at 1The 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 1of Schedule 1 (the **Warrantors**).

 

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

 

**BACKGROUND**

 

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

 

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

 

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

 

**AGREED TERMS**

 

# **1.**             INTERPRETATION

# ** **

## 1.1           The definitions and rules ofinterpretation in this clause apply in this agreement.

##  

**AccountsDate****:** 30 June 2009

 

**Articles:** the existing Articles of Association of the Company

 

**BusinessDay****:** a day (other than a Saturday, Sunday or public holiday) when banksin London are open for business.

 

**Claim andSubstantiated Claim****:** have the meanings set out respectively in clause 5.

 

**CompaniesActs****:** the Companies Act 1985 and the Companies Act 2006.

 

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

 

## **Completion Date****:**  means the date of this agreement

##  

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

 

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

 

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

###  

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

###  

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

 

**Company’sSolicitors****:**Muckle LLP, Time Central , 32 Gallowgate Newcastle upon Tyne NE14BF.

 

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

 

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

 

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

 

**DisclosureLetter****:** the letter from the Warrantorsto MGT with the same date as thisagreement and described as the disclosure letter, including the bundle ofdocuments attached to it (**DisclosureBundle**).

 

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

 

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

 

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

 

**Listing****:****** the successful application andadmission of all or any of the shares in the capital of the Company, orsecurities representing such shares to the Official List of the UK ListingAuthority or on the AIM market operated by the London Stock 

 

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Exchange plc, orthe Nasdaq National Stock Market of the Nasdaq Stock Market Inc or to anyrecognised investment exchange (as defined in section 285 of the FinancialServices and Markets Act 2000 (as amended)).

 

**MGT Debenture:** the debenture between MGT and the Company (to secure the MGT LoanAgreement 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 andMGT in agreed form

 

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

 

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

 

**ManagementAccounts****:** the unaudited consolidated balance sheet and the unaudited consolidatedprofit and loss account of the Company and the Subsidiaries for the period ofsix months ended on  the Accounts Date ascontained in the Accounts Review dated 26 August 2009 by Baker Tilly Taxand Accountants Limited (a copy of which is attached to the Disclosure Letter).

 

**NewArticles:** the new Articles ofAssociation of the Company in agreed form;

 

**New Directors:** Lee Graham Hartley, Dennis Lee Reed and Alexander Hugh EdwardCampbell;

 

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

 

**Properties****:** has the meaninggiven in paragraph 13.1 of Part 1 of Schedule 4.

 

**Service Agreements:**the service agreements between the Company and the New Directors inagreed form

 

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

 

**SubscriptionPrice****:**  £96.08

 

**SubscriptionShares:**  the 9,607,843new Ordinary shares of £0.00001 each to be subscribed by MGT pursuant to clause2

 

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

 

Unless the context otherwise requires, theapplication of the definition of Subsidiary to any company at any time willapply to the company as it is at that time.

 

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

 

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

 

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## 1.2           **Warranties****:** the representations andwarranties in clause 4 and Schedule 4.Clause and schedule headings do notaffect the interpretation of this agreement.

##  

## 1.3           A **person** includesa corporate or unincorporated body.

##  

## 1.4           Words in the singular include the pluraland in the plural include the singular.

##  

## 1.5           A reference to one gender includes areference 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 inforce at the date of this agreement, taking account of any amendment orre-enactment and includes any statute, statutory provision or subordinate legislationwhich it amends or re-enacts and subordinate legislation for the time being inforce 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 andinitialled by them or on their behalf for identification.

##  

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

##  

## 1.10         References to this agreement include thisagreement 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 SECUREDFACILITIES

# ** **

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

##  

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

 

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## 2.3           The Company warrants to MGT that, on theCompletion Date, the Company shall be entitled to allot the Subscription Sharesto 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 performits obligations under this agreement;

###  

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

###  

### (c)        execution and delivery of, and performance by the Company of itsobligations under this agreement will not result in any breach of applicablelaw.

###  

## 2.5            Each of the ContinuingShareholders irrevocably waives any pre-emption rights that he or his nomineesmay have under the Articles or otherwise, so as to enable the issue of the SubscriptionShares to proceed.

##  

# **3.**             COMPLETION

# ** **

## **3.1****          ****Completion shall take place simultaneously with theexecution of this agreement** at a place and time agreed in writing bythe parties or electronically.

##  

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

##  

## 3.3           The following events shall occur on theCompletion Date:

##  

### (a)        MGT shall pay the Company the Subscription Price by electronictransfer 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 gooddischarge 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 theSubscription Price, issue and allot the Subscription Shares credited as fullypaid to MGT and enter its name in the register of members in respect of them;

####  

#### (iii)       execute and deliver to MGT ashare certificate for the Subscription Shares;

 

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####  

#### (iv)       accept the resignations of eachof the Continuing Shareholders  asemployees of the Company;

####  

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

####  

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

####  

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

####  

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

###  

### (e)        the Company Secretary shall be instructed to file all appropriateresolutions and forms with the Registrar of Companies within the time limitsprescribed for filing each of them.

###  

# **4.**             WARRANTIES

# ** **

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

##  

## 4.2           The Warrantors jointly and severallywarrant and represent to MGT that each Warranty is true, accurate and notmisleading on the date of this agreement except as Disclosed.

##  

## 4.3           Warranties qualified by the expression **so far as the Warrantors  areaware** (or any similarexpression) are deemed to be given to the best of the knowledge, informationand belief of the Warrantors after they have made all reasonable and carefulenquiries. Each of the Warranties is separate and, unless otherwisespecifically provided, is not limited by reference to any other Warranty or anyother provision in this agreement.

##  

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

##  

## 4.5           The Company and the Warrantors undertake toinform MGT in writing immediately on becoming aware of any breach of theWarranties, supplying brief particulars.

 

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# **5.**             LIMITATIONS ON CLAIMS

# ** **

## 5.1           The definitions and rules ofinterpretation in this clause apply in this Agreement.

##  

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

 

**SubstantiatedClaim****:** a Claim in respect of which liability is admitted by the partyagainst whom such Claim is brought, or which has been adjudicated on by a Courtof competent jurisdiction and no right of appeal lies in respect of suchadjudication, or the parties are debarred by passage of time or otherwise frommaking an appeal.

 

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

 

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

##  

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

##  

## 5.4           The Warrantors shall not be liable for aClaim unless:

##  

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

###  

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

###  

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

##  

### (a)        relates to matters Disclosed; or

###  

### (b)        relates to any matter specifically and fully provided for in theManagement Accounts.

###  

## 5.6           The Warrantors are not liable for a Claimunless 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 makingthe 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 Claimthat arises or is delayed as a result of dishonesty, fraud, wilful misconductor wilful concealment by either party, their respective agents or advisers.

 

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# **6.**             MGT’S CONSENT TO FUTURE TRANSACTIONS

# ** **

## 6.1           The Companyundertakes to MGT that it shall not, for so long as MGT is the holder of anyShares, take any of the following actions without the prior written consent ofMGT, such consent not to be unreasonably withheld or delayed, and each of theWarrantors undertake (as a separate covenant by each ofthem) that without the prior written consent of MGTsuch consent not to be unreasonably withheld or delayed,they shall use reasonable endeavours to procure that the Company shall not takeany of the following actions:

##  

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

####  

#### (ii)        consolidate, merge or amalgamate with any otherperson or enter into any joint venture, partnership, consortium or jointpurchase arrangement; or

####  

#### (iii)      sell, transfer or otherwisedispose 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 NewArticles or otherwise and subject to (1) the terms of clause 8 below and (2) MGTowning 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 tocreate any Encumbrance over, transfer or otherwise dispose of the whole or anypart of their respective interests in or grant any option over any Shares toany person except with the prior written consent of MGT, such consent not to beunreasonably withheld or delayed;

###  

# **8.**             RIGHT OF FIRST REFUSAL

# ** **

## 8.1           Each of the Warrantors shall have the rightof first refusal to purchase their shares from each other in such proportionsas they may agree between them.  MGT willhave 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 timeto give warranties or indemnities (except a warranty as to title to the sharesheld by MGT).

##  

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

 

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# **9.**                                       PERSONAL GUARANTEESLIABILITIES

# ** **

## 9.1                                 Subjectto clause 9.2, the Warrantors undertake to the Company and to MGT (jointly andseverally) to repay any sums still to be paid by the Company  after the date of this Agreement in respectof personal guarantees given to Royal Bank of Scotland by the ContinuingShareholders (or any of them) and/or Graham Robert Jackson against an overdraftfacility granted to Moneygate Limited. (“PG Liabilities”)

##  

## 9.2                                 Anyrepayments in respect of the PG Liabilities shall be made as follows:

##  

### (a)                        They shall be borne equally by theContinuing Shareholders

###  

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

###  

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

###  

# **10.**                               CONFIDENTIALITY ANDANNOUNCEMENTS

# ** **

## 10.1                           Except so far as may berequired by law, and in such circumstances only after prior consultation witheach other,  neither party shall ,at anytime, disclose to any person or use to the detriment of the other thisagreement or any trade secret or other confidential information which they holdin relation to the  other or its affairs.

##  

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

##  

# **11.**                               FURTHER ASSURANCE

# ** **

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

 

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# **12.**                               REPORTING REQUIREMENTS

# ** **

## 12.1                           The ContinuingShareholders shall procure that the Company keeps true, accurate and up-to-datebooks and records of all the affairs of the Company,

.

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

##  

### (a)                        unaudited managementaccounts of the Company for that month,

###  

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

###  

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

###  

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

###  

## 12.3                           TheDirectors and the Company shall provide annual audited reports and accounts forthe Company within 3 months after each financial year end.

##  

## 12.4                           Notlater 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 budgetand business plan for the Company for that financial year..

##  

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

##  

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

 

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

 

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

 

## 12.6                           If the Company fails tokeep accounts or supply information as required by this agreement, MGT mayappoint any accountants, auditors and other professionals it think**s** fit in order to prepare the requiredinformation, accounts or documents, and the Company must pay the cost of doingso on demand.

 

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# **13.**                               WHOLE AGREEMENT

# ** **

## 13.1                           This agreement, and anydocuments referred to in it, constitute the whole agreement between the partiesand supersede any arrangements, understanding or previous agreement betweenthem relating to the subject matter they cover.

##  

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

##  

# **14.**                               VARIATION AND WAIVER

# ** **

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

##  

## 14.2                           Any waiver of any rightunder this agreement is only effective if it is in writing and it applies onlyto the party to whom the waiver is addressed and to the circumstances for whichit is given and shall not prevent the party who has given the waiver fromsubsequently relying on the provision it has waived.

##  

## 14.3                           No failure to exercise ordelay in exercising any right or remedy provided under this agreement or by lawconstitutes a waiver of such right or remedy or shall prevent any futureexercise in whole or in part thereof.

##  

## 14.4                           No single or partialexercise of any right or remedy under this agreement shall preclude or restrictthe further exercise of any such right or remedy.

##  

## 14.5                           Unless specificallyprovided otherwise, rights arising under this agreement are cumulative and donot exclude rights provided by law.

##  

# **15.**                               COSTS

# ** **

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

 

# **16.**                               NOTICE

# ** **

## 16.1                           A notice given under thisagreement:

##  

### (a)                        shall be in writing and sent for the attention of the person, and tothe address or fax number, specified in clause 16.3 (or such other address, faxnumber or person as each party may notify to the others in accordance with theprovisions 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 toor by the Company or the Warrantors or MGT under this agreement is deemed tohave been properly given if it is given to or by the Company’s, Warrantors’ orMGT’s representative named in clause 16.3 Any notice required to be given to orby some only of the Warrantors  shall begiven to or by the  Warrantor concerned(and in the case of a notice to the Warrantors) at their address or fax numberas set out in Part 1 Schedule 1

##  

## 16.3                           The addresses for serviceof 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 tohave 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, 2Business days from the date of posting; or

###  

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

 

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## 16.5                           To prove service, it issufficient to prove that the notice was transmitted by fax to the fax number ofthe party or, in the case of post, that the envelope containing the notice wasproperly addressed and posted.

##  

# **17.**                               INDEMNITY

# ** **

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

##  

# **18.**                               SEVERANCE

# ** **

## 18.1                           If any provision of thisagreement (or part of a provision) is found by any court or administrative bodyof competent jurisdiction to be invalid, unenforceable or illegal, the otherprovisions shall remain in force.

##  

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

##  

# **19.**                               AGREEMENT SURVIVES COMPLETION

# ** **

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

 

# **20.**                               THIRD PARTY RIGHTS

# ** **

## 20.1                           Subject to clause 21 and23, this agreement and the documents referred to in it are made for the benefitof the parties and their successors and permitted assigns and are not intendedto benefit, or be enforceable by, anyone else.

##  

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

##  

# **21.**                               SUCCESSORS

# ** **

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

 

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# **22.**                          COUNTERPARTS

# ** **

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

 

# **23.**                          ASSIGNMENT AND MGT SHARETRANFERS

# ** **

## 23.1                           Except as provided otherwisein this agreement, no party may assign, or grant any Encumbrance or securityinterest over, any of its rights under this agreement.

##  

## 23.2                           Each party that hasrights under this agreement is acting on its own behalf.

##  

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

##  

## 23.4                           Notwithstanding any otherprovision of this agreement, if MGT:

##  

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

###  

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

###  

# **24.**                               GOVERNING LAW ANDJURISDICTION

# ** **

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

##  

## 24.2                           The parties irrevocablyagree that the courts of England have exclusive jurisdiction to settle anydispute or claim that arises out of or in connection with this agreement or itssubject matter or formation (including non-contractual disputes and claims).

##  

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

 

14

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** **

**Schedule1 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

----

 

**Schedule2 Particulars of the Company and the Subsidiaries**

** **

**Part 1The 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 2The 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

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| **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

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| **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

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** **

**Schedule3 Completion**

 

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

 

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

 

(a)        the documents set out atclause 3 above including the share certificates for the Subscription Shares inthe name of the Company

 

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

 

(c)        copy of leasehold agreementrelating to the Properties;

 

**Part 2.**   Matters for the board meetings atCompletion

 

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

 

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

 

(b)        the appointment of the NewDirectors:

 

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

 

(d)        the appointment of MGT asCompany Secretary:

 

(e)        The adoption of the NewArticles

 

19

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**Schedule4 the Warranties**

 

**Part 1.**   General warranties

 

**1.**             POWER TO ENTER INTO THIS AGREEMENT

** **

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

 

1.2          Compliance with the terms of this agreementand the documents referred to in it shall not breach or constitute a default underany of the following:

 

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

 

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

 

**2.**             SHARES IN THE COMPANY AND SUBSIDIARIES

** **

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

 

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

 

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

 

2.4          The issued shares of the Subsidiaries arefully paid up.

 

2.5          The Original Shares of the Subsidiaries arefree from all Encumbrances and no commitment has been given to create anEncumbrance affecting the Original Shares of the Subsidiaries.

 

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

 

20

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**3.**             INFORMATION

 

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

 

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

 

**4.**             COMPLIANCE WITH LAWS

** **

The Company and each of the Subsidiaries has at alltimes conducted its business in accordance with its memorandum and articles ofassociation and in all material respects with all applicable laws andregulations.

 

**5.**             LICENCES AND CONSENTS

** **

5.1          The Company and each of the Subsidiarieshas all necessary licences, consents, permits and authorities necessary tocarry on its business in the places and in the manner in which its business isnow carried on, all of which are valid and subsisting.

 

5.2          There is no reason why any of thoselicences, 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 onbehalf of the Company and the Subsidiaries provide full indemnity cover againstall losses and liabilities including business interruption and other risks thatare normally insured against by a person carrying on the same type of businessas the Company and the Subsidiaries.

 

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

 

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

 

**7.**             DISPUTES AND INVESTIGATIONS

** **

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

 

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

 

21

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

 

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

 

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

 

**8.**             CONTRACTS

** **

8.1          The definition in this paragraph applies inthis agreement.

 

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

 

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

 

(a)        is a Material Contract; or

 

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

 

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

 

(d)        involves agency ordistributorship; or

 

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

 

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

 

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

 

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

 

8.4          No notice of termination of a MaterialContract has been received or served by the Company or any of the Subsidiariesand there are no grounds for determination, rescission, avoidance, repudiationor a material change in the terms of any such contract.

 

22

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**9.**             TRANSACTIONS WITH DIRECTORS

** **

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

 

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

 

(b)        any director of a member ofthe 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 byor entered into by the Company or any of the Subsidiaries or any third party inrespect of borrowings or other obligations of the Company or the Subsidiariesor any other person.

 

10.2        Neither the Company nor any of theSubsidiaries has any outstanding loan capital, or has lent any money that hasnot been repaid, and there are no debts owing to the Company or theSubsidiaries other than debts that have arisen in the normal course ofbusiness.

 

10.3        Neither the Company nor any of theSubsidiaries has:

 

(a)        factored any of its debts ordiscounted any of its debts or engaged in financing of a type which would notneed to be shown or reflected in the Management Accounts; or

 

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

 

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

 

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

 

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

 

23

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beenreached or otherwise. Neither the Company nor any of the Subsidiaries hasreceived any notice whose terms have not been fully complied with and/orcarried out from any creditor requiring any payment to be made and/orintimating the enforcement of any security which it may hold over the assets ofthe Company or the Subsidiaries.

 

**11.**          ASSETS

** **

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

 

11.2        None of the assets shown in the ManagementAccounts or acquired by the Company or any of the Subsidiaries since theAccounts Date or used by the Company or any of the Subsidiaries is the subjectof any lease, lease hire agreement, hire purchase agreement or agreement forpayment on deferred terms or is the subject of any licence or factoringarrangement.

 

**12.**          DATA PROTECTION

** **

12.1        The Company and the Subsidiaries havenotified registrable particulars under the Data Protection Act 1998 of allpersonal data held by them and:

 

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

 

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

 

(c)        the contents of suchnotifications (copies of which are attached to the Disclosure Letter) arecomplete and accurate; and

 

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

 

12.2        The Company and the Subsidiaries have:

 

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

 

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

 

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

 

24

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

 

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

 

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

 

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

 

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

 

and neither the Company nor any of the Subsidiaries isaware of any circumstances which may give rise to the giving of any such noticeor the making of any such notification.

 

**13.**          PROPERTY

** **

13.1        The definitions in this paragraph apply inthis agreement.

 

**Properties****:** the freehold andleasehold land and buildings, short particulars of which are set out in Parts 1and 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 outin Parts 1 and 2 of Schedule 5 are true, complete and accurate.

 

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

 

13.4        Neither the Company, nor any company thatis or has at any time been a Subsidiary, has given any guarantee or indemnityfor any liability relating to any of the Propertiesor any other land andbuildings.

 

**14.**          MANAGEMENT ACCOUNTS

** **

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

 

25

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acceptedin the UK and in accordance with the law and give a true and fair view of thestate of affairs of the Company and the Subsidiaries, and as the Company’sGroup as a whole as at the Management Accounts Date and of the profit and lossof the Company and the Subsidiaries, and of the Company’s Group, for thefinancial year ended on that date.

 

14.2        The Management Accounts:

 

(a)        make proper and adequateprovision for all bad and doubtful debts, for depreciation on fixed assets andfor liabilities (including contingent liabilities) and Taxation (including deferredTaxation);

 

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

 

(c)        do not understate anyliabilities (whether actual or contingent).

 

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

 

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

 

14.5        The Management Accounts fairly representthe assets and liabilities and the profits and losses of the Company and theSubsidiaries 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 recordsof the Company and the Subsidiaries (including the statutory books of theCompany and each of the Subsidiaries):

 

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

 

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

 

(c)        do not contain any materialinaccuracies or discrepancies;

 

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

 

(e)        comply with all applicablelaws.

 

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

 

26

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**16.**          CHANGES SINCE ACCOUNTS DATE

** **

Since the Accounts Date:

# ** **

(a)        the Company and each of theSubsidiaries has conducted its business in the normal course and as a goingconcern;

 

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

 

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

 

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

 

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

 

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

 

**17.**          FINANCIAL AND OTHER RECORDS

** **

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

 

(a)        have been properly preparedand maintained;

 

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

 

(c)        do not contain any materialinaccuracies or discrepancies; and

 

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

 

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

 

17.3        All statutory records, including accountingrecords, required to be kept or filed by the Company or any of the Subsidiarieshave been properly kept or filed and comply with the requirements of theCompanies Acts.

 

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

 

27

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

 

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

 

28

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**Schedule5 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

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| 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

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