Document:

Exhibit 10.25

 

CONFIDENTIAL TREATMENT REQUESTED:
INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
MARKED WITH “**”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED
TO THE SECURITIES AND EXCHANGE COMMISSION.

 

AMENDMENT TO

CONTRACT FOR SERVICES

AGREEMENT

 

This Amendment to the CONTRACT FOR SERVICES Agreement (the “Amendment”)
is made and entered into this 1st day of August, 2008, by and between NeuLion, Inc.,
a Delaware corporation, (herein referred to as “NeuLion”) having its principal
place of business at 1600 Old Country Road, Plainview, New York, 11803 and NHL
Interactive CyberEnterprises, LLC, a Delaware limited liability company (“NHL”),
having its principal place of business at 1251 Avenue of the Americas, New
York, NY 10020.

 

WHEREAS, NHL and NeuLion entered into an
Contract for Services dated as of June 25, 2007, relating to building and
delivering an online multimedia streaming service and other rights and
obligations related thereto (the “Agreement”);

 

WHEREAS, NHL and NeuLion desire and agree to
amend the Agreement in the manner set forth in this Amendment; and —

 

WHEREAS, capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement.

 

NOW, THEREFORE, in consideration of mutual
covenants and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.            Amendment

 

A) WHEREAS, NeuLion desires to operate and
delivery Customer Support Services (as defined below) in support of the NHL
Streaming Services.  The “NHL Streaming
Services” shall consist of (i) NHL Game Center Live (i.e. the online
service previously named “NHL Center Ice Online” as described in Exhibit A
of the Agreement, as further developed and modified by NeuLion and NHL ICE from
time to time), (ii) any live NHL game streaming in the applicable Clubs’
local markets (e.g. Leafs TV), and (iii) with respect to email support
only, the NHL Team Video Players.  The
Customer Support Services shall be deemed to be part of the Service for
purposes of the Agreement.

 

B) Term.  The parties hereby
agree to provide these additional services effective August 1, 2008 and
expiring on September 30, 2010.

 

 

C) Amendment to Exhibit A - NEULION PROVIDED SERVICES

 

1.                     The services
provided by NeuLion under this Amendment shall be referred to herein as the “Customer
Support Services”.  The Customer Support
Services shall consist of customer services support and contact management
services for NHL customers who wish to use the NHL Streaming Services, and
shall include the following:

 

	
  a)

  	
  The management and handling of customer contacts via phone, email or
  chat for customer support regarding NHL Streaming Services.

  
	
   

  	
   

  
	
  b)

  	
  Providing and managing the necessary personal computers and
  installation of all communication lines required to meet customer contact
  volumes and Service Levels.

  
	
   

  	
   

  
	
  c)

  	
  Providing suitable workstations and environment required for customer
  service representatives to meet the Service Levels for NHL customers.

  
	
   

  	
   

  
	
  d)

  	
  Providing the customer support representatives, matching the required
  profile and the support environment necessary to respond to forecasted
  contact volumes within the Service Levels.

  
	
   

  	
   

  
	
  e)

  	
  Providing multi-channel contact handling in accordance with practices
  and procedures which have been mutually agreed to by the parties in writing.
  NeuLion shall follow all approved procedures provided by NHL. All marketing
  tools and scripts must be pre-approved in advance by NHL.

  
	
   

  	
   

  
	
  f)

  	
  Providing a qualified Project Manager that meets the reasonable pre
  approval of NHL.

  
	
   

  	
   

  
	
  g)

  	
  Building and managing additional scripts based on content provided by
  the NHL.

  
	
   

  	
   

  
	
  h)

  	
  Providing telephony equipment and call recording management.

  
	
   

  	
   

  
	
  i)

  	
  Production and quality management.

  
	
   

  	
   

  
	
  j)

  	
  Managing all customer interactions.

  
	
   

  	
   

  
	
  k)

  	
  Tracking through the NHL provided Customer Support System and the
  NeuLion Automated Call Distribution System (ACD) calls, assigning tickets to
  all calls and recording resolutions.

  
	
   

  	
   

  
	
  1)

  	
  Call center operations and individual NeuLion Personnel performance
  reporting.

  
	
   

  	
   

  
	
  m)

  	
  Receiving and managing the calls received by NeuLion from NHL
  customers, including:

  
	
   

  	
   

  
	
   

  	
  i.

  	
  Call priority management

  

 

 

	
   

  	
  ii.

  	
  Escalation of problems and issues

  
	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
  Error processing

  
	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
  Data collection statistics

  
	
   

  	
   

  	
   

  
	
   

  	
  v.

  	
  Customer interface development

  

 

vi.            Using the hold
music and messaging loop provided by NHL.

 

2.                                       NeuLion shall
provide the Customer Support Services in accordance with the following Hours of
Operation.  Basic hours of operation will
be *****, Monday through Sunday, except as follows:

 

a)                                      At least one
NeuLion personnel shall be available to perform the Customer Support Services
from *** prior to the start of any NHL game until the conclusion of that game.

 

b)                                     On days where more
than two (2) NHL games are being played in the afternoon (i.e. between
noon and 6pm EST), the NeuLion personnel shall be available to perform the
Customer Support Services from *** prior to the start of such games until the
conclusion of such games.

 

c)                                      On days where
more games are played during the afternoon than the evening, the basic hours
window shall begin *** prior to the start of the first game and shall end ***.

 

d)                                     NeuLion shall work
with NHL to adjust the start time of the foregoing *** basic window from time
to time, to reflect the timing of actual contact volume.  For example, if the parties determine that
contact volume is more likely to occur from *****, the basic hours of operation
shall be adjusted accordingly.

 

e)                                      *****************.
People will be directed to email customer support

 

f)                                        Extended hours
negotiated as required.

 

3.                                       Monthly
Forecasts

 

a.                       NHL will provide NeuLion a game
schedule 30 days prior to each month.

 

b.                      Subject to mutual agreement
between NeuLion and the NHL, NeuLion will provide a call and inbound minute
forecast 7 days prior to the start of each month.

 

i.   NHL
will have up to 3 days to review, request changes or approve the forecast.

 

 

c.                       The forecasts shall be for
informational purposes only and any discrepancy between forecasts and actual
contact volume shall not affect either party’s rights or obligations hereunder.

 

4.       Reporting

 

a.                       NeuLion and the NHL will work
jointly to provide a written report by no later than 10am Eastern Time on each
business day (Monday through Friday) throughout the Term of this Amendment, and
will also provide cumulative monthly reports.

 

b.                      The reports will be provided
through a task manager portal (“dashboard”) to be provided by NeuLion based on
mutually agreed requirements. The dashboard shall be accessible by NHL via the
Internet on a 24/7 basis, and all reports shall be exportable in
industry-standard formats (and as otherwise mutually agreed). NeuLion shall
maintain backups of all daily and monthly reports and shall provide copies of
such reports to NHL (in a mutually agreed format) upon request. Detailed
program reporting requirements are included in section C below.

 

c.                       Each Daily Report will include
the following data from the prior business day’s activity—for the case of
Monday, for the prior weekend’s activity. NHL will approve all reporting
formats.

 

	
  ·

  	
   

  	
  Calls Offered

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Calls Answered

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Abandon Rate

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Service Level

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Average Speed to Answer

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Total Sales

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Saves conversion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Sales conversion

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Average handle time

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Call Outcomes

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Emails Offered

  
	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Emails Answered

  

 

d.                      The Customer Support Services
shall be configured so as to give designated NI-IL representatives the ability
to review NeuLion personnel calls with NHL customers. In addition, NeuLion
acknowledges that NHL customers may end up 

 

 

	
   

  	
  contacting NHL with issues about the Product, instead of contacting
  NeuLion, and NeuLion shall ensure that NHL has access on a 24/7 basis to
  whatever records and information NeuLion has collected about such customers
  so as to enable NHL to handle such contacts appropriately.

  
	
   

  	
   

  
	
  5.

  	
  NeuLion will provide a front end interactive voice response (IVR) for
  all calls.

  
	
   

  	
   

  
	
  6.

  	
  NeuLion will conduct Quality Assurance / Transaction Monitoring via
  online forms. Calls will be scored using a combination of live and recorded
  monitoring.

  
	
   

  	
   

  
	
  7.

  	
  The NHL will provide access to its NHL Video Player CRM information
  systems.

  
	
   

  	
   

  
	
  8.

  	
  NeuLion will provide an Email Management Solution.

  
	
   

  	
   

  
	
  9.

  	
  Training — NeuLion will provide, with reasonable assistance from the
  NHL, all product and technical training documentation. NeuLion to provide an
  outline of Training Overview including the following:

  

 

	
  a.

  	
   

  	
  Curriculum Development

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Instructional Design

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  Classroom instruction

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Curriculum changes and coaching to improve knowledge base, keeping
  agents in the know on technical and other product developments or
  enhancements, directly related to the optimization of the customer service
  experience.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  Sales techniques to close customers unsure about purchasing the
  product

  
	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  Save techniques to stop a customer from canceling the service

  
	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  Classroom Training

  
	
   

  	
   

  	
   

  
	
  h.

  	
   

  	
  Nesting/mentoring — Conduct either as part of or a follow-up or
  reinforcement of classroom training. Agent takes calls with a mentor or head
  trainer.

  
	
   

  	
   

  	
   

  
	
  i.

  	
   

  	
  Trainee to Trainer Ratios

  
	
   

  	
   

  	
   

  
	
  j.

  	
   

  	
  Training Evaluation process

  
	
   

  	
   

  	
   

  
	
  k.

  	
   

  	
  On-going Training Life-Cycle

  
	
   

  	
   

  	
   

  

 

	
  10.

  	
  Retention Program

  

 

	
  a.

  	
   

  	
  NeuLion will attempt to “save” customers who contact NeuLion via
  telephone and/or email and indicate their intention of canceling any NHL
  product and/or service.

  

 

 

	
  b.

  	
   

  	
  NeuLion will provide a daily (Mon — Fri) written report to NHL that
  specifies all customers who ask to cancel along with the cancellation
  reasons, if any, that may have been provided by the customer(s)

  

 

	
  11.

  	
  Staffing Requirements

  

 

	
  a.

  	
   

  	
  Dedicated Project Manager to optimize agent performance and
  communicate or provide feedback on customer feedback for NHL reference to
  insure a high level of customer satisfaction with the quality of the product.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  Trainer

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  French speaking agents

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Equivalent of *** full time Customer Service Representatives

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  Over Flow Plan for intense volume time periods

  

 

	
  12.

  	
  Other NeuLion deliverables

  

 

	
  a.

  	
   

  	
  Overall Grade of Service Score — NeuLion will use industry customer
  support metrics in order to grade its specific service in comparison to those
  industry averages.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  NeuLion will design the form and work with the NHL to include
  elements to identify and measure the key drivers of End-User Satisfaction as
  well as any Business Impacting Critical Attributes

  

 

C) Amendment to Exhibit B - NEULION SERVICE FEES

 

In consideration for the Customer Support Services provided to the NHL
(including all training, reporting and other obligations described in this
Amendment), NeuLion shall received the following fees from the NHL:

 

	
  1.

  	
  Cost Metrics

  

 

a.                       ****

 

b.                      ****

 

c.                       ****

 

	
  2.

  	
  *** Usage Payment — The NHL will pay NeuLion a usage fee for services
  provided based upon *** *****

  ****** ******************.

  
	
   

  	
   

  
	
  3.

  	
  IVR Set up and modification rate = ***.

  

 

 

	
  4.

  	
  Agent Training rate = *************.

  
	
   

  	
   

  
	
  5.

  	
  Set-up Fee = ***

  
	
   

  	
   

  
	
  6.

  	
  Account Management *****.

  

 

D) Amendment to Exhibit C — Service Levels

 

In its performance of the Services hereunder, NeuLion shall meet and
exceed the following Service Levels:

 

	
  1.

  	
  Call — **** 

  

 

	
   

  	
  i.

  	
  Call — ****.

  
	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  Call — ****.

  
	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
  Call — ****.

  
	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
  Call — ****.

  

 

	
  2.

  	
  Email — *** ***

  

 

	
  3.

  	
  Service Level *** — If service levels are not met the NHL
  *************.

  

 

	
   

  	
  a.

  	
  Calls

  

 

	
   

  	
  i.

  	
  ***

  

 

	
   

  	
  1.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  ***

  

 

	
   

  	
  ii.

  	
  ***

  

 

	
   

  	
  1.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  ***

  

 

 

	
   

  	
  iii.

  	
  ***

  

 

	
   

  	
  1.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  ***

  

 

	
   

  	
  iv.

  	
  ***

  

 

	
   

  	
  1.

  	
  ***

  

 

b. Email

 

	
   

  	
  i.

  	
  ***

  

 

	
   

  	
  1.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  ***

  
	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  ***

  

 

In addition, if (A) NeuLion fails to meet the Service Levels
described in either Section D(1) or D(2) in either
**********************************.

 

E) Additional Terms

 

1.                       General.  Except as expressly provided herein, the
Agreement shall continue in full force and effect as modified hereby.

 

2.                       Transition Assistance.  Upon expiration or termination of this
Amendment for any reason, NeuLion shall, at NHL’s direction, prepare the NHL
data and all records of work performed in an XML format or other formats
mutually agreed upon by both parties (“Transition Data”) and deliver to NHL
copies of all Transition Data. The Transition Data shall include, without
limitation, complete records of all interactions between NeuLion and the NHL’s
customers, all Client Data, and any related information contained in NeuLion’s
customer support databases. In addition:

 

a)  Upon the expiration or
termination of this Amendment, NeuLion shall, (a) continue to provide the
Customer Support Services to the extent requested by NHL for a period of at
least *** (the “Transition Assistance Period”), at the

 

rates set forth herein, and (b) provide such assistance as
reasonably required by NHL including assistance to 3rd parties designated by
NHL to transfer the Transition Data to another vendor or to NHL (the “Transition
Assistance Services”)

 

b)  After the Transition
Assistance Period, NeuLion shall be reasonably compensated for any additional
Transition Assistance Services provided at NHL’s request.

 

 

3.                       Client Data “Client Data”
shall mean any information furnished to or collected by NeuLion in connection
with the activities contemplated in this Agreement and from which an individual
may be identified, such as an individual’s name, address, credit card
information, e-mail address, IP address and telephone number. The parties
acknowledge that privacy laws govern disclosures of nonpublic personal
information about consumers. NeuLion shall protect and keep strictly
confidential all Client Data. At any time, upon NHL’s request, NeuLion shall
return to NHL all Client Data in its possession. NHL shall be under no
obligation to take any action that, within NHL’s sole judgment and discretion,
would constitute a violation of applicable privacy laws or its privacy
policies. Notwithstanding any other provision of this Agreement, NeuLion
represents, warrants and covenants that, with respect to any Client Data,
NeuLion shall: (i) comply with all applicable laws, regulations and best
practices regarding data security and privacy in performing the Services and
its other obligations hereunder; (ii) inform itself regarding, and comply
with, NHL’s privacy policies and all applicable privacy laws; (iii) keep
all Client Data strictly confidential, and not disclose or use any Client Data
except to the extent necessary to perform the Services and in accordance with
NHL’s privacy policies and all applicable privacy laws; (iv) not disclose
any Client Data to any other entity (including NeuLion’s third party service
providers) without the prior written consent of NHL and an agreement in writing
from such other entity to use or disclose such Client Data only to the extent
necessary to carry out NeuLion’s obligations under this Agreement and for no
other purposes; (v) maintain reasonable administrative, technical, and
physical safeguards to ensure the security and confidentiality of Client Data,
protect against any anticipated threats or hazards to the security or integrity
of Client Data, and protect against unauthorized access to or use of Client
Data that could result in substantial harm or inconvenience to an individual; (vi) notify
NHL immediately in writing when NeuLion becomes aware of any material breach of
its security safeguards or has reason to believe that Client Data may have been
subject to unauthorized disclosure, access, or use, which notification shall
include the following information: (A) the nature of the unauthorized
disclosure or use; (B) the Client Data disclosed or used; (C) the
identity of the person(s) or entity(ies) who received the unauthorized
disclosure or made the unauthorized use; (D) what corrective action
NeuLion took or will take to prevent further unauthorized disclosures or uses; (E) what
NeuLion did or will do to mitigate any deleterious effect of such unauthorized
disclosure or use; and (F) such other information as NHL may reasonably
request; and (vii) take all reasonable and appropriate steps, at NeuLion’s
expense, including the provision of notice to affected individuals, to protect
Client Data in the event of a failure of NeuLion’s security safeguards or
unauthorized access to Client Data from or through NeuLion.

 

 

	
  IN WITNESS WHEREOF, the parties hereto have executed this Amendment.

  
	
   

  
	
   

  
	
  NeuLion Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ J. Chris Wagner

  	
   

  
	
   

  
	
   

  
	
  Title:

  	
  Executive Vice President

  	
   

  
	
   

  
	
   

  
	
  Date:

  	
  8/8/08

  	
   

  
	
   

  
	
   

  
	
  NHL Interactive CyberEnterprises, LLC

  
	
   

  
	
   

  
	
  By:

  	
  Illegible

  	
   

  
	
  (Signature of officer duly authorized to sign)

  
	
   

  
	
   

  
	
  Title:

  	
  EVP CTO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  8/13/08Exhibit 10.26

 

DATE:        August 2007

 

PARTIES:

 

(1)           THE SEVERAL
PERSONS whose respective names and addresses are set out in column 1 of part 2
of schedule 1 (together the “Sellers”);
and

 

(2)           JUMPTV INC., a company
incorporated under the laws of Canada with registered number 369888-2 and
having its registered office at 463 King Street West, Suite 300, Toronto,
Ontario, M5V 1K4 Canada (“Jump” or
“Purchaser”).

 

RECITALS:

 

(A)          The Sellers have agreed to
sell and Jump has agreed to purchase the Shares on the terms set out in this
agreement.

 

(B)           Jump is a company that is
publicly traded on AIM and the Toronto Stock Exchange.

 

IT IS
AGREED as follows:

 

1.             INTERPRETATION

 

1.1           Defined terms

 

In this agreement, the
following words and expressions shall have the following meanings:

 

“Accounting
Date” means in relation to any Financial Year of the Company, the last day
of that Financial Year;

 

“Accounts” means in
relation to any Financial Year of the Company:

 

(1)           the statutory balance sheets of the Company as at the
Accounting Date in respect of that Financial Year; and

 

(2)           the statutory profit and loss accounts of the
Company in respect of that Financial Year;

 

“AIM” the market
operated under such name by the London Stock Exchange plc;

 

1

 

“Business
Day” means a day (excluding Saturday) on which banks generally are open in
both Ontario, Canada and the City of London for the transaction of normal
banking business;

 

“Brydon” means Simon
Brydon of 81 Devonport Road, Shepherds Bush, London, W12 8PB;

 

“CA85” means the
Companies Act 1985;

 

“CHAPS” means the
clearing houses automated payment system or any other method of electronic
transfer for same-day value;

 

“Cash
Deposit” means the US$250,000 deposited with Seller’s Solicitors
prior to the date of this agreement;

 

“Claim” means any
claim made by Jump against any or all of the Sellers under this agreement
including in particular (but without prejudice to the generality of the
foregoing) any claim for breach of the Warranties;

 

“Companies
Acts” means CA85, Part V of the Criminal Justice Act 1993, the
Companies Consolidation (Consequential Provisions) Act 1985, the Companies Act
1989 and the Companies Act 2006 (to the extent enacted at the relevant time);

 

“Company” means Cycling
Television Limited, a private company limited by shares and incorporated in
England and Wales, short particulars of which are set out in part 1 of schedule
1;

 

“Completion” means completion of the sale and purchase of the
Shares in accordance with clause 5;

 

“Completion
Accounts” the profit and loss account and balance sheet of
the Company as at close of business on the Effective Date which may be prepared
by Jump’s accountants in accordance with Clause 4;

 

“Completion Date” means the date upon which Completion takes
place;

 

“Confidential
Information” means know-how, trade secrets and other information
of a confidential nature wherever in the world enforceable (including, without
limitation, all proprietary technical and commercial information and techniques
in whatever form held, such as paper, electronically stored data, magnetic
media film and microfilm or orally);

 

“Consideration” means the sum
of the Initial Consideration and the Deferred Share Consideration;

 

2

 

“Continuing
Director” means Brydon, being one of the Directors;

 

“Continuing
Director’s Service Agreement” means the service agreement
in the agreed form between the Company and Brydon;

 

“CCF” means Creative
Capital Fund, limited partnership registered under the laws of England with
registered number LP010216 and having its registered office at 23 Clifton Hill,
London, NW8 0QE;

 

“CCF Group” means CCF and
its partners, all of them and each of them as the context admits;

 

“Cause” has the
meaning provided such term in the Continuing Director’s Service Agreement;

 

“Cost of
Goods Sold” means all costs incurred in connection with the
sale of products and services by the Company, including, but not limited to (I) bandwidth,
co-location, hosting cost for streaming television feeds to the Company’s
audience, (ii) content licensing costs payable to the Company’s content
partners for Internet broadcast rights, (iii) cost of satellite, (iv) cost
of production, and (v) other direct cost that associate with providing
service to consumers.

 

“Deferred
Consideration Shares Payment Date” means twenty (20) Business
Days after notice of the Post-Closing Revenue Amount has been given by Jump,
unless Jump or Sellers have requested an audit to determine the Post-Closing
Revenue Amount, in which case it is the 5th day after the such audit has been
completed and the results thereof delivered to Jump and the Sellers (unless
such day is not a Business Day in which case it shall be the next Business Day
after such 5th day);

 

“Deferred
Consideration Shares” means such number (if any) of common shares
of Jump to be issued credited as fully paid up and free of any Encumbrances
(other than in accordance with clause 3.6) pursuant to clause 3.4 and which are
traded on AIM;

 

“Directors” means the
persons listed as directors of the Company in part 1 of schedule 1;

 

“Disclosed” means fairly
disclosed to an appropriate level of detail (i.e., with sufficient detail to
enable a reasonable buyer to identify the nature and scope of the matter
disclosed) by the Disclosure Letter in the case of the Warrantors and “Disclosure” shall be construed
accordingly;

 

3

 

“Disclosure
Bundle” means the documents disclosed by or on behalf of the Sellers during
the course of Jump’s due diligence investigations and indexed and ordered into
disclosure bundles;

 

“Disclosure
Letter” means the letter in the agreed form of the same date as this agreement
(including the contents of any schedule or appendix thereto and the Disclosure
Bundle) from the Warrantors to Jump together with all documents annexed to it;

 

“Effective
Date” mean 31 July 2007, notwithstanding the date of this agreement;

 

“Encumbrance” means any
Security Interest, Pre-emption Right, restriction, assignment, hypothecation,
or any other interest, equity or other right of any person, or any agreement or
arrangement to create any of the same and Unencumbered”
shall be construed accordingly;

 

“Escrow
Account” means the Escrow Agent’s ordinary escrow account in
which the Escrow Agent shall hold any distributions, dividends or other
payments payable in respect of the Escrow Deposit and all cash proceeds
realized upon the sale of any and all of the Escrow Deposit in accordance with
the Escrow Agreement;

 

“Escrow
Agent” means Pedley, Zielke, Gordinier & Pence PLLC;

 

“Escrow
Agreement” means the agreement in the agreed form between the
Sellers, Jump and the Escrow Agent relating to the Escrow Deposit;

 

“Escrow
Deposit” means the Escrow Account and the Deferred Consideration
Shares delivered to, and held by the Escrow Agent pursuant to clause 3.4 and
the Escrow Agreement;

 

“Financial
Year” shall be construed in accordance with s223 CA85;

 

“GAAP” means Canadian
generally accepted accounting principles;

 

“Good
Reason” has the meaning provided such term in the Continuing Director’s
Service Agreement;

 

“Gross
Margin” means Gross Profit divided by Revenue;

 

“Gross
Profit” means Revenues minus Cost of Goods Sold;

 

“Initial
Consideration” means the aggregate amount of US$2,207,000 in cash
(which amount includes the Cash Deposit and all interest earned thereon) and
the Initial Consideration Shares;

 

4

 

“Initial
Consideration Shares” means the number of common shares of Jump
calculated in accordance with clause 3.2 and issued credited as fully paid up
and free of any Encumbrances (other than in accordance with clause 3.6) and
which are traded on AIM;

 

“Intellectual
Property” means rights in and in relation to Confidential
Information, trade marks, service marks, trade and business names, logos and
get up (including any and all goodwill associated with or attached to any of
the same), domain names, patents, inventions (whether or not patentable),
designs, copyrights (including, without limitation, rights in software),
database rights, semi-conductor topography rights, utility models and all
rights or forms of protection having an equivalent or similar nature or effect
anywhere in the world, whether enforceable, registered, unregistered or
registerable (including, where applicable, all renewals, extensions and
applications for registration) and the right to sue for damages for past and
current infringement (including passing off and unfair competition) in respect
of any of the same;

 

“Internet
TV” means the delivery via Internet Protocol of video and related audio
content from a source to a target device whether it be to a regular TV
(including via a direct connection from a computer or set top box), a computer,
or a portable device (including but not limited to a mobile phone) with such
content being transmitted live or on and on demand basis;

 

“Issue
Price” means the US$ price equal to the greater of (a) the volume
weighted-average closing price per common share of the Purchaser quoted on the
Toronto Stock Exchange based on the 5 Trading Days prior to the Completion Date
and (b) the sum of the closing price per common share of the Purchaser
quoted on the Toronto Stock Exchange on each of June 29 2007, July 31
2007, August 31 2007 and 28 September 2007, divided by four;

 

“Jump Group” means the
group of companies comprising Jump , any holding company from time to time of
Jump and any subsidiary of Jump (including, following Completion, the Company)
or of any such holding company and “member of
the Jump Group” shall be construed accordingly;

 

“Last
Accounting Date” means 31 December 2006;

 

“Last
Accounts” means the Accounts of the Company in respect of the
Financial Year ended on the Last Accounting Date a true copy of which is
annexed to the Disclosure Letter;

 

5

 

“Losses” includes, in
respect of any matter, event or circumstance, all demands, claims, actions,
proceedings, damages, payments, fines, penalties, losses (including direct,
indirect and consequential), costs (including legal costs), expenses (including
taxation), disbursements or other liabilities in any case of any nature
whatsoever;

 

“Management
Accounts” means the unaudited balance sheet of the Company as
at 31 May 2007 and the unaudited profit and loss account of the Company
for each of the monthly periods from 1 January 2007 to 31 May 2007
inclusive in the agreed form;

 

“Moral
Rights” means the rights of an author of a copyright literary, dramatic,
musical or artistic work or a director of a copyright film (“Work”) to be
identified as the author or director (as the case may be) of the Work, not to
have Work subjected to derogatory treatment and not to have a Work falsely
attributed to him as the author or director (as the case may be) in each case
wherever in the world enforceable;

 

“Post-Closing
Revenue Amount” shall be the revenues of the Company for the period
beginning August 1, 2007 and ending on July 31, 2009 determined in
accordance with clause 3.4;

 

“Planning
Acts” means the Town and Country Planning Act 1990, the Planning (Listed
Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances)
Act 1990, the Planning (Consequential Provisions) Act 1990 and the Planning and
Compensation Act 1991 and any amendment or substitution of such act from time
to time and the Rules, Regulations and Orders made under them or continued by
them as they apply from time to time;

 

“Pre-emption
Right” means any right to acquire, option, right of first refusal or other
right of pre-emption or any agreement or legally binding arrangement to create
any of the same;

 

“Proceedings” means any
proceedings, suit or action arising out of or in connection with this
agreement;

 

“Properties” means the property or properties short particulars
of which are set out in schedule 8;

 

“Purchaser” means JumpTV
Inc., a company incorporated under the laws of Canada with registered number
369888-2 and having its registered office at 463 King Street West, Suite 300,
Toronto, Ontario M5V 1K4 Canada;

 

6

 

“Purchaser’s
Senior Management” means each of G. Scott Paterson, Kaleil Isaza
Tuzman and Jason Reid (or any subsequent CEOs, Presidents or CFOs);

 

“Purchaser’s
Solicitors” means Pedley Zielke Gordinier & Pence,
PLLC of 2000 Meidinger Tower, 462 South 4th Street, Louisville, KY 40202 USA
and Berwin Leighton Paisner LLP of Adelaide House, London Bridge, London EC4R
9HA, UK,DX 92 London/Chancery Lane;

 

“Purchaser’s
Warranties” the warranties given by the Purchaser in clause 7
and schedule 6;

 

“Relevant
Accounting Standards” means, in relation to any Accounts, any of
the following in force on the relevant Accounting Date, namely any applicable
Statement of Standard Accounting Practice, Financial Reporting Standard, Urgent
Issues Task Force Abstract or Statement of Recommended Practice issued by the
UK Accounting Standards Board (or any successor body) or any committee of it or
body recognised by it;

 

“Remaining
Sellers” means the Sellers other than the Warrantors;

 

“Remaining
Sellers’ Warranties” means the warranties given by each of the Remaining
Sellers in Clause 8.2 and Schedule 4;

 

“Restricted
Shares” means that portion of the Initial Consideration Shares and the
Deferred Consideration Shares as are subject to transfer restrictions pursuant
to clause 3.6;

 

“Revenues” means
increases in economic resources, either by way of inflows or enhancements of
assets or reductions of liabilities, resulting from the ordinary activities of
an entity.  Revenues are generally recognized
when performance is achieved and reasonable assurance regarding measurement and
collectibility of the consideration exists.

 

“Security
Interest” means any mortgage, charge, pledge, lien, title
retention, sale and leaseback arrangement or any other agreement or arrangement
having the effect of conferring security;

 

“Sellers’
Representative” shall mean John Handley of Mintz Cottage,
Chaddesley Corbett, Kidderminster, Worcestershire DY1O 4RF; or such other
person as notified in writing either by John Handley for by the remainder of
the Sellers;

 

“Sellers’
Solicitors” means LLC Law of 4 Bramber Court, Bramber Road,
London, W14 9PW;

 

7

 

“Senior
Management” means each of Brydon, Steven Masters, Anthony
McCrossan and Paul Thatcher;

 

“Shareholder
Guarantees” means all guarantees, indemnities,
counter-indemnities and letters of comfort of any nature whatsoever (1) given
to any third party by the Company in respect of a liability of the Sellers
and/or as the context may require (2) given to any third party by all or
any of the Sellers in respect of a liability of the Company;

 

“Shareholder
Indebtedness” means all borrowing or indebtedness in the nature
of borrowing (including any indebtedness for monies borrowed or raised under
any bank or third party guarantee, acceptance credit, bond, note, bill of
exchange or commercial paper, letter of credit, finance lease, hire purchase
agreement, forward sale or purchase agreement or conditional sale agreement or
other transaction having the commercial effect of borrowing and all finance,
loan and other obligations of a kind required to be included in the balance
sheet of a company or other entity pursuant to UK Relevant Accounting
Standards) outstanding between the Company on the one hand and any of the
Sellers on the other hand;

 

“Shares” means the
entire issued share capital of the Company as shown in part 1 of schedule 1;

 

“Tax” means:

 

(a)           any form of
tax, and any levy, duty impost, deduction, or withholding in the nature of tax
whether governmental, statutory, state, provincial, local governmental or
municipal whenever created or imposed and whether of the United Kingdom, part
of the United Kingdom or elsewhere; and

 

(b)           all charges, surcharges, interest, penalties and
fines relating to any Tax falling within paragraph (a) of this definition;

 

“Taxation Liability” includes:

 

(a)           a liability to
make a payment of Tax where the Company is in receipt of a Tax claim whether or
not such Tax is also or alternatively chargeable against or attributable to any
other person;

 

(b)           the loss of any
relief taken into account in the Last Accounts; and

 

(c)           Tax arising in
the Company from the setting off or deduction in whole or in part of any
reliefs arising after the Effective Date against income, profits or gains
earned, accrued or received on or before 

 

8

 

the Effective Date or any
Tax arising in respect of the period before the Effective Date;

 

“Tax
Authority” means Her Majesty’s Revenue and Customs (which
shall include without limitation its predecessors, the Inland Revenue and HM
Customs and Excise) and any other governmental, state, federal or other fiscal,
revenue, customs, or excise authority, department, agency, body or office
whether in the United Kingdom or elsewhere in the world having authority or
jurisdiction for any Tax purpose;

 

“Tax Claim” means any
assessment, notice, demand or other document issued or action taken by or on
behalf of any Tax Authority or any form of return, computation or
self-assessment required by law from which it appears that the Company is
subject to or is sought to be made subject to, or will or might become subject
to, any Taxation Liability;

 

“Taxes Act” means the
Income and Corporation Taxes Act 1988;

 

“Trading
Day” means a day on which the Toronto Stock Exchange is open for the
transaction of business;

 

“Transaction
Documents” means this agreement, the Disclosure Letter and the
Continuing Director’s Employment;

 

“VATA” means the
Value Added Tax Act 1994;

 

“Warranties” means the
warranties given in clause 7 and schedule 3; and

 

“Warrantors” means Brydon,
Steven Masters, Anthony McCrossan, Paul Thatcher and Euan Drummond.

 

1.2           Statutory provisions

 

All references to statutes,
statutory provisions, enactments, EU Directives or EU Regulations shall include
references to any consolidation, re-enactment, modification or replacement of
the same, any statute, statutory provision, enactment, EU Directive or EU
Regulation of which it is a consolidation, re-enactment, modification or
replacement and any subordinate legislation in force under any of the same from
time to time except to the extent that any consolidation, re-enactment,
modification or replacement enacted after the date of this agreement would
extend or increase the liability of any party to another under this agreement.

 

9

 

1.3           Holding company and
subsidiary

 

A company or other entity
shall be a “holding company” for
the purposes of this agreement if it falls within either the meaning attributed
to that term in ss736 and 736A CA85 or the meaning attributed to the term “parent undertaking” in s258 CA85, and a
company or other entity shall be a “subsidiary”
for the purposes of this agreement if it falls within either the meaning
attributed to that term in ss736 and 736A CA85 or the meaning attributed to the
term “subsidiary undertaking” in
s258 CA85, and the terms “subsidiaries”
and “holding companies” are to be
construed accordingly.

 

1.4           Recitals, schedules, etc.

 

References to this agreement
include the recitals and schedules which form part of this agreement for all
purposes.  References in this agreement
to the parties, the recitals, schedules and clauses are references respectively
to the parties and their legal personal representatives, successors and
permitted assigns, the recitals and schedules to and clauses of this agreement.

 

1.5           Meaning of references

 

Save
where specifically required or indicated otherwise:

 

(a)           words importing
one gender shall be treated as importing any gender, words importing
individuals shall be treated as importing corporations and vice versa, words
importing the singular shall be treated as importing the plural and vice versa,
and words importing the whole shall be treated as including a reference to any
part thereof;

 

(b)           references to a
person shall include any individual, firm, body corporate, unincorporated
association, government, state or agency of state, association, joint venture
or partnership, in each case whether or not having a separate legal
personality.  References to a company
shall be construed so as to include any company, corporation or other body
corporate wherever and however incorporated or established;

 

(c)           references to
the word “include” or “including” (or any similar term) are not
to be construed as implying any limitation and general words introduced by the
word “other” (or any similar term)
shall not be given a restrictive meaning by reason of the fact that they are 

 

10

 

preceded by words indicating a particular
class of acts, matters or things;

 

(d)           references to
any English statutory provision or legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or other
legal concept, state of affairs or thing shall in respect of any jurisdiction
other than England be deemed to include that which most nearly approximates in
that jurisdiction to the English statutory provision or legal term or other
legal concept, state of affairs or thing;

 

(e)           any reference
to “writing” or “written” includes any method of
reproducing words or text in a legible and non-transitory form but, for the
avoidance of doubt, shall not include e-mail;

 

(f)            references to “indemnify” and to “indemnifying” any person against any
Losses by reference to any matter, event or circumstance includes indemnifying
and keeping that person indemnified against all Losses from time to time made,
suffered or incurred as a direct or indirect consequence of or which would not
have arisen but for that matter, event or circumstance;

 

(g)           references to “sterling” or “£” or “pounds”
are to the lawful currency of the United Kingdom as at the date of this
agreement.  References to “dollar” or “US$” or “$” are
to the lawful currency of the United States of America at the date of this
agreement.  References to “Euro” or “€”
are to the single currency of the European Union constituted by the Treaty on
European Union; and

 

(h)           references to
times of the day are to that time in London and references to a day are to a
period of 24 hours running from midnight to midnight.

 

1.6           Headings

 

Clause and paragraph
headings and the table of contents are inserted for ease of reference only and
shall not affect construction.

 

1.7           Connected persons

 

Section 839 Taxes Act
is to apply to determine whether one person is connected with another for the
purposes of this agreement.

 

11

 

1.8           Awareness

 

(a)           Where any
statement is qualified by the expression “to the best of the knowledge of the
Warrantors” or “so far as the Warrantors are aware” or any similar expression,
the Warrantors shall be deemed to have knowledge of:

 

(i)            anything of which the
Warrantors have actual knowledge; and

 

(ii)           anything of which they would
have had knowledge had they made reasonable enquiry of the Senior Management
immediately before giving the statement.

 

(b)           Where any statement is
qualified by the expression “to the best of the knowledge of the Purchaser” or “so
far as the Purchaser are aware” or any similar expression, the Purchaser shall
be deemed to have knowledge of:

 

(i)            anything of which the
Purchaser has actual knowledge; and

 

(ii)           anything of which it would
have had knowledge had it made reasonable enquiry of the Purchaser’s Senior
Management immediately before giving the statement.

 

2.             SALE AND PURCHASE OF SHARES

 

2.1           Sale and purchase of Shares

 

(a)           Subject to the
provisions of clause 2.6, each Seller shall at Completion sell and the
Purchaser shall buy in the proportions shown in column 3 of Part 2 of
schedule 1 (relying on the Warranties and Creative Warranties and the other
obligations of the Sellers under this agreement) the entire legal and
beneficial ownership in the Shares listed against that Seller’s name in column
2 of part 2 of schedule 1 with the rights and subject to the restrictions
attaching to those Shares in the articles of association of the Company but
otherwise free from all Encumbrances.

 

(b)           Each Seller
severally and individually warrants and represents to the Purchaser that he/it
has full power and the right to sell and transfer the legal and beneficial
title in the Shares listed against that Seller’s name in column 2 of part 2 of
schedule 1 on the terms set out in this agreement with full title guarantee.

 

12

 

2.2           Rights
attaching to the Shares

 

The Shares shall be sold
together with all rights attaching to them, including all rights to any
dividend or other distribution declared, made or paid after the Effective Date.

 

2.3           Waiver of
restrictions on transfer

 

Each Seller hereby
irrevocably waives and agrees to procure the waiver of any restrictions on
transfer (including rights of pre-emption) which may exist in relation to the
Shares, whether under the articles of association of the Company, any existing
shareholders agreement in respect of the Shares or otherwise.

 

2.4           Sale of all the Shares

 

The Purchaser shall not be
obliged to complete the purchase of any of the Shares unless the sale of all
the Shares is completed simultaneously in accordance with this agreement.

 

2.5           Termination of any existing
agreements in respect of the Shares

 

Any agreement involving the
Sellers with respect to the Shares shall be terminated.

 

2.6           Effective Date

 

Notwithstanding the
Completion Date, but subject always to Completion having taken place and the
cash element of the Initial Consideration having been received by or on behalf
of the Sellers, ownership of, and all risk and benefit in, the Shares shall be
deemed to have passed from the Sellers to the Purchaser on the Effective Date.

 

3.             CONSIDERATION

 

3.1           Total price

 

The total price for the
Shares to be paid by the Purchaser to the Sellers shall be the Consideration.

 

3.2           Calculation of Initial
Consideration Shares

 

The number of Initial
Consideration Shares shall be such number of common shares of the Purchaser as
shall at the Issue Price have a value in aggregate of US$2,743,000.

 

13

 

3.3           Satisfaction of Initial
Consideration

 

The Initial Consideration
shall be satisfied by the allotment and issuance of the Initial Consideration
Shares by Jump in an amount to Brydon with a value equal to US$734,500 and to
the other Sellers (other than Brydon) with a value equal to US$2,008,500 on the
basis and to the extent and in the proportions indicated in column 4 of part 2
of schedule 1; and the payment of US$418,344 in cash to Brydon and US$1,788,656
in cash to the other Sellers (other than Brydon) by Jump on the basis and to
the extent and in the proportions indicated in column 4 of part 2 of schedule
1.  No fraction of an Initial
Consideration Share shall be allotted or issued to the Sellers and the number
of Initial Consideration Shares shall be rounded to the nearest whole number.  Of the total US$2,207,000 deliverable
pursuant to this clause 3.3, the Sellers acknowledge receipt of US$250,000
which was previously deposited with Seller’s Solicitors as the Cash Deposit and
is being applied to the Initial Consideration payable at Completion.

 

On September 28, 2007
the Initial Consideration Shares shall be issued or deemed issued by Jump and
shall thereafter be delivered by Jump on or before October 8, 2007 to each
of the Sellers in the form of share certificates made out in their respective
names or in the names of their nominees.

 

3.4           Calculation and satisfaction
of Deferred Consideration

 

Brydon and the Sellers will
be eligible to receive up to a maximum number of Deferred Consideration Shares
as is equal to the quotient of US$6,790,000 divided by the Issue Price, of
which 23.27% of such Deferred Consideration Shares shall be reserved
exclusively for issuance to Brydon and 76.73% of such Deferred Consideration
Shares shall be reserved exclusively for the Sellers other than Brydon.  On September 28, 2007 the maximum number
of Deferred Consideration Shares shall be issued or deemed issued by Jump and
shall thereafter be delivered by Jump on or before October 8, 2007 to the
Escrow Agent to be held in accordance with the Escrow Agreement; the
certificates for which shall be made out in the names of the respective Sellers
or their nominees in accordance with the percentages set out in this clause
3.4, provided that any fractional shares resulting from such percentages shall
be disregarded.  On the Deferred Consideration
Shares Payment Date:

 

(a)           Brydon, if he (i) is
then employed by the Company, (ii) has ceased to be employed by the
Company because his employment has been terminated by the Company for any
reason other than Cause or (iii) if he has ceased to be employed by the
Company because 

 

14

 

he resigned for Good Reason, shall receive
(subject to the maximum provided above) in addition to Brydon’s portion of the
Initial Consideration, a number of Deferred Consideration Shares as is
determined by dividing (I) the sum of (A) US$1.00 for every £0.74
that Post-Closing Revenue Amount exceeds £3,341,493 up to a maximum
Post-Closing Revenue Amount of £4,176,866 and (B) US$1.00 for every £2.78
that the Post-Closing Revenue Amount exceeds £4,176,866 by (ii) the Issue
Price; and

 

(b)           the Sellers
other than Brydon shall receive in the proportions indicated in column 5 of
part 2 of schedule 1 a number of additional shares (subject to the maximum
provided above) as is determined by dividing (i) the sum of (A) US$1.00
for every £0.23 that Post-Closing Revenue Amount exceeds £3,341,493 up to a
maximum Post-Closing Revenue Amount of £4,176,866 and (B) US$1.00 for
every £0.81 that the Post-Closing Revenue Amount exceeds £4,176,866 by (ii) the
Issue Price;

 

and the Purchaser shall
instruct the Escrow Agent to deliver such Deferred Consideration Shares to the
Sellers in accordance with their pro-rata entitlement and any monies in the
Escrow Account to the Sellers’ Solicitors, PROVIDED THAT the Purchaser shall
not have notified the Sellers and/or Warrantors in writing of a Claim.  If by such time such a Claim shall have been
so notified, the provisions of clause 3.5 shall apply.

 

Any conflicting provision of
this agreement notwithstanding, except as otherwise specifically agreed to in
writing by the Purchaser, the Post-Closing Revenue Amount shall include (a) all
revenue that is included in any revenue line of the three year financial
forecast for the Company, attached as Schedule 9 (the “Forecast”) and (b) all
other types of revenue generated by the Company which are not included in any
revenue line of the Forecast and which generate a Gross Margin of 73% or more
for the last 5 months in the year ending 31 December 2007, 75% or more in
the year ending 31 December 2008 and 73% or more for the first 7 months in
the year ending 31 December 2009. 
The foregoing and clause 7.2 notwithstanding, the Company shall use its
best efforts to obtain and engage only in transactions or a series of related
transactions which it believes will make a positive Gross Profit as determined
by reference to its existing and historical operations and to its anticipated
future operating environment and shall not engage in any transactions or a
series of related transactions that it believes may not make a positive Gross
Profit unless it has been approved in writing by a majority of its then serving
directors.  The Post-Closing Revenue
Amount shall be determined in 

 

15

 

accordance with GAAP and in
accordance with the same methods used to calculate the Forecast, all as
determined in good faith by the Purchaser; provided that for a period of twenty
(20) Business Days after the Purchaser gives the Sellers its calculation of
such amount either the Purchaser or Sellers may request (by written notice to
the other) an audit to determine the Post-Closing Revenue Amount, which audit
will be conducted by a firm of accountants mutually agreed by the Purchaser and
Sellers, and failing such agreement within five (5) Business Days, such
firm of accountants as the President for the time being of the Institute of
Chartered Accountants in England and Wales may appoint (all costs and expenses
of which are to be shared) and the amount so determined by such firm of
accountants thereafter will be binding on the Purchaser and the Sellers as the
Post-Closing Revenue Amount for purposes of this agreement.  Notice of the Post-Closing Revenue Amount
shall be given by Jump to the Sellers no later than the 13th of August 2009.  Jump shall provide the Sellers, their
representatives and/or accountants, and the firm of accountants appointed to
audit the Post-Closing Revenue Amount, with such information, access and
assistance as they may reasonably require, including without limitation access
to the accounting records, software, books and registers of the Company, for
the purpose of reviewing and/or auditing the Post-Closing Revenue Amount.  Should the notice of the Post-Closing Revenue
Amount be given by Jump to the Sellers after the 13th of August 2009 or
should Jump be the party to request an audit, then interest in accordance with
clause 17 on the value of the Deferred Consideration Shares shall be calculated
with effect from when the Deferred Consideration Shares Payment Date would have
fallen had such notice been given on the 13th of August 2009.  For avoidance of doubt, any unearned Deferred
Consideration Shares will be deemed redeemed by Jump for no additional
consideration.

 

3.5           Consideration Settlement in
the Event of a Claim:

 

(a)           For purposes of
this Clause 3.5, the number of Deferred Consideration Shares that the Escrow
Agent shall retain or that the Purchaser shall be entitled to deduct as
satisfaction (or part satisfaction) of any liability, shall be the number as is
equal to the quotient of (i) the amount of the estimated liability or
actual liability (if same has been settled or determined) divided by (ii) the
volume weighted-average closing price per common share of the Purchaser quoted
on the Toronto Stock Exchange based on the 5 Trading Days prior to the Deferred
Consideration Shares Payment Date (in the case of clause 3.5(b)(iii) or
3.5(b)(iv)) or the date of actual release to the Purchaser (in the case of
clause 3.5(b)(vi)).

 

16

 

In the event that the common
stock of the Purchaser has been delisted, the number of Deferred Consideration
Shares that the Escrow Agent shall retain or that the Purchaser shall be
entitled to deduct as satisfaction (or part satisfaction) of any liability,
shall be the number as is equal to the quotient of (i) the amount of the
estimated liability or actual liability (if same has been settled or
determined) divided by (ii) the volume weighted-average closing price per
common share of the Purchaser quoted on the Toronto Stock Exchange based on the
30 Trading Days prior to the date such shares are delisted.

 

(b)           The Purchaser
and Sellers agree that:

 

(i)            No Deferred Consideration
Shares or anything else shall be released from the Escrow Deposit except as provided
in this clause 3.5.

 

(ii)           To the extent that there are
no Claims notified as of the eighteen month anniversary of the Effective Date,
then on the Deferred Consideration Shares Payment Date the Purchaser and the
Sellers shall instruct the Escrow Agent to release the Escrow Deposit and the
Escrow Agent shall promptly thereafter cause all the Deferred Consideration
Shares to be transferred to the Sellers in accordance with the requirements of
clause 3.4 and any monies in the Escrow Account to the Sellers’ Solicitors.

 

(iii)          To the extent that on the
Deferred Consideration Shares Payment Date any Claim against one or more
Sellers has been settled or determined, but not yet paid to the Purchaser, the
Purchaser shall be entitled to deduct pro-rata from such portion of the Escrow
Deposit as is payable to such Seller(s) an amount equal to the amount of
such Seller’s liability in respect of the Claim (as so settled or determined)
in satisfaction (or part satisfaction, as the case may be) of the relevant
Seller’s liability.  Any Deferred
Consideration Shares so deducted will be deemed redeemed by Jump for no
additional consideration, apart from the settlement of all or a part of the
relevant Seller’s liability.

 

(iv)          To the extent that the
Sellers and Escrow Agent have been notified of one or more Claims against any
one or more Sellers, and provided that such Claims have not been settled or
determined and/or the amounts proven payable in respect 

 

17

 

of such settlement or determination paid,
then the Sellers and the Purchaser shall instruct the Escrow Agent to retain
from each such Seller’s entitlement to the Escrow Deposit an amount equal to
such Seller’s pro rata share of the estimated liability of the Claims as notified,
provided that should any such Claim lapse or have lapsed in accordance with
paragraph 3.2 of Schedule 5, then the amounts so retained shall immediately be
released and transferred to the relevant Sellers.

 

(v)           The balance of the Escrow
Deposit which is not subject to any such Claims shall be released and
transferred to the Sellers in accordance with the provisions of clause 3.4.

 

(vi)          As soon as practicable after
any Claim against any one or more Sellers is settled or otherwise determined
(but in any event no more than 10 Business Days thereafter), the Purchaser and
Sellers shall instruct the Escrow Agent to release such amount of the relevant
Seller’s entitlement to the Escrow Deposit back to Purchaser, as necessary to
satisfy (or part satisfy) the settled or determined Claim, unless the Purchaser
has elected not to accept any shares making up part of the Deferred
Consideration Shares as settlement of such Claims.  The Sellers acknowledge that their obligation
to pay or settle any Claim shall be their personal liability and shall not be
paid from a reduction of the Deferred Consideration Shares except with the
consent of Purchaser, which can be refused in its sole discretion.  Where the Purchaser elects not to be paid
from a reduction of the Deferred Consideration Shares or where after the
satisfaction of any Seller’s liability a balance of the Escrow Deposit remains
payable to such Seller, then such Deferred Consideration Shares or balance of
Escrow Deposit shall immediately be released to the relevant Seller.

 

(vii)         Any bank or other charges
arising on the Escrow Account shall be charged to the Escrow Account.

 

(viii)        Any interest or
profit accruing to the Escrow Account (subject to any deduction of tax at
source and any bank or other charges properly charged to the Escrow Account)
shall be retained in the Escrow Account. 
Each time funds are paid out of the Escrow Account such funds shall have
added to them the corresponding proportion of the interest and 

 

18

 

profit accrued to the Escrow Account (subject
to any deductions as above).

 

(ix)           The Escrow
Deposit shall be held by the Escrow Agent for the benefit of the Sellers and
the Purchaser and on the terms set out in this clause 3.5(b).  The Sellers and Purchaser shall as and when
necessary give instructions to the Escrow Agent in order to procure compliance
with this clause 3.5(b).

 

(x)            The Purchaser
and Sellers shall direct the Escrow Agent to maintain a ledger (the “Escrow Ledger”) setting forth (i) all
income or other items earned on and distributions from or other items charged
against the Escrow Deposit and (ii) with respect to any distribution
pursuant to this agreement, the provision of this agreement pursuant to which
such distribution has been made.  The
Purchaser and Sellers shall each have access to the Escrow Ledger from time to
time during business hours.

 

(c)           For the
avoidance of doubt nothing contained in this clause 3.5 shall prejudice the
right of the Purchaser to recover against any Seller in respect of any Claim
(whether such Claim is made before or after the eighteen month anniversary of
the Effective Date) otherwise than in accordance with the provisions of this
clause 3.5.

 

(d)           Any amounts or
shares payable / transferable to the Purchaser out of the Escrow Deposit in
accordance with the terms of this clause 3.5 shall (to the extent permissible
at law) be treated as a reduction of the Consideration.

 

(e)           For the
purposes of clause 3.5, “settlement”
shall mean an agreement in writing signed by or on behalf of the relevant
Sellers and the Purchaser in respect of one or more relevant Claims and a “determination” shall mean a judgement of
any court of competent jurisdiction in England and Wales and “settled” and “determined” shall be construed accordingly.

 

3.6           Transfer restrictions

 

(a)           On September 28,
2007 the Initial Consideration Shares shall be issued or deemed issued by Jump
and shall thereafter be delivered by Jump on or before October 8,
2007.  The Initial Consideration Shares
shall constitute Restricted Shares.  Of
the total Initial Consideration Shares received by each Seller, 38.5% shall
cease 

 

19

 

to be Restricted Shares on each of the 6
month and 12 month anniversary of the Effective Date and the remaining 23%
shall cease to be Restricted Shares on the 18 month anniversary of the
Effective Date, subject always to clause 3.6(d) below.  The Purchaser shall use its reasonable
efforts to introduce the Sellers to stockbrokers after Completion in order to
help facilitate their sale of the Initial Consideration Shares.

 

(b)           Subject always to clause 3.6(d) below,
with respect to the Deferred Consideration Shares delivered to the Sellers
pursuant to this agreement, and subject to applicable laws and regulations as
in effect from time to time 50% of such shares shall cease to be Restricted
Shares on the later of the date of receipt or 30 September 2009 and the
remainder of such shares shall cease to be restricted Shares on 30 September 2010.  The delivery of any Deferred Consideration
Shares shall remain in all events subject to the foregoing parts of this clause
3.

 

(c)           Subject always
to clause 3.6(d) below, each Seller agrees that so long as any Initial
Consideration Shares or Deferred Consideration Shares it receives constitute
Restricted Shares it will not with respect to such Restricted Shares, (i) offer
to sell, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any Restricted
Shares or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Restricted Shares, whether any such
swap transaction is to be settled by delivery of the Restricted Shares or other
securities, in cash or otherwise.

 

(d)           Notwithstanding
the above, if a Claim against a Seller has been settled or determined, then all
restrictions, on such amount of the Initial Consideration Shares or Deferred
Consideration Shares (to the extent they have actually been “earned” by the
Sellers in accordance with clause 3.4) as is required by any Seller to satisfy
such Claim against such Seller, shall be removed and the Seller shall be
entitled to sell, transfer or otherwise dispose of such shares.  Further, the Sellers shall be entitled to
transfer such shares amongst themselves or to a nominee, provided that any such
shares so transferred to another of the Sellers shall still be subject to the
restrictions in clause 3.6(c).

 

20

 

(e)           With respect to any Initial
Consideration Shares or Deferred Consideration Shares that cease to be Restricted
Shares, the Purchaser shall cause such shares to be freely tradable on AIM.

 

3.7           Costs of issuing shares

 

The Purchaser shall be
solely responsible for the payment of any tax, duty, fees, costs or other
amounts payable on the issue of the Initial Consideration Shares and the
Deferred Consideration Shares.

 

4.             COMPLETION ACCOUNTS

 

4.1           The Purchaser may wish to
prepare Completion Accounts after the Completion Date and the Sellers shall, at
the Purchaser’s cost, lend such reasonable assistance as required by the
Purchaser in the preparation of such accounts and shall use reasonable
endeavours to ensure that the Sellers’ accountants, at the Purchaser’s cost,
provide such reasonable assistance to the Purchaser and/or its accountants.

 

4.2           Notwithstanding the
preparation of the Completion Accounts, the outcome thereof shall not affect or
adjust the Consideration payable to the Sellers pursuant to this agreement.

 

4.4           All costs associated with
the preparation of the Completion Accounts will be borne by the Purchaser.

 

5.             COMPLETION

 

5.1           Timing

 

Completion shall take place
as soon as reasonably practical after the signing of this agreement.

 

5.2           Location

 

Completion shall take place
at the offices of the Purchaser’s UK Solicitors when all (but not some only) of
the events detailed in this clause 5 shall occur.

 

5.3           Sellers’ obligations at
Completion

 

At Completion, the Sellers
shall:

 

(a)           deliver (or
cause to be delivered) to the Purchaser the items listed in part 1 of schedule
2 (the Purchaser receiving those items, where appropriate, as agent of the
Company); and

 

21

 

(b)           procure that
all necessary steps have been taken properly to effect the matters listed in
part 2 of schedule 2 at a board meeting of the Company and deliver to the
Purchaser duly signed minutes of such board meeting.

 

5.4           Purchaser’s obligations at
Completion

 

At Completion, the Purchaser
shall do or deliver (or cause to be delivered) to the Sellers the matters or
items listed in part 3 of schedule 2.

 

5.5           Receipt of funds and stock
certificates

 

The Sellers hereby confirm
that the Sellers’ Solicitors are irrevocably authorised by the Sellers to
receive:

 

(a)           the payment of
the cash elements of the Initial Consideration and Deferred Consideration Shares
on the Sellers’ behalf and the receipt by the Sellers’ Solicitors shall be an
absolute discharge for the Purchaser who shall not be concerned to see to the
application thereof or be answerable for the loss or misapplication of such
sum; and

 

(b)           the share
certificates in respect of the Initial Consideration Shares and Deferred
Consideration Shares allotted and issued to any of the Sellers or their
nominees.

 

5.6           No Waiver

 

If, notwithstanding the
occurrence of any fact, matter or event which would otherwise give rise to a
right to terminate this agreement under this clause 5, any party proceeds to
Completion, the fact that they have proceeded to Completion shall not
constitute a waiver of any right or entitlement of that party to make any claim
under the Transaction Documents, provided that none of the parties shall be
entitled to rescind or terminate this agreement after Completion.

 

6.             COVENANTS

 

6.1           Restrictions of Brydon

 

Brydon covenants with the
Purchaser and the Company (with the intention of assuring to the Purchaser the
full benefit and value of the goodwill and connections of the Company and as a
constituent part of the agreement for the sale of the Shares) that, except with
the consent in writing of the

 

22

 

Purchaser or in the proper
performance of his duties under the Continuing Director’s Service Agreement:

 

(a)           for the period of two (2) years
after the Effective Date, he will not within any country in which the Company
is carrying on business at the Effective Date or anywhere else in the world
either on his own account or in conjunction with or on behalf of any other
person, carry on or be engaged, concerned or interested, directly or
indirectly, whether as shareholder, director, partner, agent or otherwise, in
carrying on any business involving the broadcast of cycling events or footage
through the medium of Internet TV which competes with the business carried on
by the Company at the Effective Date (other than as a holder of shares in a
company carrying on such a business where the shareholding is for investment
purposes only and does not confer any control over the business in question).

 

(b)           for the period of two (2) years
after the Effective Date, he will not, either on his own account or in
conjunction with or on behalf of any other person, interfere or seek to
interfere with the continuance of supplies to the Company from any person who
shall at any time within the 12 months preceding the Effective Date have been a
supplier of goods or services to the Company;

 

(c)           for the period of two (2) years
after the Effective Date, he will not, either on his own account or in
conjunction with or on behalf of any other person, solicit or entice away or
attempt to solicit or entice away from the Company, offer employment to or
employ any person (save where such person has voluntarily resigned prior to any
offer of employment or has responded to an advertisement made to the general
public) who is at the Effective Date or who was at any time during the period
of twelve months immediately preceding the Effective Date employed in a
managerial, supervisory, technical or sales capacity by, or engaged as a
consultant to, the Company and who remains so employed or engaged immediately
prior to the relevant breach of this clause 6.1(c) (whether or not such
person would commit a breach of contract by reason of leaving such employment
or engagement);

 

(d)           he will not for a period of
3 years after the termination of his employment make use of or disclose or
divulge to any person (other than to officers or employees of the Company whose
province it is to know the same) any Confidential Information relating to the
Company unless:

 

23

 

(i)            required by law or any
governmental or regulatory body in any jurisdiction; or

 

(ii)           the relevant information was
or becomes in the public domain (other than by reason of a breach of this
clause by Brydon);

 

(e)           if, in connection with the
business or affairs of the Company, he shall have obtained Confidential
Information belonging to any third party under an agreement purporting to bind
the Company which contained restrictions on disclosure, he will not without the
previous written consent of the Purchaser and, if appropriate, the relevant
third party at any time infringe such restrictions; and

 

(f)            he will not at any time
hereafter in relation to any trade, business or company use a trade name, trade
or service mark, design or logo in such a way as to be capable of or likely to
be confused with any trade name, trade or service mark, design or logo used by
the Company at the Effective Date (whether registered or not).

 

6.2           Severance

 

Each of the restrictions
contained in clauses 6.1(a) to 6.1(f) is separate and severable and
in the event of any such restriction being determined to be unenforceable in
whole or in part for any reason, that unenforceability shall not affect the
enforceability of the remaining restrictions or (in the case of restrictions
unenforceable in part) the remainder of that restriction.

 

6.3           Exception from Brydon
restrictions

 

The restrictions contained
in clause 6.1 shall be without prejudice to performance by and shall not limit
the restrictions on the Continuing Director under the terms of agreements
entered into pursuant to this agreement.

 

6.4           Modification of Brydon
restrictions

 

While the restrictions
contained in clauses 6.1, 6.2 and 6.3 are considered by the parties to be
reasonable in all the circumstances, it is recognised that restrictions of the
nature in question may fail for technical reasons and accordingly it is hereby
agreed and declared that if any of such restrictions shall be adjudged to be
void as going beyond what is reasonable in all the circumstances for the
protection of the interests of the Purchaser but would be valid if part of the
wording thereof were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby 

 

24

 

reduced in scope, the said
restriction shall apply with such modifications as may be necessary to make it
valid and effective.

 

7.             PURCHASER’S OBLIGATIONS

 

7.1           Working Capital

 

The Purchaser shall make a
total amount of US$260,000 (two hundred and sixty thousand US dollars)
available for use by the Company as working capital (the “Working Capital Amount”).

 

7.2           Restrictions on Purchaser

 

The Purchaser irrevocably
agrees and undertakes that until 31 July 2009 it shall not, without the
consent of the Sellers, such consent not to be unreasonably withheld,
conditioned or delayed,:

 

(a)           unless required by law, make
or pass or procure to be made or passed any petition or resolution for the
winding up or dissolution of the Company, or any other insolvency procedure, or
for the consolidation or amalgamation of the Company with any company,
association, partnership or legal entity and shall use its best endeavours to
resist any such petition or resolution;

 

(b)           cease (directly or
indirectly) to be the beneficial owner of the whole of the issued share capital
of the Company nor sell or otherwise dispose of or encumber any shares in the
Company (or any interest therein) or procure or allow the allotment of any
further shares in the Company;

 

(c)           procure or allow any change
in the registered or trading name(s) or corporate identity of the Company;

 

(d)           change the country or
territory in which the Company operates its business or is registered;

 

(e)           divert the revenue from any
current or prospective customers, subscribers, advertisers or other streams of
revenue of the Company to any member of the Jump Group or any other person nor
make a transfer to the Company of any onerous undertaking or obligation of the
Purchaser or any member of the Jump Group or any other person;

 

25

 

(f)            take or allow any member of
the Jump Group to take any act to deliberately frustrate or prejudice the
amount of revenue which the Company might otherwise achieve;

 

(g)           allow the sale or provision
by the Company of any goods or services to the Purchaser or any member of the
Jump Group, or the purchase by the Company from the Purchaser or any member of
the Jump Group of any goods or services at a price other than a commercial arms
length rate for the goods or services in question;

 

(h)           make any change to the
nature of the business of the Company or allow any business activities to be
merged with those of the Company and shall ensure that the business of the
Company shall be maintained as a separate business and will be carried on as a
going concern in the normal course and shall use its best endeavours to
maintain the trade and trade connections of the Company;

 

(i)            require any member of Senior
Management to work in any other business of the Jump Group, save where such
work shall not materially divert the time or energy of such Senior Management
from the business of the Company;

 

(j)            to the detriment or
exclusion of the Company, exploit or require or permit to be exploited any
business idea or plan, whether in the business plan of the Company or
otherwise, which was originally conceived by the Company, by the Purchaser of
any member of the Jump Group;

 

(k)           agree to terminate or allow
the termination of any material customer or supplier contract other than in the
ordinary course of business;

 

(l)            dispose of all or a material
part of the undertaking or business of the Company;

 

(m)          dispose of or remove from
the United Kingdom, any material assets used or required for the operation of
the Company’s business (otherwise than in the ordinary course of business) or
enter into any other transaction otherwise than in the ordinary course of
business;

 

(n)           procure or allow that the
Purchaser or any member of the Purchaser’s Group competes with the Company by
developing, broadcasting or having any other interest in another Internet TV cycling
channel; or

 

26

 

(o)           interfere or seek to
interfere with the Company’s renewal of any existing customer, supplier or
advertising contracts; or

 

(p)           allow any change to the
Company’s current or future:

 

(i)            organisational, business or
overhead structure;

 

(ii)           staffing arrangements;

 

(iii)          marketing plan spend or
sales budget;

 

(iv)          current or contingent
product or product development plans;

 

(v)           information technology and
accounting systems; or

 

(vi)          production and handling
systems;

 

except where such changes
are reasonably intended by Purchaser to either result in an increase in the
Company’s Revenue or its profitability.

 

8.             THE WARRANTORS’ WARRANTIES
AND INDEMNITY

 

8.1           Warranties of the Warrantors

 

Each of the Warrantors
warrants severally and individually to the Purchaser that, except as Disclosed,
each of the statements set out in schedule 3 will on exchange be true and
accurate.  The Warrantors shall procure that,
save as may be necessary to give effect to this agreement, the Company shall
not, before Completion, without the prior written consent of the Purchaser do,
or procure or allow anything which might constitute or result in a material
breach of the Warranties, or make any of them inaccurate, if they were given at
Completion.

 

8.2           Warranties of the Remaining
Sellers

 

Each of the Remaining
Sellers warrants severally and individually to the Purchaser that each of the
statements set out in schedule 4 will at on exchange and thereafter at all
times up to and including Completion be true and accurate in respect of
him/her/itself.

 

8.3           Disclosures

 

No letter, document or other
communication (whether or not in writing) shall be deemed to constitute a
Disclosure unless it is expressly incorporated in or annexed to the Disclosure
Letter.

 

27

 

8.4           Warranties separate

 

Each of the Warranties and
Remaining Sellers’ Warranties shall be separate and independent and, save as
expressly provided to the contrary in this agreement, shall not be limited by
reference to or inference from any other Warranty or anything in the
Transaction Documents.

 

8.5           Information supplied to the
Warrantors

 

The Warrantors shall not be
entitled to raise as a defence to a claim by the Purchaser under any of the
Transaction Documents the fact that they had relied on information provided to
them by the Company or any of its officers, employees, workers or agents
(including advisers).

 

8.6           No claim against the Company
or employees

 

The Warrantors hereby
irrevocably waive any and all claims against the Company and any of its
officers, employees, workers and, in connection only with the sale of the
Shares, its agents (including advisers) and undertake (if any claim is made
against any of them in connection with the sale of the Shares to the Purchaser)
not to make any claim against or seek any contribution from any such person
(and undertake that no other person claiming under or through them will make
any such claim or seek any such contribution).

 

8.7           Limitation on liability of
the Warrantors under the Warranties.

 

The liability of the
Warrantors in respect of any claim under the Warranties or under the Tax
Indemnity in clause 8.8 shall be limited as set out in schedule 5.

 

8.8           Tax Indemnity

 

The Warrantors covenant
severally to pay to the Purchaser on an after-tax basis an amount equal to any
Taxation Liability of the Company arising from any matter, fact, event or
circumstance that has occurred on or before the Effective Date in respect of
the Company and/or its business and any Taxation Liability as set out in (c) of
the definition of Taxation Liability arising at any time and all the
limitations of liability as are set out in schedule 5 also apply to the Tax
Indemnity given in this clause.

 

9.             PURCHASER’S WARRANTIES AND
INDEMNITY

 

9.1           The Purchaser warrants to
the Sellers that each of the statements set out in schedule 6 will at
Completion be true and accurate.

 

28

 

9.2           Disclosures

 

No letter, document or other
communication (whether or not in writing) shall be deemed to constitute a
disclosure against any of the Purchaser’s Warranties unless it is expressly
disclosed in writing to Sellers.

 

9.3           Purchaser’s Warranties
separate

 

The Purchaser’s Warranties
shall be separate and independent and, save as expressly provided to the
contrary in this agreement, shall not be limited by reference to or inference
from any other Purchaser’s Warranty or anything in the Transaction Documents.

 

9.4           Limitation on liability of
the Purchaser under the Purchaser’s Warranties.

 

The liability of the
Purchaser in respect of any claim under the Purchaser’s Warranties shall be
limited as set out in schedule 7.

 

9.5           The Purchaser shall
indemnify and keep Brydon and Anthony McCrossan indemnified against any claim
made against them after the Effective Date in respect of the indebtedness of
the Company pursuant to personal guarantees given by Brydon in favour of Azule
Limited and by Brydon and Anthony McCrossan in favour of NetBanx Limited for
obligations owed by the Company to Azule Limited and NetBanx Limited.

 

10.          TIME OF THE ESSENCE

 

10.1         Time shall not be of the
essence of this agreement, either as regards times, dates and periods specified
in the agreement or as regards any times, dates or periods that may by
agreement between the parties be substituted for any of them unless:

 

(a)           time is expressly stated to
be of the essence in relation to that obligation; or

 

(b)           one party fails to perform
an obligation by the time specified in this agreement and the other parties
serve a notice on the defaulting party requiring it to perform the obligation
by a specified time and stating that time is of the essence in relation to that
obligation.

 

10.2         The provisions of clause
10.1 shall not apply to any claim relating to the failure by the Purchaser to
pay any Consideration when due and time for payment of any of the Consideration
shall be of the essence.

 

29

 

11.          ANNOUNCEMENTS

 

11.1         Prior approval of
announcements

 

Subject to the provisions of
clauses 11.2, 11.3 and 11.4 below, no disclosure or announcement relating to
the existence or subject matter of this agreement shall be made or issued by or
on behalf of the Sellers or the Purchaser or any member of the CCF Group or the
Company without the prior written approval of the other parties (which approval
may be subject to reasonable conditions but shall otherwise not be unreasonably
withheld or delayed) provided that these restrictions shall not apply to any
disclosure or announcement if required by any law, applicable securities
exchange, the nominated advisor of the Purchaser, supervisory, regulatory or
governmental body provided further that any such disclosure shall be consistent
with any disclosure previously approved by the other party and, if such
disclosure includes a press release, such press release shall first be subject
to this clause 11.1.

 

11.2         Disclosure in Public
Securities Filings

 

Nothing in this agreement
shall prevent the Purchaser from disclosing information regarding the Company
and its businesses, the terms of this transaction and all other relevant
information necessary for any filings the Purchaser is required to make under
the laws of any applicable jurisdiction or to comply with listing requirements
applicable to companies listed for trading on the Toronto Stock Exchange or
AIM.

 

11.3         Notices to customers etc.

 

The Purchaser shall not make
or send after Completion any announcement to a contract counter party,
customer, client or supplier of the Company informing it that the Purchaser has
purchased the Shares, without the prior consultation by the Sellers.

 

11.4         Consultation

 

Except in relation to clause
11.2 the party making the communication shall use its reasonable endeavours to
consult with the other party in advance as to the form, content and timing of
the communication.

 

12.           COUNTERPARTS

 

This agreement may be
executed in any number of counterparts and by the parties to it on separate
counterparts and each such counterpart shall constitute an original of this
agreement but all of which together constitute 

 

30

 

one and the same
instrument.  This agreement shall not be
effective until each party has executed at least one counterpart.  This Agreement may be executed by facsimile
signatures, which shall be treated as originals for all purposes.

 

13.           FURTHER ASSURANCE

 

Each of the parties agree to
perform (or procure the performance of) all further acts and things, and execute
and deliver (or procure the execution and delivery of) such further documents,
as may be required by law or as any other party may reasonably require, whether
on or after Completion, to implement and/or give effect to this agreement and
the transaction contemplated by this agreement and for the purpose of vesting
in the parties the full benefit of the assets, rights and benefits to be
transferred to them under or pursuant to this agreement.

 

14.           VARIATION, WAIVER AND
CONSENT

 

14.1         No variation or waiver of
any provision or condition of this agreement shall be effective unless it is in
writing and signed by or on behalf of each of the parties (or, in the case of a
waiver, by or on behalf of the party waiving compliance).

 

14.2         Unless expressly agreed, no
variation or waiver of any provision or condition of this agreement shall
constitute a general variation or waiver of any provision or condition of this
agreement, nor shall it affect any rights, obligations or liabilities under or
pursuant to this agreement which have already accrued up to the date of
variation or waiver, and the rights and obligations of the parties under or
pursuant to this agreement shall remain in full force and effect, except and
only to the extent that they are so varied or waived.

 

14.3         Any consent granted under
this agreement shall be effective only if given in writing and signed by the
consenting party and then only in the instance and for the purpose for which it
was given.

 

15.           RIGHTS AND REMEDIES OF THE
PARTIES

 

15.1         No failure or delay by any
party in exercising any right or remedy provided by law under or pursuant to
this agreement shall impair such right or remedy or operate or be construed as
a waiver or variation of it or preclude its exercise at any subsequent time.  No single or partial exercise of any right or
remedy by any party shall preclude any other or further exercise of such right
or remedy or the exercise of any other right or remedy.

 

31

 

15.2         The rights and remedies of
the parties under or pursuant to this agreement are cumulative, may be
exercised as often as the parties consider appropriate and are in addition to
their rights and remedies under general law.

 

15.3         The rights and remedies of
the parties under this agreement shall not be affected, and none of the parties’
liabilities under this agreement shall be released, discharged or impaired, by:

 

(a)           Completion;

 

(b)           any failure to terminate
this agreement;

 

(c)           any event or matter
whatsoever which otherwise might have affected such rights and remedies other
than a specific and duly authorised written waiver or release by the Purchaser
or the Sellers, as the case may be;

 

(d)           in the case of a liability
of the Sellers or the Warrantors, any imputed or constructive knowledge of the
Purchaser or any of its agents or advisors other than any matter Disclosed in
the Disclosure Letter.

 

16.           ENTIRE AGREEMENT

 

16.1         Entire agreement

 

Subject to any terms implied
by law, the Transaction Documents and any other documents relating to the
subject matter of any of the Transaction Documents and dated the same date as
this agreement together represent the whole and only agreement between the
parties in relation to their subject matter and supersede any previous
agreements (whether written or oral) between all or any of the parties in
relation to the subject matter of any such document.

 

Each
of the parties acknowledge that:

 

(a)           in entering into this
Agreement they do not rely on any statement or representation (in any case
whether oral or written, express or implied and whether negligently or
innocently made) of any person (whether a party to this Agreement or not) which
is not expressly set out in this Agreement;

 

(b)           any remedy available to them
under this agreement shall be a claim for breach of contract; and

 

32

 

(c)                                nothing in this Clause 16 shall operate
to limit or exclude and liability arising from any fraudulent or dishonest
statement, act or omission.

 

17.                               DEFAULT INTEREST

 

17.1         If any parties which are required to pay any sum under
this agreement fail to pay any sum payable by them under this agreement on the
due date for payment (the “Defaulting
Parties”), they shall pay interest on such sum for the period from
and including the due date up to the date of actual payment (after as well as
before judgement) in accordance with this clause.

 

17.2         The Defaulting Parties shall pay interest at the
annual rate which is the aggregate of 2 per cent per annum and the base rate
from time to time of National Westminster Bank Plc.

 

17.3         Interest under this clause 17 shall accrue on the
basis of the actual number of days elapsed and a 365-day year and shall be paid
by the Defaulting Parties on demand. 
Unpaid interest shall compound monthly.

 

18.                               WITHHOLDING AND GROSSING-UP

 

18.1         Save as otherwise permitted under the terms of this
agreement, each party shall pay all sums payable by them to the other under
this agreement free and clear of all deductions or withholdings unless the law
requires a deduction or withholding to be made. 
Otherwise than in relation to a payment of interest, if a deduction or
withholding is so required the paying party shall pay such additional amount as
will ensure that the net amount the payee receives equals the full amount which
it would have received had the deduction or withholding not been required.

 

18.2         If any Tax Authority brings any sum (except for the
Consideration) paid by any party under or pursuant to this agreement into
charge to Tax, then the party liable to pay shall pay such additional amount as
will ensure that the total amount paid, less the Tax chargeable on such amount,
is equal to the amount that would otherwise be payable under this agreement.

 

19.                               NOTICES

 

19.1         Save as otherwise provided in this agreement, any
notice, demand or other communication (“Notice”)
to be given by any party under, or in connection with, this agreement shall be
in writing and signed by or on behalf of the party giving it.  Any Notice shall be served by sending it by
fax to the number set out in clause 19.2, or delivering it by hand to the 

 

33

 

address set out in clause 19.2 and in each case marked
for the attention of the relevant party set out in clause 19.2 (or as otherwise
notified from time to time in accordance with the provisions of this clause 19).  Any Notice so served by fax or hand shall be
deemed to have been duly given or made as follows:

 

(a)                                  if sent by fax, at the time of
transmission; or

 

(b)                                 in the case of delivery by hand, when
delivered,

 

provided that in each case where delivery by fax or by hand occurs
after 6 pm on a Business Day or on a day which is not a Business Day, service
shall be deemed to occur at 9 am on the next following Business Day.

 

References to time in this clause are to local time in the country of
the addressee.

 

19.2         The addresses and fax numbers of the parties for the
purpose of clause 19.1 are as follows:

 

(a)                                  Sellers’ Representative: John Handley

Address:        ·

 

Copy to be sent (for information only) to: Jeremy Clarke of LLC Law, 4
Bramber Court, Bramber Road, London, W14 9PW (Fax: +44 (0)20 7471 0371)

 

Copy to be sent (for information only) to: Simon Brydon of ·.

 

Copy to be sent (for information only) to: Creative Capital Fund:
Attention of Fred
Mendelsohn of CCF, Dilke House, 1 Malet Street, London, WC1E 73N
(Fax: +44 (0)870 133 6872)

 

Copy to be sent (for information only) to: Dov Black of Zatman & Co
of 1 The Cottages, Deva Centre, Trinity Way, Manchester M3 7BE (Fax: +44 (0)161
834 4826)

 

Copy to be sent (for information only) to: Paul Thatcher of ·

 

34

 

(b)                                 Purchaser:  Attention of G. Scott Paterson, Chairman & CEO;

 

Address:                                 JumpTV Inc.

463 King Street West

Toronto, Ontario

M5V 1K4

Canada

Fax:      +1
416 849 3700

 

A copy to be sent (for information only) to David M. Pedley at 2000
Meidinger Tower, 462 South 4th Street, Louisville, KY 40202, USA.  (Fax: +11 502-584-0422)

 

19.3         A party may notify all other parties to this agreement
of a change to its name, relevant addressee, address or fax number for the
purposes of this clause 19, provided that such notice shall only be effective
on:

 

(a)                                  the date specified in the notification as
the date on which the change is to take place; or

 

(b)                                 if no date is specified or the date
specified is less than five Business Days after the date on which notice is
given, the date following five Business Days after notice of any change has
been given.

 

19.4         In proving service it shall be sufficient to prove
that the envelope containing such notice was properly addressed and delivered
to the address shown thereon or that the facsimile transmission was made and a
facsimile confirmation report was received, as the case may be.

 

20.                               COSTS

 

20.1         Each of the parties shall be responsible for its own
legal, accountancy and other costs, charges and expenses incurred in connection
with the negotiation, preparation and implementation of this agreement and any
other agreement incidental to or referred to in this agreement.

 

20.2         Each Seller undertakes to the Purchaser that neither
the Company has paid or will pay (in connection with the sale and purchase
contemplated by this agreement) any legal, accounting or other professional
charges, fees, expenses or commissions relating to the sale of the Shares
including, without limitation, any such costs incurred in connection with any
investigation of the affairs of the Company or the negotiation, preparation,
execution and carrying into effect of this agreement.

 

35

 

20.3         The Purchaser undertakes to the Seller that neither
the Company nor the Company has paid or will pay (in connection with the sale
and purchase contemplated by this agreement) any legal, accounting or other
professional charges, fees, expenses or commissions relating to the sale of the
Shares including, without limitation, any such costs incurred in connection
with any investigation of the affairs of the Company or the negotiation,
preparation, execution and carrying into effect of this agreement.

 

21.                               THIRD PARTY RIGHTS

 

21.1         Subject to the remaining provisions of this clause 21,
the Company and any other member of the Jump Group and any of their officers,
employees, workers or agents (including advisers) (“Third Parties”) may enforce the terms and accordingly shall
have the benefit of those provisions in this agreement contained in clause 6,
which is, or is stated to be, for their benefit subject to and in accordance
with the provisions of the Contracts (Rights of Third Parties) Act 1999.

 

21.2         For the avoidance of doubt, nothing in this Clause 21
shall have the effect of increasing any of the Sellers’ liability under this
agreement and/or the Transaction Documents.

 

21.3         The parties may by agreement terminate, rescind or
vary the terms of this agreement (including this clause 21) at any time and in
any way without the prior consent of or notice to any Third Party.

 

21.4         Except as provided in this clause 21 the Parties do
not intend that any terms of this agreement shall be enforceable by virtue of
the Contracts (Rights of Third Parties) Act 1999 by any person who is not a
party to this agreement.

 

22.                               CONTINUING EFFECT

 

Each provision of this agreement shall continue in full force and
effect after Completion, except to the extent that a provision has been fully
performed on or before Completion.

 

23.                               SEVERABILITY

 

If any provision of this agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable in any respect under the
law of any jurisdiction, then such provision shall (so far as it is invalid or
unenforceable) be given no effect and shall be deemed not to be included in
this agreement but without invalidating any of the remaining provisions 

 

36

 

of this agreement.  Any provision
of this agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.  The parties shall then
use all reasonable endeavours to replace the invalid or unenforceable
provision(s) by a valid and enforceable substitute provision the effect of
which is as close as possible to the intended effect of the invalid or
unenforceable provision.

 

24.                               LIABILITY AND RELEASE

 

24.1         Several liability of the Sellers

 

Unless otherwise stated in this agreement, the obligations of the
Sellers under this agreement are several. 
If any liability of one or some but not all of the Sellers is, or
becomes, illegal, invalid or unenforceable in any respect, that shall not
affect or impair the liabilities of the other Sellers under this agreement.

 

24.2         Release of Sellers

 

Any liability of the Sellers to any person under this agreement may in
whole or in part be released, compromised or compounded or time or indulgence
given by that person in its absolute discretion as regards any of the Sellers
in respect of such liability without in any way prejudicing or affecting that
person’s rights against any other or others of the Sellers under the same or
like liability, whether joint or several or otherwise, or any other person’s
rights against any of them in any respect.

 

24.3         Release of Purchaser

 

Any liability of the Purchaser to any person under this agreement may
in whole or in part be released, compromised or compounded or time or
indulgence given by that person in its absolute discretion as regards the
Purchaser in respect of such liability without in any way prejudicing or
affecting any other person’s rights to enforce any liability against the
Purchaser.

 

25.                               ASSIGNMENT

 

25.1         Subject to clause 25.2, no party shall be entitled to
assign the benefit or burden of any provision of this agreement without the
prior written consent of each other party.

 

25.2         All or any of the Purchaser’s rights under this
agreement (including, without limitation, in respect of the Warranties) may
(notwithstanding any 

 

37

 

other provisions contained in this agreement) be
assigned or transferred by the Purchaser to, or made the subject of a trust
created in favour of:

 

(a)                                  any other member of Jump Group (or by any
such member to or in favour of any other member of Jump Group) provided that if
such assignee company leaves Jump Group, such rights are assigned or
transferred to or made the subject of a trust in favour of another member of
Jump Group; and/or

 

(b)                                 by succession upon a merger with and into
another member of the Jump Group;

 

provided that such assignment shall not increase to any extent the
liability of any of the Sellers pursuant to any provision of this agreement or
any of the other Transaction Documents and provided further that as between the
Sellers and the Purchaser, the Sellers may nevertheless enforce this agreement
and the Transaction Documents against the Purchaser as if that assignment had
not occurred.

 

26.          CURRENCY CONVERSION AND EURO/SUBSTITUTED LAWFUL
CURRENCY

 

26.1         Rate of exchange

 

For the purpose of converting amounts specified in one currency into
another currency where required, the rate of exchange to be used in converting
amounts specified in one currency into another currency shall be the average
closing mid-point rate for exchanges between those currencies quoted in the
Financial Times (London edition) for the 30 days for which that rate is so
quoted prior to the date of the conversion.

 

26.2         Euro

 

If the United Kingdom becomes a participating member state for the
purposes of European Monetary Union and the Euro accordingly becomes the lawful
currency of the United Kingdom, then:

 

(a)                                  that shall not affect the validity of the
Transaction Documents or the rights and obligations of the parties under them,
nor shall it give any party the right to alter or terminate any Transaction
Document unilaterally; and

 

(b)                                 with effect from the date on which it
occurs, any amount referred to in any Transaction Document in sterling shall be
redenominated in 

 

38

 

 

Euros at the rate and in
the manner determined by the relevant legislation.

 

27.                               SET OFF

 

27.1         Without prejudice to clause 3.5, the Purchaser shall
be entitled but not obliged at any time or times to set off any liability of
the Purchaser to any of Sellers in his or its capacity as Seller and/or
Warrantor (where applicable) (in each case howsoever arising and whether any
such liability is present or future, liquidated or unliquidated and irrespective
of the currency of its denomination) against any liability of any of the Seller
in any such capacity to the Purchaser and may for such purpose convert or
exchange any currency.  Any exercise by
the Purchaser of them of their rights under this clause shall be without
prejudice to any other rights or remedies available to the Purchaser under this
agreement or otherwise.

 

27.2         Each of the Sellers shall be entitled but not obliged
at any time or times to set off any liability of that Seller to the Purchaser in
its capacity as Purchaser (in each case howsoever arising and whether any such
liability is present or future, liquidated or unliquidated and irrespective of
the currency of its denomination) against any liability of the Purchaser in any
capacity to that Seller and may for such purpose convert or exchange any
currency.  Any exercise by that Seller or
any of them of their rights under this clause shall be without prejudice to any
other rights or remedies available to any of the Sellers under this agreement
or otherwise.

 

28.                               GOVERNING LAW AND SUBMISSION TO
JURISDICTION

 

28.1         Governing law

 

The construction, validity and performance of this agreement shall be
governed by the laws of England and Wales.

 

28.2         Submission to jurisdictions

 

The parties to this agreement irrevocably agree that the courts of
England and Wales shall have non-exclusive jurisdiction over any claim or
matter arising under or in connection with this agreement and that accordingly
any proceedings in respect of any such claim or matter may be brought in such
court.

 

The parties have
shown their acceptance of the terms of this agreement by executing it at the
end of the schedules.

 

39

 

29.                               SELLERS’ REPRESENTATIVE

 

29.1         Subject to the provisions of clause 29.3, where any
consent or approval of, or consultation with, the Sellers is required pursuant
to this agreement or where any notice or other communication is required to be
given to the Sellers, the Purchaser shall communicate such request for consent,
approval, consultation or provide such notice to the Sellers’ Representative
(along with copies thereof, if in writing, to the persons stipulated in clause
19.2(a)).

 

29.2         The Sellers’ Representative shall be responsible for
liaising with the rest of the Sellers and communicating any response or
decision of the Sellers to the Purchaser.

 

29.3         Notwithstanding the above, any request for consent
required to be given by the Sellers pursuant to clause 7.2 shall, whilst he is
employed by any member of the Jump Group, be given to Brydon and he shall be
responsible for communicating the Sellers’ consent in respect of any of the
matters referred to in such clause 7.2. 
In the event that Brydon is no longer employed by any member of the Jump
Group, any request for such consent and any response thereto shall be given to
or by, as the case may be, the Sellers’s Representative in accordance with
clause 29.1 and 29.2.

 

40

 

IN
WITNESS of the
above the Parties or their duly authorized representatives have executed this
Agreement on the day and year first before written.

 

 

	
  SIGNED by

  	
   

  	
  )

  	
  /s/ Fred Mendelson
  (Director)

  
	
  CREATIVE
  CAPITAL FUND

  	
   

  	
  )

  	
   

  
	
  GENERAL
  PARTNER LIMITED

  	
   

  	
  )

  	
   

  
	
  As general partner for
  and on behalf of

  	
   

  	
  )

  	
   

  
	
  CREATIVE
  CAPITAL FUND

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
   

  
	
  acting by 

  	
  Robert Evans

  	
   

  	
  )

  	
  /s/ Robert Evans

  
	
  SECRETARY

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  EUAN
  DRUMMOND

  	
   

  	
  )

  	
  /s/ Euan Drummond

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  EWEN
  ROBERTSON

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
   

  	
  )

  	
   

  
	
  STEVE
  MASTERS

  	
   

  	
  )

  	
  /s/ Steve Masters

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DAVID
  GROUNDWATER

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
   

  	
  )

  	
   

  
	
  ANTHONY
  MCCROSSAN

  	
   

  	
  )

  	
  /s/ Anthony McCrossan

  
					

 

41

 

	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  JULIAN
  ASTON

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
  )

  	
   

  
	
  PETER
  GEORGE FARQUHAR DIBBEN

  	
   

  	
  )

  	
   

  
	
  Duly authorised trustee
  for

  	
   

  	
   

  	
   

  
	
  SALCOLM
  PROPERTIES LTD PENSION

  SCHEME

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DAVID
  A DA CUHNA

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  PETER
  C NICHOLSON

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  ANDREW
  C SMITH

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  IAN
  ROBERT HUCK

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DAVID
  BRYDON

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  

 

42

 

	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  PAUL
  THATCHER

  	
   

  	
  )

  	
  /s/ Paul Thatcher

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  ANNE
  BRYDON

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  STEVE
  BAILEY

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  CHARLES
  COLLETT

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DAVID
  MILLER

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DAN
  HOBBS

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  ANDY
  SMITH

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  

 

43

 

	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  NEVILLE
  PRESSLEY

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  DARREN
  WARD

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
   

  	
  )

  	
   

  
	
  SIMON
  ALEXANDER BRYDON

  	
   

  	
  )

  	
  /s/ Simon A. Brydon

  
	
  As Attorney for

  	
   

  	
   

  	
   

  
	
  JOHN
  HANDLEY

  	
   

  	
   

  	
   

  
	
  Acting under power of
  attorney dated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED for and on behalf of

  	
   

  	
  )

  	
   

  
	
  JUMPTV
  INC

  	
   

  	
  )

  	
   

  
	
   

  	
   

  	
  )

  	
   

  
	
  acting by G. SCOTT PATERSON

  	
   

  	
  )

  	
  /s/ G. Scott Paterson

  
	
  Chairman &
  CEO

  	
   

  	
  )

  	
   

  

 

44

 

SCHEDULE
1

 

Details of Company
and Sellers

 

Part 1:  Short Particulars of Company

 

	
  1

  	
   

  	
  Name

  	
   

  	
  Cycling Television Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Registered number:

  	
   

  	
  04887821

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Date of incorporation:

  	
   

  	
  4 September 2003

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Place of incorporation:

  	
   

  	
  United Kingdom

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Registered office address:

  	
   

  	
  34 Warple Way, London,W3 ORG

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Type of company:

  	
   

  	
  Private Limited Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Authorised share capital:

  	
   

  	
   

  
	
   

  	
   

  	
  (a)    amount:

  	
   

  	
  £1,000

  
	
   

  	
   

  	
  (b)    number and class
  of shares:

  	
   

  	
  7,304 A Ordinary Shares of £0.01 each

  92,696 Ordinary Shares of £0.01 each

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Issued share capital:

  	
   

  	
   

  
	
   

  	
   

  	
  (a)    amount:

  	
   

  	
  £219.52

  
	
   

  	
   

  	
  (b)    number and class
  of shares:

  	
   

  	
  4,748 A Ordinary Shares of £0.01 each

  17,204 Ordinary Shares of £0.01 each

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Directors:

  	
   

  	
  Simon Alexander Brydon

  Euan Drummond

  Anthony Hugh McCrossan

  Paul John Hotson Brinton Thatcher

  John Martin Handley

  Julian Aston

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Secretary:

  	
   

  	
  Simon Alexander Brydon

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Accounting reference date:

  	
   

  	
  31 December

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  Auditors:

  	
   

  	
  N/A due to exemption

  

 

45

 

	
  13

  	
   

  	
  Outstanding
  Charges:

  	
   

  	
  Debenture

  Chargee: The Royal Bank Of Scotland Plc

  Date Created: 23 May 2005

  Date Registered: 2 June 2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
   

  	
   

  	
   

  

 

46

 

Part 2:  Sellers

 

47

 

SCHEDULE
2

 

Part 1:  Sellers’ Obligations at Completion

 

At Completion,
the Sellers shall deliver to the Purchaser:

 

1.             duly
executed transfers of all of the Shares into the name of the Purchaser in the
number as set out in column 2 of part 2 of Schedule 1 with the relevant share
certificates (or indemnities in respect thereof in the agreed form);

 

2.             all the statutory and
other books (duly written up to, but not including, Completion) of the Company
and its certificate of incorporation and common seals in its possession;

 

3.             certified copies of
any powers of attorney under which any of the documents referred to in this
schedule is executed or evidence satisfactory to the Purchaser of the authority
of any person signing on behalf of the Sellers;

 

4.             duly executed
irrevocable powers of attorney in the agreed form in respect of the Shares;

 

5.             an unconditional
letter of release from the Company’s bankers evidencing the release and
discharge of all guarantees and indemnities granted by the Company and the
Company;

 

6.             duly executed
releases, in the agreed form, releasing the Company from the charge created by
the Royal Bank of Scotland together with forms 403a duly completed and sworn in
respect of the same;

 

7.             a duly executed
release, in the agreed form, releasing the Company from any liability
whatsoever (whether actual or contingent) which may be owing to the Sellers by
the Company at Completion;

 

8.             letters of
resignation in the agreed form from each of the Directors (other than the
Continuing Director) and the secretary of the Company, such resignations to
take effect from the close of the meeting of the Board referred to in part 2 of
this schedule 2.

 

9.             the Continuing
Directors Service Agreement duly executed by Brydon and the Company which
agreement shall contain non-compete provisions consistent with those set forth
in this agreement;

 

48

 

10.           a copy of a resolution
of the board of directors of the general partner of CCF (certified by a duly
appointed officer as true and correct) authorising the execution of and the
performance by CCF of its obligations under this agreement and each of the
other documents to be executed by each of them;

 

11.           waivers of pre-emption
by each of the Sellers waiving their rights of pre-emption rights as contained
in the articles of association of the Company in relation to the transfer of
the Shares to the Purchaser; and

 

12.           copies of all existing
bank mandates and statements of the balances of any bank accounts in the name
of the Company, as at the close of business on the last Business Day before the
Completion Date, together with a list of all unpresented cheques and uncleared
cheques which upon presentation or clearance would be debited or credited to
those accounts and the relevant cheque books;

 

13.           duly executed Escrow
Agreement in the agreed form appointing the Escrow Agent in respect of the
Escrow Deposit.

 

Part 2: 
Sellers’ Further Obligations at Completion

 

At Completion,
the Sellers, including CCF, shall:

 

1.             pay and CCF shall
procure that all members of the CCF Group shall pay all Shareholder
Indebtedness (if any) then owing by them to the Company, whether due for
payment or not.

 

2.             release the Company from
any Shareholder Guarantees to which it is party.

 

3.             cause the Directors
to hold a meeting of the board of the Company at which the Directors shall pass
resolutions in the agreed form to:

 

3.1           in the case of the
Company only, approve the registration of the Purchaser or its nominees as
members of the Company subject only to the production of duly stamped and
completed transfers in respect of the Shares;

 

3.2           appoint such persons as
the Purchaser may nominate as directors and secretary of the Company; and

 

3.3           do and perform any
other business which may be necessary or desirable to give full and valid
effect to the sale and purchase of the Shares or as the Purchaser may
reasonably require; and

 

49

 

3.4           the Sellers shall
furnish to the Purchaser on Completion duly signed minutes of all necessary
meetings.

 

50

 

Part 3: 
Purchaser’s Obligations at Completion

 

At Completion,
the Purchaser shall:

 

1.             pay the cash elements
of the Initial Consideration by CHAPS to the Sellers’ Solicitors’ account at
Allied Irish Bank (Sort Code: ·,
Account Number: ·,
IBAN: ·).

 

2.             pass such directors
resolutions as are necessary to allot and issue the Initial Consideration
Shares and the Deferred Consideration Shares in accordance with this agreement
and deliver to the Sellers a certified copy of such resolution;

 

3.             deliver to the
Sellers an extract of the resolutions of the board of directors of Purchaser
(certified in each case by a duly appointed officer as true and correct)
authorising the execution of and the performance by the Purchaser of its
obligations under this agreement and each of the other documents to be executed
by it.

 

4.             execute and deliver
the Continuing Director’s Service Agreement.

 

5.             execute and deliver
the Escrow Agreement in the agreed form appointing the Escrow Agent in respect
of the Escrow Deposit;

 

51

 

SCHEDULE 3

 

Warranties

 

Part 1: 
General Warranties

 

1.             INFORMATION

 

Quality of information

 

All
information contained in Part 1 of Schedule 1 (Details of the Company) and
Schedules 8 (Properties) is true and accurate in all material respects.

 

2.             THE WARRANTORS

 

2.1           Power
to contract

 

The Warrantors
have full power and authority to enter into and perform each of the Transaction
Documents to which they are a party and each of such Transaction Documents
constitutes or will, when executed, constitute binding obligations on the
Warrantors in accordance with their terms, subject to any principles of equity
or insolvency law.

 

2.2           Authorisations

 

The Warrantors
have obtained all applicable governmental, statutory, regulatory or other
consents, licences, waivers or exemptions required to empower them to enter
into and to perform their obligations under the Transaction Documents.

 

2.3           Simon
Brydon

 

So far as
Brydon or any of the other Warrantors are aware, Brydon is not suffering from
any medical or other condition or disability nor is he affected by any other
circumstance which would materially impair his ability to perform his duties as
a full time senior executive of the Company.

 

3.             THE COMPANY

 

3.1           Duly
constituted

 

The Company
has been duly incorporated, is duly organised and is validly existing under the
laws of England and Wales.  The Company
has all requisite corporate powers and authority to own its assets and to
conduct the business being carried on by it at Completion.

 

52

 

3.2           Memorandum
and articles

 

The copies of
the memorandum and articles of association of the Company which are attached to
the Disclosure Letter are accurate, complete and up-to-date in all respects and
have attached to them copies of all resolutions and agreements passed prior to
the date of this agreement which are required to be so attached.  The Company has complied with its memorandum
and articles of association in all material respects and none of the
activities, agreements, commitments or rights of the Company is ultra vires or
unauthorised.

 

3.3           Statutory
and other books and records

 

(a)           The register of members
and all other statutory books of the Company have been properly kept and are up
to date and the register of members contains true and accurate records of all
matters required to be dealt with therein.

 

(b)           The Company has not
received any notice of any application or intended application under the
Companies Acts for rectification of the Company’s register.

 

(c)           All annual or other
returns in relation to the Company required to be filed with the Registrar of
Companies have been duly and properly filed.

 

(d)           The Company has
complied with all legal requirements relating to the issue of shares and other
securities.

 

(e)           The Company has
complied with the material requirements of all other statutes, regulations or
laws binding on it as to the keeping of records and filing of documents with
any other agency or authority and the conduct of its business and affairs
generally.

 

3.4           All
charges registered

 

All Security
Interests granted to or by the Company have (if appropriate) been registered in
accordance with CA85 or comply with all necessary formalities as to
registration or otherwise in any foreign jurisdiction.

 

3.5           Original
documents in possession of Company

 

All title
deeds relating to the material assets of the Company and an executed copy of
all material agreements to which the Company is a party 

 

53

 

are in the
possession of the Company or the Company’s professional advisers.

 

3.6           Directors
of the Company

 

The only
directors of the Company are the persons listed as such in the Disclosure
Letter and no person is a shadow director (within the meaning of s741 CA85) or
an alternate or de facto director of the Company.

 

4.             SHARE CAPITAL

 

4.1           Shares
allotted and fully paid

 

All of the
issued shares in the capital of the Company are validly allotted and issued and
fully paid or properly credited as fully paid.

 

4.2           Freedom
from Encumbrances

 

All unissued
shares and any debentures or other securities of the Company are free from and
unaffected by any Encumbrance other than under its articles or under an
agreement between shareholders which has been Disclosed.

 

4.3           No
options, etc.

 

There are in
existence no rights to or options for the issue, allotment or transfer of any
loan or share capital of the Company nor any rights to convert any loan or
share capital into share capital or share capital of a different description.

 

4.4           Repayment,
redemption and capitalisation

 

The Company
has not:

 

(a)           at any time repaid or
redeemed or agreed to repay or redeem any shares of its capital or in any way
effected any reduction of its issued share capital; or

 

(b)           at any time purchased
its own shares.

 

4.5           Commissions

 

Except for the
commission payable to Ardent Advisors disclosed to Purchaser, no person is
entitled to receive from the Company any fee, brokerage or commission in
connection with the Transaction Documents or anything contained in them.

 

54

 

5.             CONNECTED BUSINESS

 

5.1           Interests
in other companies

 

The Company
does not have any subsidiaries or hold any shares or other securities in any
other company, nor has it agreed to acquire any such share or securities.

 

5.2           No
shareholders’ agreement

 

Save as
Disclosed, the Company is not a party to any shareholders’ agreement or similar
arrangement or agreement which purports to regulate, control or otherwise
affect the voting or disposition of its shares.

 

5.3           Relationship
with CCF and other Sellers

 

Details of all
contractual arrangements under which services are provided by any Seller to the
Company (including as to fees payable) are set out in the Disclosure Letter.

 

5.4           Permanent
establishment outside of jurisdiction of incorporation

 

The Company
does not have any permanent establishment from which it conducts business
outside its jurisdiction of incorporation.

 

5.5           Warrantors
not interested in other related businesses

 

Save as
Disclosed, the Warrantors are not at the date hereof either on their own account
or in conjunction with or on behalf of any person, firm or company engaged,
concerned or interested, directly or indirectly, whether as shareholder,
director, partner, agent or otherwise (save as the holder of not more than 1%
of the issued share capital of any company whose shares are quoted on any
public stock exchange where such holding is for investment purposes only) in (i) any
business of a similar nature to or competitive with that carried on by the
Company, or (ii) which has a close trading relationship with the Company.

 

5.6           No
management of other companies

 

The Company
does not take part in or control the management of any other company or
business organisation other than performers, sportspersons, other individuals
with a public profile and any company or business organisation set up in
connection with their services or rights relating to their personalities,
names, services or creative activities.

 

55

 

6.             ACCOUNTING AND
RECORDS

 

6.1           Accounting
records

 

All the
accounts, ledgers and other financial records of the Company required to be
kept by law and Relevant Accounting Standards have to a material degree been
properly and accurately kept and all the material records and books of the
Company are in the possession of the Company or its accountants.

 

6.2           Accounting
reference date

 

Under s224
CA85, the accounting reference date of the Company has been, during the last
five years, the date specified in schedule 1.

 

6.3           The
Last Accounts The Last Accounts:

 

(a)           give a view of the
state of affairs of the Company as at the Last Accounting Date and of its
profits or losses for the Financial Year ended on the Last Accounting Date
which the Directors generally and the Continuing Director individually believe
is true and fair;

 

(b)           make adequate provision
or reserve for all actual liabilities;

 

(c)           make, to the extent
required by Relevant Accounting Standards, appropriate provision or reserve for
(or note in accordance with all Relevant Accounting Standards) all contingent,
unquantified or disputed liabilities, all capital commitments and deferred Tax;

 

(d)           make, to the extent
required by Relevant Accounting Standards, appropriate provision or reserve for
all Tax in respect of all accounting periods ended on or before the Last
Accounting Date for which the Company was then or would at any time thereafter
become liable including (to that extent but otherwise without limitation) Tax:

 

(i)            on or in respect of or
by reference to the profits, gains or income for any period ended on or before
the Last Accounting Date;

 

(ii)           in respect of any event
on or before the Last Accounting Date or provided for in the Last Accounts; and

 

56

 

(iii)          in respect of
distributions declared, made or deemed to be made on or before the Last
Accounting Date or provided for in the Last Accounts; and

 

(e)           have, to the extent
appropriate for a company growing and developing in the manner in which the
Company has grown and developed, been prepared in a manner consistent with that
used in preparing the Accounts for the Financial Year preceding the Financial
Year ended on the Last Accounting Date.

 

6.4           Accounts

 

The Accounts
for each of the three Financial Years ended on the Last Accounting Date:

 

(a)           comply with all the
requirements of CA85, all other relevant laws and all Relevant Accounting
Standards and in all other respects have been prepared in accordance with
generally accepted accounting practices in the United Kingdom;

 

(b)           are not affected by any
extraordinary or exceptional item (as defined under UK GAAP), other than to the
extent items are categorised in those Accounts as extraordinary or exceptional,
or by transactions entered into otherwise than on normal commercial terms; and

 

(c)           were prepared under the
historical cost convention.

 

6.5           Valuation
of fixed assets

 

In the Last
Accounts, each of the fixed assets is included at a value which is net of
depreciation in accordance with the depreciation policy applied in the
preceding three Financial Years.

 

6.6           Bad
debt provisions and write-offs

 

The Last
Accounts contain appropriate provision for bad and doubtful debts.

 

6.7           Management
Accounts

 

(a)           The Management Accounts
were prepared in accordance with the accounting policies of the Company to a
standard of detail appropriate for management accounts of a company of the size
and nature of the Company and in a manner consistent with that 

 

57

 

adopted in the
preparation of its management accounts for all periods ended during the twelve
months prior to the Last Accounting Date.

 

(b)           Having regard to the
level of detail to which the Management Accounts were prepared, they are not
misleading in any material respect and neither materially overstate the value
of the assets nor materially understate the liabilities of the Company as at
the date to which they were drawn up and do not materially overstate the
profits of the Company in respect of the period to which they relate.

 

(c)           All work-in-progress
valued in the Management Accounts was valued on the lower of cost and the
amounts which could in the circumstances existing at 1 January 2007
reasonably be expected to be realised in the normal course of carrying on the
business of the Company.

 

7.             POSITION SINCE
MANAGEMENT ACCOUNTS AND LAST ACCOUNTING DATE

 

Since 1 January 2007:

 

7.1           there has been no
material adverse change in the financial or trading position of the Company and
no event, fact or matter has occurred of which the Warrantors are aware which a
reasonable person would believe to be likely to give rise to any such change,
and there has been no damage, destruction or loss (whether or not covered by
insurance) affecting the same.  For the
purposes of this Warranty, a “material adverse change” shall mean any change
which would adversely affect the balance sheet or gross income of the Company
by at least £10,000 compared to the position which would have obtained if the
change had not taken place; the loss of any opportunity is not to be regarded as
a change for this purpose;

 

7.2           there has been no
interruption or material alteration in the nature, scope or manner of the
business of the Company as a whole which business has been carried on in the
ordinary and usual course of business so as to maintain it as a going concern;

 

7.3           the Company has not
changed the timescales within which it generally pays its creditors and except
as Disclosed no material undisputed amounts are owed by the Company which are
overdue for payment by more than 60 days;

 

58

 

7.4           the Company has not
repaid or become bound or liable to pay any borrowing or indebtedness in
advance of its stated maturity excluding any recoupable advances made to
members of the group under any ordinary course contract (other than financing
or banking type contracts);

 

7.5           the Company has not,
except in the ordinary course of business, acquired, sold, transferred or
otherwise disposed of any material assets of whatsoever nature;

 

7.6           the Company has not cancelled,
waived, released, compromised, assigned or discontinued any material debts or
claims nor cancelled, waived, released, compromised, assigned or discontinued
any material rights other than in the ordinary course of its business;

 

7.7           no contract or
commitment (whether in respect of capital expenditure or otherwise) has been
entered into by the Company which is of an unusual nature and involved or would
be likely to involve an obligation of a material nature or magnitude (a
liability for expenditure in excess of £15,000 being regarded as material for
this purpose);

 

7.8           (except for any
dividends provided for in the Last Accounts) no dividends, bonuses or other
distributions have been declared, paid or made by the Company;

 

7.9           except as Disclosed, no
share or loan capital of the Company has been allotted or issued or agreed to
be allotted or issued nor has any option or right thereover been granted;

 

7.10         except as Disclosed, the
Company has not undergone any capital reorganisation or change in its capital
structure;

 

7.11         except as Disclosed, no
resolution of the members of the Company has been passed (whether in general
meeting or otherwise);

 

7.13         there has been no
material increase or decrease in the levels of debtors or creditors (material
in this case being £15,000 or in the average collection or payment periods for
the debtors and creditors respectively of the Company as a whole outside the
range of levels or periods normally experienced by the Company as a whole;

 

7.14         no fees or other payments
have been made to any member of the CCF Group;

 

7.15         there has been no
material reduction in the cash balances of the company from those set out in
the Management Accounts or any unusual and 

 

59

 

unplanned increase or decrease in the level of work in progress of the
Company;

 

7.16         there have been no
capital injections from or forgiveness of debt by the Sellers or any member of
the CCF Group.

 

8.             FINANCIAL MATTERS

 

In this
Schedule 3, the word “Indebtedness”
means, in respect of any company or other entity, any borrowing or indebtedness
in the nature of borrowing (including any indebtedness for monies borrowed or
raised under any bank or third party guarantee, acceptance credit, bond, note,
bill of exchange or commercial paper, letter of credit, finance lease, hire
purchase agreement, forward sale or purchase agreement or conditional sale
agreement or other transaction having the commercial effect of a borrowing and
all finance, loan and other obligations of a kind required to be included in
the balance sheet of a company or other entity pursuant to Relevant Accounting
Standards);

 

8.1           All dividends lawful

 

All dividends
and distributions declared, made or paid by the Company at any time were, when
declared, made or paid, in accordance with the requirements of general law and
the articles of association of the Company.

 

8.2           Borrowing

 

(a)           Banking and other
facilities

 

Details of and copies of all relevant
documentation relating to the Indebtedness of the Company are contained in the
Disclosure Letter.

 

(b)           Borrowing within limits

 

The aggregate Indebtedness of the Company
does not exceed any maximum stipulated in any debenture, charge or other
document binding on the Company.

 

(c)           No factoring, etc

 

The Company has not factored any debts, or
engaged in any financing arrangements or arrangements having the commercial
effect of borrowing, not shown in the Last Accounts.

 

60

 

8.3           No
liability to affiliates or employees

 

There is no outstanding Indebtedness or
liability (actual or contingent) between the Company and the Sellers or any
member of the CCF Group or between the Company and any directors, officers or
employees of the Company or the Sellers or any member of the CCF Group (save
for accrued salary) or any relatives or controlled companies of any such
persons and no security for any such Indebtedness or liability has been given
and remains outstanding.

 

8.4           Grants

 

No act or transaction has been effected or
agreed to be effected by the Company or the Sellers including the sale of the
Shares in consequence of which:

 

(a)           the Company is or will
be liable to refund or repay the whole or part of any investment or other
grant, subsidy or allowance; or

 

(b)           any such grant, subsidy
or allowance for which application has been made by the Company will not be
paid or will be reduced.

 

8.5           No
guarantees, etc.

 

There is not outstanding any agreement or
arrangement which establishes any guarantee, indemnity, suretyship, form of
comfort or support (whether or not legally binding):

 

(a)           given by the Company in
respect of the obligations or solvency of any person;

 

(b)           given by any person in
respect of the obligations or solvency of the Company; or

 

(c)           given by the Sellers or
any member of CCF Group in respect of any liability of the Company, except as
Disclosed.

 

8.6           Debts
owed to the Company

 

There are no debts owing to the Company other
than trade debts incurred in the ordinary and usual course of business which
trade 

 

61

 

debts do not exceed £125,000 in aggregate for
the Company as a whole.

 

8.7           No
deal bonus or finders fee

 

Except for the
commission payable to Ardent Advisors in the amount previously disclosed to
Purchaser, there is not outstanding any agreement or arrangement, nor has there
been any agreement or arrangement in the nature of a so-called finders fee in
relation to the proposed sale of the Company payable by or on behalf of the
Company or in the nature of a transaction related bonus or payment due to any
director, employee or consultant of the Company in relation to the proposed
sale of the Company.

 

9.             CONTRACTUAL MATTERS

 

9.1           Effect
of executing this agreement

 

So far as the
Warrantors are aware, the execution of and compliance with the terms of this
agreement will not:

 

(a)           result in a breach of
or give rise to any right of termination under the terms of any subsisting
agreement, arrangement or instrument binding on the Company;

 

(b)           cause the Company to
lose the benefit of any material contractual right, licence or privilege;

 

(c)           relieve any person of
any material contractual obligation to the Company or enable any person to
determine such obligation or any material contractual right or benefit enjoyed
by the Company or to exercise any material contractual right otherwise in
respect of the Company; or

 

(d)           result in any material
liability of the Company being created or increased;

 

(e)           prejudicially affect
the attitude or actions of contract counter-parties, clients, customers,
suppliers and employees with regard to the Company, provided that in the case
of this Warranty there is absolutely no obligation on the part of the
Warrantors to make any enquiry as provided for in clause 1.8.

 

62

 

9.2           Significant
counter-parties

 

(a)           Other than as Disclosed
no counter party on any contractual arrangements (including any person
connected in any way with any such party) accounts directly or indirectly
either for more than ten per cent of the annual aggregate turnover or for more
than ten per cent of the annual aggregate expenses of the Company.

 

(b)           No loss of significant
counter-parties

 

No significant counter-party of the Company
(that is to say a contractual counter-party who contributes directly or
indirectly to the Company as a whole income representing more than ten per cent
in value of turnover of the Company as a whole or representing payments by the
Company of more than ten per cent in value of the costs of sale of the Company
as a whole over any given period of 12 consecutive months within the last five
years prior to this agreement) has, during the period of 12 months prior to
this agreement, ceased to trade with or indicated in writing an intention to
cease to trade with, the Company either in whole or in part.  During the period of 12 months prior to the
date of this agreement, the terms of trade of the Company with each significant
counter-party (as defined above) have not significantly changed to the
detriment of the Company.  The Warrantors
are not aware that any cessation or substantial reduction in trade or change in
terms of dealing as described above is likely after Completion.

 

9.3           Stand-alone
business

 

The assets and
rights of the Company as a whole and the facilities and services to which the
Company has a contractual right are all that have been necessary to operate the
businesses of the Company as it has been operated historically and as reflected
in the Accounts for the last Financial Year.

 

9.4           Characteristics
of contracts

 

There is not
outstanding any contract, liability or arrangement to which the Company is a
party or by which it is bound which:

 

(a)           is outside the ordinary
course of business of the Company;

 

(b)           requires expenditure of
in excess of £25,000 per year;

 

(c)           is otherwise than by
way of a bargain at arm’s length;

 

63

 

(d)           is one pursuant to
which the Company has sold or otherwise disposed of any company or business in
circumstances such that it remains subject to any liability (whether contingent
or otherwise) which is not fully provided for in the Last Accounts;

 

(e)           is a currency and/or
interest rate swap agreement, asset swap, future rate or forward rate
agreement, interest cap, collar and/or floor agreement or other exchange or
rate protection transaction or combination thereof or any option with respect
to any such transaction or any other similar transaction to which the Company
is a party;

 

(f)            is a bid, tender,
proposal or offer entered into otherwise than in the ordinary course of
business of the Company which, if accepted, would result in the Company
becoming a party to any agreement or arrangement of a kind described in any of
paragraphs 9.3(a) to 9.3(d) above.

 

9.5           With
respect to each contract to which the Company is a party:

 

(i)            none of the Sellers or
any member of the CCF Group are interested;

 

(ii)           the Company has duly
performed and complied in all respects with each of its material obligations
thereunder;

 

(iii)          there has been no
material delay, negligence or other default on the part of the Company and no
event has occurred which, with the giving of notice or passage of time, would
constitute a material default thereunder;

 

(iv)          so far as the Warrantors
are aware, there are no grounds for rescission, avoidance, repudiation or
termination and the Company has not received any written notice of termination;
and

 

(v)           the Warrantors are not
aware of any of the other parties thereto is in material default or, so far as
the Warrantors are aware, is likely to become in material default thereunder.

 

9.6           Offers
and tenders

 

No offer or
tender issued by the Company and still outstanding is or will be capable of
giving rise to a contract merely by an order or acceptance or 

 

64

 

other action
by another party which would, once accepted, result in the Company being
committed to expenditure of £10,000 or more.

 

9.7           Contracts
- connected persons

 

(a)           Save as Disclosed,
there is not outstanding any material agreement, arrangement or understanding
(whether legally enforceable or not) to which the Company is a party and in
which any current director of the Company or any connected person is
interested, whether directly or indirectly (save for any service or employment
agreement between the Company and any such persons).

 

(b)           Save as Disclosed, the
Company does not depend in any material respect upon the use of assets owned
by, or facilities or services provided by, the Sellers or any member of the CCF
Group, the cessation of which would materially adversely affect the Company or
the replacement of which would require material effort or expenditure by the
Company.

 

(c)           The Company’s profits
or financial position in each of the three financial years ended on the Last Accounting
Date have not been materially affected by any material agreement which is not
entirely of an arm’s length nature.

 

9.8           Partnerships

 

The Company is
not a member of, or party to, any partnership.

 

9.9           Competition
and fair trading

 

(a)           There are no contracts
or obligations, agreements, arrangements or concerted practices involving the
Company and no practices in which the Company is or has been engaged which are
void, illegal, unenforceable, registrable or notifiable under or which
contravene any competition, anti-trust, anti-monopoly or anti-cartel
legislation or regulations in the United Kingdom, nor has the Company received
any written threat or complaint or request for information or investigation in
relation to or in connection with any such legislation or regulations.

 

(b)           The Company is not
subject to any order, judgment, decision or direction given by any court or
governmental or regulatory authority in any jurisdiction other than one
generally affecting the industries in which it operates, nor is it party to any
undertaking or assurance 

 

65

 

given to any
such court or authority, in relation to competition matters which is still in
force.

 

9.10         Vulnerable
antecedent transactions

 

So far as the
Warrantors are aware, the Company has not at any time in the two year period
prior to Completion:

 

(a)           entered into any
transaction at an undervalue (within the meaning of s238 or s339 or s423
Insolvency Act 1986) with any other person;

 

(b)           been given any preference
(within the meaning of s239 or s340 Insolvency Act 1986) by any other person;
or

 

(c)           entered into any other
material transaction which is void or voidable (whether in whole or in part) or
received any benefit or acquired any asset which is or will be liable to be
returned or repaid (whether in whole or in part).

 

9.11         Payments/political
donations

 

No act or
transaction has been effected by or on behalf of the Company involving the
making or authorising of any payment, or the giving of anything of value, to
any government official, political party, party official or candidate for
political office for the purpose of influencing the recipient in his or its
official capacity in order to obtain business, retain business or direct
business to the Company or any other person or firm.

 

10.          ASSETS

 

10.1         Title
to physical assets

 

All of the
material physical assets owned by the Company are the sole, absolute property
of the Company and there is not now outstanding any Encumbrance over the whole
or any part of any material physical assets of the Company and none of the
material physical assets now owned or used by the Company is subject of any
Encumbrance or any hire purchase, leasing, lease, purchase or credit sale
agreement, except as Disclosed.

 

66

 

10.2                         Possession and third party
facilities

 

(a)                                  All
of the material physical assets owned by the Company, or in respect of which
the Company has a right of use, are in the possession or under the control of
the Company.

 

(b)                                 Where
any material physical assets are used but not owned by the Company or any
facilities or services are provided to the Company by any third party, there
has not so far as the Warrantors are aware occurred any event of default or any
other event or circumstance which would entitle any third party to terminate
any agreement or licence in respect of the provision of such facilities or
services (or any event or circumstance which with the giving of notice and/or
the lapse of time and/or a relevant determination would constitute such an event
or circumstance).

 

11.                               LITIGATION

 

11.1                         No litigation

 

The Company is
not engaged, either on its own account or vicariously, in any suit, action,
litigation, arbitration or tribunal proceedings or any governmental
investigations.  In addition so far as
the Warrantors are aware, the Company has not received notice of any such suit,
action, litigation, arbitration or tribunal proceedings or governmental
investigations which are pending or threatened, by or against the Company.

 

12.                               INSOLVENCY
ETC.

 

12.1                         Company not insolvent

 

The Company
has not stopped payment, nor is it insolvent or deemed unable to pay its debts
within the meaning of s123 of the Insolvency Act 1986 other than immaterial
debts being contested by appropriate action.

 

12.2                         No winding up

 

No order has
been made, petition presented or meeting convened for the purpose of
considering a resolution for the winding up of the Company or for the
appointment of any provisional liquidator. 
No petition has been presented for an administration order to be made in
relation to the Company, and no administrator or receiver (including any
administrative receiver) has been appointed in respect of the whole or any part
of any of the property, assets and/or undertaking of the Company.

 

67

 

12.3                         No composition, etc.

 

No composition
in satisfaction of the debts of the Company, or scheme of arrangement of its
affairs, or compromise or arrangement between it and its creditors and/or
members or any class of its creditors and/or members, has been proposed,
sanctioned or approved.

 

12.4                         No distress, etc.

 

No distress,
distraint, charging order, garnishee order, execution or other process has been
levied or applied for in respect of the whole or any part of any of the
property, assets and/or undertaking of the Company.

 

12.5                         No disqualification

 

So far as the
Warrantors are aware, no person who now is, or who at any time within the last
three years was, a director or officer of the Company is, or at any material
time was, subject to any disqualification order under CA85, the Insolvency Act
1986 or the Company Directors Disqualification Act 1986.

 

12.6                           So far
as the Warrantors are aware, no circumstances exist which will give rise to the
occurrence of any events or circumstances described in the preceding paragraphs
12.1 to 12.5.

 

13.                               POWERS
OF ATTORNEY

 

The Company
has given no powers of attorney and no other authority express, implied or
ostensible which is still outstanding or effective to any person to enter into
any contract or commitment to do anything on its behalf other than the
authority of employees and officers to enter into contracts in the ordinary
course of their duties.

 

14.                               REGULATORY
MATTERS

 

14.1                         Licences

 

(a)                                  The
Company has obtained all material licences, permissions, authorisations and
consents required for carrying on its business effectively in the places and in
the manner in which such business is now carried on.

 

(b)                                 The
licences, permissions, authorisations and consents referred to in paragraph 14.1(a) are
in full force and effect, are not subject to any unusual or onerous conditions
which would not ordinarily be 

 

68

 

present in
such licences, permissions, authorisations or consents, and have been complied
with in all material respects.

 

(c)                                  So
far as the Warrantors are aware, the Company has not received any notice that
there are any circumstances currently existing which indicate that any of the
licences, permissions, authorisations or consents referred to in paragraph 14.1(a) will
be suspended, cancelled or revoked or not renewed, in whole or in part, in the
ordinary course of events.

 

(d)                                 This
clause 14.1 shall not refer to any licences, permissions, authorisations or
consents which relate to the Intellectual Property or to the Properties.

 

14.2                         Compliance with laws

 

(a)                                  The
Company has conducted its business and corporate affairs in accordance with its
memorandum and articles of association and in all material respects in
compliance with all applicable laws and regulations (whether of the United
Kingdom or any other jurisdiction).

 

(b)                                 The
Company is not in breach of any order, decree or judgement of any court or any
governmental or regulatory authority (whether of the United Kingdom or any
other jurisdiction).

 

(c)                                  So
far as the Warrantors are aware, neither the Company nor any of its officers,
agents or employees during the course of carrying out duties for the Company
has done or omitted to do any act or thing, the commission or omission of which
is a contravention of any law or regulation (whether of the United Kingdom or
any other jurisdiction).

 

(d)                                 So
far as the Warrantors are aware, no commissions, discounts, rebates or other
inducements, whether of cash or in kind, have been given by the Company or its
officers or employees during the course of carrying out duties for the Company
where the same are capable of forming the basis of criminal prosecution of, or
civil action against, the Company or any of its officers or employees.

 

15.                               INSURANCE

 

15.1                         The
Company has at all times been adequately covered against accident, third party,
public liability and other risks normally covered by insurance and nothing has
been done or omitted to be done by or on behalf of the 

 

69

 

Company which would make any policy of insurance void or voidable or
enable the insurers to avoid the same and there is no material claim
outstanding under any such policy and the Warrantors are not aware of any
circumstances which will give rise to such a claim or (other than generally
applicable market factors) result in a material increase in the rate of any
premium.

 

15.2                         All
information furnished in obtaining or renewing the Insurance Policies was
correct and accurate when given and any change in that information required to
be given was correctly given.  The
Company is not materially in default under any of those policies, which are in
full force and effect.

 

15.3                         There
is set out in the Disclosure Letter a summary of the Insurance Policies.

 

15.4                         The
Company has not suffered any material uninsured losses nor waived any rights of
material or substantial value.

 

Part 2:  Employment Warranties

 

1.                                      INTERPRETATION

 

In this part 2
of schedule 3, the following words and expressions shall have the following
meanings:

 

“Employees”
means those persons employed by the Company;

 

“Employment
Law” means all and any laws, common law, statutes,
directives, regulations, notices, judgments, decrees or orders, whether of the
European Community or the United Kingdom or any other relevant jurisdiction,
relating to or connected with the employment of employees and workers and/or
their health and safety at work;

 

“Employment
Liabilities” means all Losses connected with or
arising from any Employment Law;

 

“Senior
Employee” means any employee whose annual salary
exceeds £50,000.

 

2.                                      TRADE
UNION RECOGNITION

 

The Company
does not recognise any trade union or other body representing its Employees (or
any of them) for the purpose of collective bargaining or other negotiating
purposes, nor has the Company done any 

 

70

 

act which
might be construed as recognition or received a request for recognition of any
such body and, so far as the Warrantors are aware, no such request is pending.

 

3.                                      TRADE
DISPUTES

 

So far as the
Warrantors are aware, no dispute, strike or other industrial action exists or
is threatened between the Company and a significant number or category of its
Employees or a trade union representing such Employees and no such dispute,
strike or other industrial action has occurred in the last 12 months.

 

4.                                      COMPLIANCES
WITH APPLICABLE LAW

 

The Company
has complied with all material obligations imposed on it by Employment Law,
collective agreements, recognition agreements and all material contractual
obligations applying to the jurisdiction in which such entity is incorporated
or carries on business which are owed to or in respect of its Employees.

 

5.                                      INFORMATION

 

5.1                               The
Disclosure Letter contains:

 

(a)                                  the
names and dates of birth and commencement of employment of all persons who are
at the Completion Date Employees of the Company;

 

(b)                                 details
of all the remuneration paid and benefits (including, for the avoidance of
doubt, permanent health insurance) provided to or which the Company is bound to
provide to each of the Employees;

 

(c)                                  copies
of the contracts of Employment of each of the Senior Employees; and

 

(d)                                 details
of the terms on which all individual consultants providing to the Company
personal services which are considered by the Warrantors to be materially
significant in the context of the businesses of the Company are engaged;

 

all of which
information is true and complete in all material respects.

 

5.2                               There
is no person other than those listed in the Disclosure Letter who is employed
in the business of the Company other than the Employees.

 

71

 

5.3                               No
full time Senior Employee is engaged for any material part of his usual working
time in the business of any company outside the Company.

 

6.                                      VARIATION
OF TERMS OF EMPLOYMENT

 

6.1                               The
Company is not involved in negotiations (whether with Employees or any trade
union or other Employees’ representatives) to materially vary the terms and
conditions of employment or engagement of any of its Employees, directors or
consultants, nor has it during the three months up to Completion entered into
any obligation nor made any representations, promises, offers or proposals to
any of its Employees, directors or consultants or to any trade union or other
Employees’ representatives concerning or affecting the terms and conditions of
employment or engagement of any of its Employees, directors or consultants.

 

6.2                                 During
the last three months, the Company has not promised but failed to implement
prior to Completion any salary review in respect of any Employees.

 

7.                                      INCENTIVE
SCHEMES

 

The Company
has not introduced any share incentive scheme, share option scheme or profit
sharing, bonus, commission or other such incentive scheme for any of its
directors or Employees which remains in effect.

 

8.                                      RESIGNATIONS

 

8.1                                 No
Senior Employee or director of the Company has resigned in the last 12 months.

 

8.2                                 The
Company has not received any notice of resignation from any director or Senior
Employee that has not expired.

 

8.3                                 During
the last 6 months, the Company has not dismissed any employees nor is it under
any contractual or other obligation to change the term of service of any Senior
Employee.

 

9.                                      BENEFITS

 

The Company has discharged its obligations in full in relation to
salary, wages, fees, commission, bonuses, overtime pay, holiday pay, sick pay
and all other benefits and emoluments relating to its Employees, directors and
consultants in respect of all prior periods.

 

72

 

10.                               REDUNDANCIES

 

10.1                         The
Company has neither given notice of any redundancies to the Secretary of State
or any other appropriate body in any other jurisdiction nor started
consultations with any independent trade union or Employees’ representatives
within the last 12 months in relation to any of the Company’s Employees.

 

10.2                         The
Company has not adopted, whether informally or formally and whether in writing
or otherwise, any policy or practice of making redundancy payments in excess of
statutory minima nor has it historically made any such redundancy payments.

 

10.3                         The
Company does not have, either formally or informally and whether or not reduced
to writing, any custom or practice of implementing redundancies on a selective
basis in accordance with specific procedures, criteria or formulae.

 

11.                               CLAIMS

 

11.1                         So
far as the Warrantors are aware, no circumstances have arisen or exist under
which the Company will be required to pay damages or compensation, or suffer
any penalty or be required to take corrective action or be subject to any form
of sanction under Employment Law.  The
Company has not received written notice of any current, pending or threatened
claims of any type against the Company by any existing or former Employees or
directors of the Company or by any existing or former consultants to the
Company.

 

11.2                         So
far as the Warrantors are aware no circumstances have arisen under which the
Company is likely to be required to pay damages for wrongful dismissal or breach
of contract, to make any contractual or statutory redundancy payment or make or
pay any compensation in respect of unfair dismissal, to make any other payment
under any Employment law or to reinstate or re-engage any former Employee.

 

12.                               GRIEVANCE
PROCEDURES

 

No Employee
has instituted any internal grievance procedure, corporate information
disclosure procedure or malpractice notification procedure nor has any Senior
Employee been the subject of disciplinary proceedings in the last 12 months by
reason of misconduct or suspected misconduct.

 

73

 

13.                               EFFECT
OF COMPLETION

 

Completion
will not give rise to the payment of any remuneration, payments or benefits
(including severance payments or benefits) or any enhancements or accelerations
thereof to any Employee whether in accordance with the standard terms and
conditions of employment of such Employee or otherwise or entitle any Employee
to terminate his employment without serving his full notice period.

 

14.                               INCENTIVE
SCHEMES

 

The Company
has not introduced any share incentive scheme, share option scheme or profit
sharing, bonus, commission or other such incentive scheme for any of its
directors or Employees which remains in effect.

 

15.                               SIMON
BRYDON

 

For the purposes
of this Warranty, “Statutory Employment Protection Claim” means any claim under
the Employment Rights Act 1996 (as amended), Sex Discrimination Act 1975 (as
amended), Equal Pay Act1970 (as amended), Race Relations Act 1976, Disability
Discrimination Act 1995 (as amended), Transfer of Undertakings (Protection of
Employment) Regulations 1981 (as amended), Working Time Regulations 1998 (as
amended), Employment Relations Act 1999,Art.141 of the EC Treaty, Equal Pay
Directive No 75/117, other EU Directives, Trade Union & Labour
Relations (Consolidation) Act 1992(as amended), National Minimum Wage Act 1998,
Public Interest Disclosure Act 1998, Data Protection Act 1998, Part-Time
Workers(Prevention of Less Favourable) Treatment Regulations 2000, Fixed-Term Employees
(Prevention of Less Favourable Treatment)Regulations 2002, Employment Act 2002,
Employment Equality(Religion or Belief) Regulations 2003 and Employment
Equality (Sexual Orientation) Regulations 2003.

 

15.1                         Brydon
has no claims or rights of action (whether under statute, common law or
otherwise), howsoever arising, (including but not limited to contractual
claims, breach of contract including for breach of his Service Agreement dated
21 April 2006 and amendments thereto, tort and Brydon’s prospective
entitlement to bring any other Statutory Employment Protection Claim which
could be brought in an Employment Tribunal) against the Company, its officers,
employees or shareholders, arising from or connected with the Executive’s
current employment with the Company, the termination thereof or any other
matter concerning the Company.

 

74

 

15.2                         Brydon
has no claims against the Company, its purchasers or successors in title,
concerning his pension entitlement under his Service Agreement dated 21 April 2006
or otherwise, and including any tax liabilities or national insurance
contributions that arise or may have arisen in respect thereof.

 

Part 3:
IP & IT Warranties

 

1.                                      DEFINITIONS

 

In this part 3
of schedule 3, the following words and expression shall have the following
meanings:

 

“Company
Systems” means the computer and data processing
systems and information and communications technologies used in or for the
business of the Company including hardware, Software (whether proprietary or
third party owned), networks, data storage devices, printers, VDU’s, firmware,
dedicated power supplies, cabling, peripherals and associated documentation;

 

“Registered
Intellectual Property” means those Intellectual
Property rights which have been applied for or which are registered with any
national or international registry, (including all renewals, extensions and
applications for registration) and which are owned by the Company; and

 

“Software”
means any and all forms of computer program, including, without limitation,
applications and operating systems and in each case whether in source, object
or machine-readable form.

 

2.                                      INTELLECTUAL
PROPERTY

 

2.1                               General

 

The Company
has no Registered Intellectual Property.

 

2.2                               Intellectual Property

 

(a)                                  The
Company owns or has authority to use all the Intellectual Property it requires
to carry on its business following Completion as such business has been carried
on in the last 2 years.

 

(b)                                 Any
persons who have been commissioned by the Company to create, develop or invent
any Intellectual Property for the Company in connection with any ongoing
projects of the Company to which 

 

75

 

any value is
attributed in the work in progress referred to in the Last Accounts have
entered into a written agreement with the Company which obliges them to assign
such Intellectual Property to the Company.

 

(c)                                The
Company has not reached any agreements with its employees that disapply or
exclude the provisions of any legislation, including but not limited to, the
Patents Act 1977, the Copyright, Designs and Patents Act 1988, the Registered
Designs Act 1949 and the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032), relating to the
Company’s rights as employer, pursuant to such legislation, to the intellectual
property created by its employees.

 

2.3                               Infringement

 

(a)                                  Save
as Disclosed, the Company has not received written notice of any claim by any
third party which alleges that the operations of the Company infringe or misuse
or are likely to infringe or misuse the Intellectual Property of a third party
or which otherwise disputes the right of the Company to use any Intellectual
Property owned or used by it.  So far as
the Warrantors are aware, no third party has served notice on the Company of
any circumstances which are likely to give rise to such a claim.

 

(b)                                 No
claim has been made by the Company which alleges that a third party is
infringing or misusing or is likely to infringe or misuse the Registered
Intellectual Property owned by the Company.

 

(c)                                  As
far as the Warrantors are aware, and save as Disclosed, the operations of the
Company do not infringe or misuse any Intellectual Property.

 

3.                                      CONFIDENTIAL
INFORMATION

 

The Company
has not used any processes and is not engaged in any activities which involve
the misuse of any Confidential Information belonging to any third party, nor so
far as the Warrantors are aware does the Company otherwise have in its
possession or control any such Confidential Information without the licence or
authority or the relevant owner.

 

76

 

4.                                      INFORMATION
TECHNOLOGY

 

4.1                               The
Company Systems are either owned by, or properly licensed or leased to the
Company and there are no circumstances of which the Warrantors are aware in
which the ownership, benefit, or right to use the Company Systems may be lost
solely by virtue of the acquisition of the Shares by the Purchaser.

 

4.2                               The
Company has taken all reasonable steps to ensure that the Software used by the
Company in the carrying on of its business is free of any virus which would
threaten the ability of the Company to operate its normal business activities.

 

4.3                               The
Company Systems are Date Compliant in all material respects.  For the purposes of this paragraph 4.3 “Date
Compliant” means the ability of a computer system and/or related hardware
and/or Software to be unaffected, either in its performance or in its
functionality, by any dates (past, present and future) and in particular (but
without prejudice to the generality of the foregoing):

 

(a)                                  no
value for current date causes or will cause any interruption in operation;

 

(b)                                 date-based
functionality behaves and will behave consistently for all dates;

 

(c)                                  in
all interfaces and data storage, the century in any date is and will be
specified either explicitly or by unambiguous algorithms or inferencing rules;
and

 

5.                                      DATA
PROTECTION

 

5.1                               The
Company has complied with its obligations under the Data Protection Act 1998
and with all material applicable data protection laws, guidelines and industry
standards.

 

5.2                                 No
notice or allegation has been received by the Company from a competent
authority alleging that the Company has not complied with any applicable data
protection laws.

 

5.3                               The
Company has not received any written notice from any individual claiming from
the Company compensation for breaches of applicable data protection laws.

 

77

 

Part 4: 
Pensions Warranties

 

1.                                      DEFINITIONS

 

In this part 4
of schedule 3, the following words and expressions shall have the following
meanings:

 

“Employee”
means any past or present officer or employee of the Company, including any
person who is on secondment overseas; and

 

“Pension
Arrangements” means the Stakeholder Pension Scheme as
set out in the Disclosure Letter.

 

2.                                      DISCLOSURE
OF PENSION ARRANGEMENTS

 

Other than the
Pension Arrangements, there is no scheme, arrangement or agreement to which the
Company is a party o~ by which it is bound or under which it has an obligation
or liability (whether actual, contingent or prospective) to contribute or to
provide funding for the provision of life assurance, retirement, death,
disability or other like benefits (in the form of a pension, lump sum, gratuity
or otherwise) in respect of any Employee.

 

3.                                      INFORMATION
RELATING TO PENSION ARRANGEMENTS

 

Details of all
material documentation which the Company is holding in relation to Pension
Arrangements have been Disclosed.

 

4.                                      CONTRIBUTIONS

 

The Company is
not obliged to make any pension contributions to the Pension Arrangements for
any of its Employees or officers.

 

5.                                      DISPUTES

 

The Company is
not a party to any ombudsman, litigation or arbitration proceedings in respect
of the Pension Arrangements or benefits provided under the Pension Arrangements

 

6.                                      DISCONTINUANCE

 

No plan,
proposal or intention to amend or discontinue (in whole or in part) any of the
Pension Arrangements has been communicated to any Employee.

 

78

 

Part 5: 
Property Warranties

 

1.                                    TITLE

 

1.1                               The
Properties comprise all the land and premises owned or occupied or otherwise
used by the Company and all the estate, interest, right and title whatsoever of
the Company in, under, over or in respect of any land or premises and the
descriptions set out in schedule 9 are correct. 
The Company does not have any other interest in any other land or
buildings other than the Properties and the Company has not entered into any legally
binding agreement for the purchase of any such interest.

 

1.2                               The
documents of title to the Properties are in the possession or under the control
of the Company and such documents are original documents or properly examined
abstracts.

 

2.                                      ENCUMBRANCES

 

2.1                               So
far as the Warrantors are aware, the Properties are free and clear of all
claims, Encumbrances, leases, tenancies, licences or other rights of
occupation, and other agreements affecting the same (other than the lease
referred to in schedule 8) and the Company has exclusive possession of the
whole of the Properties.

 

2.2                               The
Properties are not subject to any outgoings other than business and water
rates, rent, insurance, council tax and service charges and those outgoings
referred to the Company’s lease of the Properties.

 

2.3                               As
far as the Warrantor is aware there are no material covenants restrictions
burdens stipulations wayleaves easements grants conditions terms rights or
licences affecting the Properties listed at Schedule 8 which are of an unusual
or onerous nature or which have a material adverse affect on the use of the
Properties listed at Schedule 8.

 

2.5                               The
Warrantors have not received written notice that any covenants, restrictions,
stipulations, conditions and other terms affecting the Properties and the uses
of the Properties have not been duly observed and performed.

 

2.6                               So
far as the Warrantors are aware, the Company has not received written notice of
any outstanding disputes, notices or complaints which affect the use of any of
the Properties for the purposes for which they are now used and which would
prevent or impede the Company from operating and carrying on the business
currently carried out at each of the Properties.

 

79

 

3.                                      LEASEHOLD
PROPERTIES

 

3.1                               Each
of the Properties is held under the lease details of which are set out in
schedule 8 and no licence or supplementary agreements and concessions have been
entered into or granted in respect of those leases as far as the Warrantors are
aware.

 

3.2                               There
are no outstanding rent reviews.

 

4.                                      CONTINGENT
LIABILITIES

 

4.1                               The
Company has not at any time assigned or otherwise disposed of any property,
leasehold or otherwise, in respect of which it has a continuing liability
(contingent or otherwise) for payment of rent and/or for any other liability.

 

4.2                               The
Company is not the guarantor of or surety for any other party’s liability
(contingent or otherwise) for any obligations under any lease, tenancy,
agreement or any other deed or under any agreement relating to the assignment
of any lease or tenancy.

 

Part 6:  Tax Warranties

 

1.                                      GENERAL

 

1.1                               Provision
or reserve (as appropriate) has been made in the Last Accounts for (i) all
Tax for which the Company is liable or accountable (whether primarily or
otherwise) in respect of all income, profits or gains earned, accrued or
received on or before the Last Accounting Date or in respect of any Event
occurring on or before the Last Accounting Date and (ii) for all deferred
Tax assets and liabilities of the Company in accordance with generally accepted
accounting practice and all Relevant Accounting Standards.

 

1.2                               The
Company has made all instalment payments required by the Corporation Tax
(Instalment Payments) Regulations 1998 and all such instalment payments were
made on the basis of a reasonable estimate of the Company’s total liability for
the relevant accounting period.

 

1.3                               Since
the Last Accounting Date the Company has not incurred any material expenditure
which is not deductible for Tax purposes.

 

80

 

2.                                      COMPLIANCE

 

2.1                               All
information, notices, computations, claims, elections, assessments (including
self-assessments), registrations and returns which ought to have been submitted
have been punctually submitted by or on behalf of the Company to the relevant
Tax Authority and all information, notices, computations claims, assessments
(including self-assessments), registrations and returns submitted are so far as
the Warrantors are aware complete and accurate and, in the case of information,
remain complete and accurate in all material respects, and are not and so far
as the Warrantors are aware nor are likely to be or become the subject of any
dispute.

 

2.2                               The
Company has not been subject to any non-routine audit, investigation, discovery
or access order by any Tax Authority or any non-routine visit by any VAT or
customs authority.

 

2.3                               The
Warrantors are aware of no dispute at the date of this Agreement with any Tax
Authority regarding:

 

(i)                                     the
computation of any gains profits or losses of the Company for the purposes of
Tax;

 

(ii)                                  any
liability or potential liability to Tax (including interest or penalties)
recoverable from the Company; or

 

(iii)                               the
availability to the Company of any relief from Tax.

 

2.4                               The
Company has not been a party to any scheme or arrangement in respect of which
the main purpose or one of the main purposes was the avoidance of a liability
to Tax.

 

2.5                               No
Tax Authority has agreed to operate any special arrangement in relation to the
Company other than an arrangement which is wholly in accordance with a strict
interpretation of the relevant law, published statements of practice or
published extra-statutory concessions of a relevant Tax Authority.

 

2.6                               The
Company has maintained and is in possession of all records required for Tax
purposes and all such records remain true, complete and accurate.  In particular, without limitation, the
Company has sufficient records to enable it to calculate any present or, so far
as possible, future liability for Tax of the Company or its entitlement to any
deduction, relief or repayment of Tax and any claims and elections it has made
relating to Tax.

 

81

 

2.7                               No
Tax has been or may be assessed on or required to be paid by the Company where
the amount in question is the primary liability of another person, and where
such assessment or requirement arises or arose by reason of the failure by any
other person to satisfy a Tax liability.

 

2.8                               No
relief from Tax which has been claimed or given to the Company or which was
taken into account in determining the provision for Tax (or deferred Tax) in
the Accounts has been withdrawn, postponed, restricted or become liable to be
repaid and the Warrantors are not aware of any reason why said relief may be
withdrawn.

 

3.                                      CAPITAL
GAINS

 

3.1                               The
book value in or adopted for the purposes of the Last Accounts as the value of
each of the assets of the Company on the disposal of which a chargeable gain or
allowable loss could arise does not exceed the amount deductible under s38 TCGA
in respect of each such asset.  So far as
the Warrantors are aware, no chargeable gain would (or would but for any
relief, allowance, deduction or credit other than amounts falling to be deducted
under s38 TCGA) arise on the disposal of any asset acquired by the Company
since the Last Accounting Date for a consideration equal to that paid on its
acquisition.

 

3.2                               So
far as the Warrantors are aware, the Company has not disposed of or acquired
any asset to or from any person in circumstances such that ssl7 or 18 TCGA
apply to such disposal or acquisition.

 

3.3                               The
value of the consideration for the acquisition of any asset included in the
Last Accounts or acquired after the Last Accounting Date is not deemed for Tax
purposes to have been reduced by reason of any claim made to defer Tax whether
in relation to that or any other asset.

 

4.                                      INTERNATIONAL

 

4.1                               The
Company is and always has been resident for all Tax purposes only in the
jurisdiction in which it was incorporated and has never been regarded as being
resident for Tax purposes in a jurisdiction outside its country of
incorporation.

 

4.2                               The
Company is not liable to, and has at no time incurred any liability to Tax in
any jurisdiction other than the jurisdiction in which it was incorporated.  So far as the Warrantors are aware, the
Company has never had a permanent establishment in any jurisdiction other than
in the jurisdiction in which it was incorporated.

 

82

 

4.3                               The
Company has not, without the prior consent of HM Treasury, caused or permitted
any such body corporate as is referred to in Section 765 Taxes Act 1988 to
enter into any transaction specified therein, nor has it entered into a
transaction of the type referred to in Section 765A Taxes Act 1988 without
fully complying with the information reporting requirements prescribed therein.

 

5.                                      TRANSFER
PRICING

 

No Company has
paid any amount for goods, services, or business or financial facilities which
amount has been disallowed or so far as the Warrantors are aware will be
disallowed by any relevant Tax Authority under relevant transfer pricing
legislation nor has any Company received any amount for goods, services or
business or financial facilities which amount has been increased or so far as
the Warrantors are aware will be increased under relevant transfer pricing
legislation.

 

6.                                      GROUPS
OF COMPANIES

 

The Company
has not been a member of any group for any tax purposes.

 

7.                                      VALUE
ADDED TAX

 

7.1                               The
Company is a taxable person duly registered for the purposes of VAT and has
complied in all material respects with all statutory provisions, rules,
regulations, orders and directives in respect of VAT, has promptly submitted
accurate returns and maintains full and accurate VAT records and has not
suffered any liability to any interest, forfeiture, surcharge or penalty.  VAT has been duly paid or provision has been
made in the Accounts for all amounts of VAT for which the Company is liable.

 

7.2                               The
Company has not made an election to waive exemption under paragraph 2 Schedule
10 VATA (Election to waive exemption) and no notice has been received by the
Company and the Company is not aware of anything which indicates that the grant
to the Company of any interest in, right over or licence to occupy land is or
may not be an exempt supply for VAT purposes.

 

7.3                               The
Company has no capital items to which Part XV VAT Regulations (Adjustments
to the deduction of input tax on capital items) applies.

 

8.                                      CLOSE
COMPANIES

 

8.1                               The
Company is not, nor has it ever been, a close investment holding company for
the purposes of Section 13A ICTA.

 

83

 

8.2                               The
Company is not, nor has it ever been liable to make a payment to any Tax
Authority under the provisions of Sections 418 to 422 Taxes Act.

 

8.3                               The
Company has never made any transfer of the kind described in Section 125
TCGA, nor has it made a transfer of value of any kind (whether under s94(1) Inheritance
Taxes Act 1984 or otherwise).

 

9.                                      INHERITANCE
TAX AND GIFTS

 

9.1                               The
Warrantors are not aware of any circumstances whereby any such power as is
mentioned in s212 Inheritance Tax Act 1984 could be exercised in relation to
any shares in, securities of or assets of the Company.

 

9.2                               Neither
the assets owned by nor the shares of the Company are subject to an outstanding
Inland Revenue charge as defined in s237 Inheritance Tax Act 1984.

 

10.                               INTANGIBLES

 

10.1                         There
are no assets held by the Company in respect of which it has brought into
account, or will before Completion be entitled to bring into account, any
debits under Schedule 29 FA 2002.

 

11.                               TRANSFER
TAXES

 

11.1                        There
is no instrument which is necessary to establish the Company’s right or title
to any asset which is or may become liable to stamp duty (or any like duty or
tax in a jurisdiction outside the United Kingdom) which has not been duly
stamped or which would attract stamp duty, interest or penalties if brought
within the relevant jurisdiction.

 

11.2                        Any
stamp, stamp duty land, documentary, securities or other transfer Taxes which
any Company is required to pay have been duly paid.

 

11.3                        The
Company has not:

 

(a)                                  entered
into a contract to purchase any land or an agreement to take a lease of any
land which in either case has not been completed by a conveyance or the grant
of a lease; or

 

(b)                                 entered
into a land transaction where there will or may be an obligation in the future
to make a further land transaction return; or

 

(c)                                  applied
to defer payment of stamp duty land tax under section 90 Finance Act 2003.

 

84

 

12.                               EMPLOYEES

 

12.1                         All
income tax deductible and payable in respect of employee Tax has, so far as it
is required to be deducted, been deducted from all payments made or treated as
made by the Company and all amounts so due to be paid to the relevant Tax
Authority prior to Completion have been so paid, including all Tax chargeable
on benefits provided for directors, employees or former employees of the
Company or any persons required to be treated as such.

 

12.2                         Any
expenditure that has been incurred or that has been agreed to be incurred by
the Company in remunerating employees, officers, ex-employees and ex-officers
of the Company, including any salaries, bonuses, emoluments and any gratuitous payments
paid to such persons, is or will, so far as the Warrantors are aware, be
deductible for Tax purposes.

 

12.3                         All
deductions and payments required to be made under any Tax legislation in
respect of national insurance and social security contributions (including
employer’s contributions) have been so made.

 

12.4                         All
payments by the Company to any person which are required to have been made
under deduction of Tax have been so made and the Company (if required by law to
do so) has accounted to the Tax Authority for the Tax so deducted.

 

12.5                         The
Company has not been granted any dispensations by any Tax Authority relating to
the taxation of its employees or the reporting of benefits provided to such
employees.

 

12.6                         Proper
records have been maintained in respect of all such deductions and payments in
accordance with all applicable Tax legislation.

 

12.7                         The
Company has never issued Enterprise Management Incentive options.

 

12.8                         So
far as the Warrantors are aware, the return of benefits forms reporting benefits
provided for directors, employees or former employees of the Company have been
correctly reported to the Inland Revenue.

 

12.9                         The
Company will not be liable after Completion to pay national insurance
contributions or account for income tax or national insurance under the PAYE
system in respect of, or in consequence of any event (including the sale of the
Shares) occurring in relation to, any shares, securities, options or interests
in the Company.

 

85

 

12.11                   No
security (within the meaning of s254(1) ICTA (Company distributions, tax
credits etc: interpretation)) of the Company has been issued in such
circumstances or on such terms (as amended from time to time) or is or has at
any time been held by such a person that (a) the interest (or any other
amount) paid or payable on it has fallen or when paid will fall to be treated
as a distribution under s209 ICTA (Meaning of “distribution”) or (b) the
debt represented by the security has fallen or falls to be treated as other
than a normal commercial loan (within the meaning of Schedule 18 paragraph 1(5) ICTA
(Group relief: equity holders and profits or assets available for
distribution)).

 

12.12                   The
Company has not been engaged in, or been a party to, any of the transactions
set out in ss213 to 218 ICTA (Demergers) or has made or received a chargeable
payment as defined in s214 (Chargeable payments connected with exempt
distributions).

 

13.                               CAPITAL
ALLOWANCES

 

13.1                         All
capital expenditure on the provision of machinery or plant in respect of which
the Company has claimed writing-down allowances under Chapter 5 part 2 CAA
(Writing-down allowances and balancing adjustments) has qualified for such
allowances and all claims for such allowances have been validly made and
allowed.

 

13.2                         The
value attributed in the Accounts to each asset, or the aggregates of the values
attributed to the assets in each pool of assets in respect of which separate
computations for capital allowances are required to be made or, as a result of
any election, are made, is such that on a disposal of each such asset or pool
of assets on the Accounts Date for a consideration equal to such a value or
aggregate value no balancing charge would arise.

 

13.3                         The
Company has not claimed nor is it entitled to claim under section 253 TCGA
(Relief for loans to traders) or section 254 TCGA (Relief for debts on
qualifying corporate bonds) that an allowable loss has accrued in respect of a
loan made by it.

 

13.4                         The
Company has not made a claim under section 24(2) TCGA (Disposals where
assets lost or destroyed, or become of negligible value), nor has it exercised
an option to pay tax by instalments under section 280 TCGA (Consideration
payable by instalments).

 

86

 

13.5                        No capital expenditure incurred
or agreed to be incurred by the Company:

 

(a)                                has
been deemed under s5 CAA (When capital expenditure is incurred) to have been,
or may be deemed under that section to be, incurred on a date other than that
upon which the obligation to pay the expenditure became or becomes
unconditional; or

 

(b)                               is
expenditure to which Chapter 10 Part 2 CAA (Long life assets) applies; or

 

(c)                                has
been or is to be met directly or indirectly (whether by subsidy, grant,
contribution or otherwise) by a third party such that the expenditure may not
be regarded as incurred by the Company for any of the purposes of CM.

 

13.6                        The
Company has not incurred or agreed to incur capital expenditure or entered into
a contract or assigned the benefit of a contract in circumstances such that ss
214 to 218 (Restrictions on Allowances) CAA has applied or could apply.

 

13.7                        The
Company is not nor has it been entitled to claim any capital allowances under Part 3
CAA (Industrial buildings allowances).

 

14.                               INDEMNITIES

 

14.1                        The
Company has not given any warranty, indemnity or covenant to any other person
in relation to Tax under which it is or might be required to made a payment.

 

87

 

SCHEDULE
4

 

Remaining
Sellers’ Warranties

 

1.1                               Power to contract

 

Each of the
Remaining Sellers has the full power and authority to enter into and perform
each of the Transaction Documents to which it is a party and each of the
Transaction Documents constitutes or will, when executed, constitute binding
obligations on him/her/it in accordance with their terms, subject to any
principles of equity or insolvency law.

 

1.2                               Authorisations

 

Each of the
Remaining Sellers has obtained all applicable governmental, statutory,
regulatory or other consents, licences, waivers or exemptions required to
empower it to enter into and to perform its obligations under the Transaction
Documents.

 

1.3                               Title to Shares

 

Each of the
Remaining Sellers is the sole legal and beneficial owner of the number of
Shares set out against his/her/its name in part 2 of schedule 1 which are free
from and unaffected by any Encumbrance other than under the Articles of the
Company.

 

88

 

SCHEDULE
5

 

Limitations
on the liability of the Warrantors under the Warranties and Tax Indemnity

 

1.                                      SCOPE

 

1.1                                 Save
as otherwise expressly provided in this schedule, the provisions of this
schedule shall operate to limit the liability of the Warrantors in respect of
any claim under the Warranties or Tax Indemnity (including, for the avoidance
of doubt, part 6 of schedule 3) and references in this Schedule 5 to “Claim”
and “Claims” shall be construed accordingly and any reference to “Warranties”
shall be deemed to include the Tax Indemnity.

 

1.2                                 All
of the limitations on the liability of the Warrantors contained in this
schedule are subject to paragraph 12 of this Schedule 5.

 

2.                                      LIMITATIONS
OF QUANTUM

 

2.1                                 Each
Warrantor shall only be liable for a pro rata portion of any Claim (being the
percentage of Shares held by such Warrantor in relation to the aggregate number
of Shares held by all the Warrantors) and the maximum aggregate liability of
each Warrantor in respect of all Claims shall not exceed the following amounts:

 

(a)           ·              $1,218,000

(b)           ·              $980,000

(c)           ·              $210,000

(d)           ·              $187,600

(e)           ·              $204,400

 

2.2                                 The
Warrantors shall only be liable in respect of any claim brought by the
Purchaser for breach of any of the Warranties if the aggregate amount of all
claims brought by the Purchaser exceeds a total of £50,000 but once this
minimum is exceeded, the Warrantors shall be liable for the full aggregated
amount of the Claims and not just the excess, but subject always to the other
limitations contained in this schedule 5.

 

2.2                                 The
Warrantors shall not be liable for any damages or other amounts in respect of
any Claim or Claims under any of the Warranties unless the amount of an
individual Claim, or a series of related claims to such Claim and arising from
the same set of circumstances, exceeds £5,000. 
For these purposes, where a Claim relates to more than one event,
circumstance, act or omission which event, circumstance, act or omission, would
separately constitute a breach of or give rise to a Claim for breach 

 

89

 

of any of the Warranties such Claim shall be treated as a separate
Claim in respect of each such event, circumstance, act or omission.

 

3.                                      TIME
LIMITS

 

3.1                                 The
Warrantors shall be under no liability in respect of any claim unless notice of
such claim giving reasonable details of the relevant facts, matters or
circumstances giving rise to the claim (including an estimate of the amount of
such claim if practicable and without prejudice to any claim the Purchaser
might actually make) shall have been served upon the Warrantors by the
Purchaser within 30 Business Days of the Purchaser becoming aware that such
facts, matters or circumstances may give rise to a claim and:

 

(a)                                  in
the case of a claim under the Warranties (other than the Warranties set out in
part 6 of schedule 3 (relating to Tax)) by no later than the eighteen month
anniversary of the Effective Date; and

 

(b)                                 in
the case of a claim under the Warranties set out in part 6 of schedule 3
(relating to Tax) or a claim under Clause 8.8 by no later than the seventh
anniversary of the Effective Date.

 

3.2                                 Any
claim notified in accordance with Paragraph 3.1 of this Schedule and not
satisfied, settled or withdrawn shall be unenforceable against the Warrantors
on the expiry of the period of 6 months starting on the date of notification of
the claim unless proceedings in respect of such claim have been issued and
served on the Warrantors in accordance with the terms of this agreement.

 

4.                                      GENERAL

 

4.1                                 The
Purchaser shall not be entitled to make any claim in respect of any facts,
matters or circumstances if such facts, matters or circumstances have been
Disclosed in this agreement and/or any of the other Transaction Documents, the
Disclosure Letter or the Disclosure Bundle.

 

4.2                                 The
Warrantors shall not be liable

 

(a)                                  in
respect of any claim:

 

(i)                                     if
and to the extent that such claim arises directly or indirectly from any
voluntary act, transaction or arrangement, entered into after Completion by the
Purchaser, the Company or any of their respective directors, officers,
employees or agents (other than a voluntary act, transaction or arrangement 

 

90

 

carried out by
Brydon without the authority of the relevant Company), save where such act,
transaction or arrangement was pursuant to a legally binding obligation entered
into by the Company on or before Completion;

 

(ii)                                  if
and to the extent that the claim arises directly or indirectly from any act,
transaction or arrangement, in each case which is outside the ordinary course
of business of the relevant company at that time, authorised by or carried out
at the request of the Sellers;

 

(iii)                               to
the extent that the Purchaser or the Company has recovered any loss or damage
suffered by arising out of such breach or claim from any third party, including
under the terms of any insurance policy of the Purchaser or the Company (net of
any costs of such recovery, including any increased premium payable as a result
of such recovery);

 

(iv)                              to
the extent that proper allowance, provision or reserve in respect of the
subject-matter of the Claim has been made in the Last Accounts or the
Management Accounts;

 

(v)                                 any
contingency or other matter provided for in the Last Accounts or Management
Accounts has been over-provided for;

 

(vi)                              the
Claim would not have arisen but for a change of accounting policy or practice
of the Company after Completion.

 

5.                                      CONDUCT
OF CLAIMS

 

5.1                                 Subject
to any obligations that the Purchaser may have under any applicable policy of
insurance, if the Purchaser becomes aware that any claim has been made against
the Company by a third party after Completion which is likely to result in the
Purchaser being entitled to make a claim against the Warrantors by virtue of a breach
of any Warranty the Purchaser shall, and shall procure that the Company shall:

 

(a)                                  give
notice of such claim to the Warrantors as soon as reasonably practicable, but
not later than 10 Business Days after becoming aware of such Claim, specifying
in reasonable detail to the extent then available, the nature of the potential
liability and so far as practicable, the likely amount of such third party
claim;

 

91

 

(b)                                 not
make any admission of liability, agreement or compromise with any person, body
or authority in relation thereto without, where practicable, having first
notified the Warrantors of its intention to do so;

 

(c)                                  take
such action as the Warrantors shall reasonably request to avoid, dispute,
resist, compromise, defend or mitigate any such claim (other than any claim the
avoidance, dispute, resistance, compromise, defence or mitigation of which
would be likely to materially adversely affect the goodwill of the business of
the relevant member of the Jump Group or any claim which seeks or in respect of
which there has been granted injunctive relief) (and subject to the Company
being entitled to employ its own legal advisers and being indemnified to its
reasonable satisfaction by the Warrantors against all Losses incurred in
connection with such claim) provided that the Warrantors shall jointly and
severally indemnify and hold harmless all members of the Jump Group against all
Losses incurred by any of them arising from any action taken by any member of the
Jump Group at the request of the Warrantors pursuant to this paragraph 5; and

 

(d)                                 consult
as fully as is reasonably practicable with the Warrantors as regards the
conduct of any proceedings arising out of such claim and keep the Warrantors
reasonably informed of the progress of such third party claim.

 

5.2                                 Notwithstanding
the preceding provisions of this Schedule, if at any time any of the Warrantors
pay the Purchaser an amount in respect of any claim and the Purchaser and/or
the Company subsequently becomes entitled to recover from any third party any
sum in respect of the facts, matters or circumstances giving rise to the claim
then the Purchaser shall or shall procure that the Company shall take all
necessary steps to enforce such recovery unless to do so would, in the opinion
of the Purchaser (acting reasonably) be to the material detriment of the
Company or any member of the Jump Group. 
If the Purchaser and/or the Company shall at any time recover any sum
from a third party which is referable to the facts, matters or circumstances
giving rise to any claim in respect of which any of the Warrantors have paid
any sum to the Purchaser then provided that there are no outstanding claims or
disputes between the Purchaser or either of them and the Warrantors or either
of them (or, if there are any such disputes or claims, following the final
adjudication or settlement of them):

 

92

 

(a)                                  if
the amount paid by the Warrantors in respect of the claim is more than the Sum
Recovered, the Purchaser shall immediately pay to the Warrantors the Sum
Recovered; and

 

(b)                                 if
the amount paid by the Warrantors in respect of the claim is less than or equal
to the Sum Recovered, the Purchaser shall immediately pay to the Warrantors an
amount equal to the amount paid by the Warrantors;

 

For the
purpose of this Clause “Sum Recovered”
means an amount equal to the total of the amount recovered from the relevant
third party plus any repayment, supplement or interest in respect of the amount
recovered from the person under Section 825 or 826 of ICTA less any tax
computed by reference to the amount recovered from the person payable by the
Purchaser or the Warrantors in recovering the amount from the third party and
all costs payable by the Purchaser and/or the Company in making any such
recovery.

 

6.                                      CHANGE
IN LEGISLATION

 

No liability
shall attach to any of the Warrantors in respect of any claim to the extent
that such claim would not have arisen (or the amount of the claim would not
have been increased) but for a change in legislation made after the Effective
Date or a change in the stated practice of any Tax Authority, a change in
relevant Accounting Standards, a change in the interpretation of the law after
the Effective Date (whether or not such change purports to be effective
retrospectively in whole or in part) or if such claim would not have arisen (or
the amount of the claim would not have been increased) but for any judgement
delivered after the Effective Date.

 

7.                                      CONTINGENT
AND UNQUANTIFIABLE LIABILITIES

 

No liability
shall attach to any of the Warrantors in respect of any claim to the extent
that the claim is based upon a liability which is contingent only or is
otherwise not capable of being quantified unless and until such liability
ceases to be contingent and becomes an actual liability or becomes capable of
being quantified, as the case may be, provided that this paragraph shall not
operate to avoid a claim made in respect of a contingent or unquantifiable
liability within the applicable time limits specified in paragraph 3 of this
schedule if the notice of such claim has been served before the expiry of the
relevant period (even if such liability does not become an actual or
quantifiable liability, as the case may be, until after the expiry of such
period).

 

93

 

8.                                      PAYMENT
OF CLAIM TO BE IN REDUCTION OF CONSIDERATION

 

If any of the
Warrantors pay any sum to the Purchaser pursuant to a claim, that part of the
Consideration received by such Warrantor for the sale of its Shares shall be
deemed to be reduced by the amount of such payment.

 

9.                                      WAIVER

 

Purchaser
irrevocably and unconditionally waives any right it may have to rescind this
agreement.

 

10.                               SURVIVAL
OF THESE PROVISIONS

 

The provisions
of this schedule 5 apply notwithstanding any other provision of this agreement
and will not be discharged or cease to have effect in consequence of any
termination of any other provisions of this agreement.

 

11.                               MITIGATION
NOT AFFECTED

 

Nothing in
this agreement shall affect the application of the common law rules on
mitigation in respect of any claim or any matter giving rise to a claim.

 

12.                               FRAUD

 

None of the
limitations on the liability of the Warrantors set out in this schedule
(whether as to the quantum of the claim, the time limit for notification of the
claim, the procedures or requirements for making a claim or otherwise) shall
apply to any claim against a Warrantor, including CCF, to the extent that the
liability of any of that Warrantor in respect of that claim arises from fraud,
wilful default, concealment, dishonesty or deliberate non-disclosure on the
part of any of that Warrantor.

 

13.                               NO
DOUBLE RECOVERY

 

The Warrantors
shall not be liable for a breach of any Warranty to the extent that any damage,
liability or loss suffered or incurred by the Purchaser or the Company as a
result of such breach has been recovered under the Tax Indemnity given at
clause 8.8 or under any other Warranty.

 

94

 

SCHEDULE
6

 

Purchaser’s
Warranties

 

1.                                      DEFINITIONS

 

In this
schedule 6, the following words and expressions shall have the following
meanings:

 

“GAAP”
means Canadian generally accepted accounting principles;

 

“Jump
Subsidiaries” means members of the Jump Group (but
excluding for all purposes of this schedule the Company;

 

“Jump
Shares” means the Initial Consideration Shares and the
Deferred Consideration Shares (if any);

 

“Person”
means any individual, partnership, limited liability company, corporation, joint
venture, association, trust, unincorporated organization, government or agency
or political subdivision thereof or any other entity of whatever nature;

 

“Purchaser
Sedar Documents” means each of (i) the
Consolidated Financial Statements of the Purchaser, for the 3 month period
ended March 31, 2007 (filed on May 15, 2007), (ii) Audited
Annual Consolidated Financial Statements for the year-ended December 31,
2007 (filed March 30, 2007), (iii) Annual Information Statement of
the Purchaser dated March 22, 2007 (filed March 30, 2007) and
(iv)Annual Report for the year-ended December 31, 2007 (filed April 19,
2007), each of which is available at www.sedar.com.

 

2.                                      ORGANIZATION,
GOOD STANDING AND QUALIFICATION

 

Purchaser is a
corporation duly incorporated, validly existing and is in good standing under
the laws of the jurisdiction of its incorporation, and has all requisite
corporate power and authority to own its properties and to carry on its
business as now conducted and as currently proposed to be conducted after
giving effect to the consummation of the transactions contemplated by this
agreement.

 

3.                                      AUTHORISATION

 

Purchaser has
all requisite power and authority to execute and deliver this Agreement and the
other Transaction Documents to which it is a party and to carry out and perform
its obligations under this Agreement and the 

 

95

 

Transaction
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby.  The
execution and delivery of and the performance under this Agreement and the
Transaction Documents to which they are a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorised by all necessary corporate action and any required stockholder
action on the part of Purchaser.  This
Agreement and the Transaction Documents to which they are a party have been
duly executed and delivered by the Purchaser and are legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their respective terms, except as limited by (i) status of
limitation, lapse of time, bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting the
rights of creditors generally or by general principles of equity and (ii) laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies.  The Initial
Consideration Shares and the Deferred Consideration Shares, when issued in
compliance with the provisions of this Agreement, will be duly authorised,
validly issued, fully paid and nonassessable and in compliance with all
relevant securities laws and stock exchange rules.  The Initial Consideration Shares and the
Deferred Consideration Shares will be free of any Encumbrances, charges or
liens other than those created by or imposed upon the holders thereof through
no action of the Purchaser, and the Initial Consideration Shares and the
Deferred Consideration Shares will be free of restrictions on transfer, other
than the restrictions on transfer under the Transaction Documents and pursuant
to applicable securities laws.

 

4.                                      ABSENCE
OF DEFAULTS AND CONFLICTS

 

The Purchaser
and the Jump Subsidiaries are not in violation of their respective articles of
incorporation, memorandum of association, certificate of formation, bylaws,
operating agreement or other organizational documents or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, agreement, lien, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by which
it is bound, or to which either of the property or assets of Purchaser or any
of the Jump Subsidiaries is subject (collectively, the “Agreements and Instruments”), except where
the violation could not reasonably be expected to have a material adverse
effect; and the execution and delivery of and performance under this Agreement,
the Transaction Documents and any other Agreements and Instruments, and the
consummation of the transactions contemplated herein or therein (including
without limitation the issuance of the Initial Consideration Shares and the
Deferred 

 

96

 

Consideration
Shares) and compliance by the Purchaser and the Jump Subsidiaries with their
respective obligations hereunder and thereunder, do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of or a default under, or result in the creation or
imposition of any Encumbrance upon any property or assets of the Purchaser or
any Jump Subsidiary pursuant to such Agreements and Instruments, nor will such
actions result in any violation of or require any notice, consent or waiver or
trigger any change of control provisions of the articles of incorporation or
formation, bylaws, operating agreement or other organizational documents of
Purchaser or any Jump Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any court or governmental
authority having jurisdiction over Purchaser, any Jump Subsidiary or any of
their respective assets or properties.

 

5.                                      ABSENCE
OF PROCEEDINGS

 

There is no action,
suit or proceeding, claim, arbitration or investigation before or by any court,
arbitrator, arbitrational body or governmental authority, pending or so far as
the Purchaser Warrantors are aware, threatened in writing, against Purchaser or
any of the Jump Subsidiaries, or affecting any of the properties or assets of
Purchaser or the Jump Subsidiaries which individually or in the aggregate would
have a material adverse effect or relating to the transactions contemplated by
this Agreement or the other Transaction Documents.  So far as Purchaser is aware, there is no
action pending or threatened in writing against any of its officers, directors
or employees in connection with such officer’s, director’s or employee’s
relationship with, or actions taken on behalf of the Purchaser.  None of Purchaser, the Jump Subsidiaries or
any of their respective assets or properties is subject to the provisions of
any order, writ, injunction, judgment, ruling, decision or decree of any court,
arbitrator, arbitrational body or governmental body which would reasonably be
expected to have a material adverse effect.

 

6.                                      CONSENTS

 

No
governmental approval, consent or authorization or other approval, consent or
authorization is required on the part of Purchaser or any of the Jump
Subsidiaries in connection with the execution, delivery or performance of this
Agreement or the other Transaction Documents to which they are a party and the
transactions to be consummated hereby and thereby, other than filings required
to be made after the Completion under applicable securities laws (which filings
will be made by the Purchaser in accordance with such laws).

 

97

 

7.                                      PUBLIC
FILINGS

 

The Purchaser
represents and warrants to Sellers that:

 

(a)                                  As
of their respective filing dates, none of the Purchaser Sedar Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

(b)                                 The
consolidated financial statements of the Purchaser included in the Purchaser
Sedar Documents have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except (i) with respect to
financial statements included in Company Sedar Documents filed as of the date
of this Agreement, as may be indicated in the notes thereto or (ii) as
permitted by applicable regulations) and fairly present in all material respects
the consolidated financial position of the Purchaser and the consolidated Jump
Subsidiaries as of the dates thereof and the consolidated results of their
operations and changes in shareholders’ equity and cash flows of such companies
as of the dates and for the periods shown.

 

(c)                                  Neither
the Purchaser nor any Jump Subsidiaries has any liabilities (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected or
reserved against on a consolidated balance sheet of the Purchaser prepared in
accordance with GAAP or the notes thereto, except liabilities (i) reflected
or reserved against on the balance sheet of the Purchaser and the consolidated
Jump Subsidiaries as of March 31, 2007 (the “Balance Sheet Date”)
(including the notes thereto) included in the Purchaser Sedar Documents, (ii) incurred
after the Balance Sheet Date in the ordinary course of business, (iii) as
contemplated by this agreement or otherwise in connection with the Transactions
or (iv) as would not individually or in the aggregate be reasonably be
expected to have a material adverse effect on the business, properties or
prospects of the Jump Group taken as a whole.

 

8                                         PURCHASER’S
AWARENESS

 

As at the date
of this Agreement, the Purchaser is not actually aware (excluding, for the
avoidance of doubt, any imputed or constructive knowledge) of any fact, matter
or circumstances causing any of the Warranties to be breached other than as
disclosed in the Disclosure Letter; provided that the actual awareness of the
Purchaser for the 

 

98

 

purposes of
this paragraph shall mean the actual awareness (excluding, for the avoidance of
doubt, any imputed or constructive knowledge) only of ·, · and ·.

 

99

 

SCHEDULE
7

 

Limitations
on the liability of the Purchaser under the Purchaser’s Warranties

 

1.                                      SCOPE

 

1.1                                 Save
as otherwise expressly provided in this schedule, the provisions of this
schedule shall operate to limit the liability of the Purchaser in respect of
any claim under the Purchaser Warranties (including, for the avoidance of
doubt, clause 7 and references in this Schedule 7 to “claim” and “claims” shall
be construed accordingly.)

 

1.3                                 All
of the limitations on the liability of the Warrantors contained in this
schedule are subject to paragraph 12 of this Schedule 7.

 

2.                                      LIMITATIONS
OF QUANTUM

 

2.1                                 The
maximum aggregate liability of the Purchaser in respect of all claims shall not
exceed US$12,100,000.

 

2.2                                 The
liability of the Purchaser to any Seller shall not exceed the proportion of
total Consideration paid to such Seller.

 

2.3                                 The
Purchaser shall only be liable in respect of any Claim brought by any Seller
for breach of any of the Purchaser’s Warranties if the aggregate amount of all
claims brought by the Sellers exceeds a total of £50,000 but once this minimum
is exceeded, the Purchaser shall be liable for the full aggregated amount of
the Claims and not just the excess, but subject always to the other limitations
contained in this schedule 7.

 

2.4                                 The
Purchaser shall not be liable for any damages or other amounts in respect of
any Claim or Claims under any of the Purchaser’s Warranties unless the amount
of an individual Claim, or a series of related claims to such Claim and arising
from the same set of circumstances, exceeds £5,000.  For these purposes, where a Claim relates to
more than one event, circumstance, act or omission which event, circumstance,
act or omission, would separately constitute a breach of or give rise to a
Claim for breach of any of the Purchaser’s Warranties such Claim shall be
treated as a separate Claim in respect of each such event, circumstance, act or
omission

 

100

 

3.                                      TIME
LIMITS

 

3.1                                 The
Purchaser shall be under no liability in respect of any claim unless notice of
such claim giving reasonable details of the relevant facts, matters or
circumstances giving rise to the claim (including an estimate of the amount of
such claim if practicable and without prejudice to any claim any of the Sellers
might actually make) shall have been served upon the Purchasers by the Sellers
within 30 Business Days of any of the Sellers becoming aware that such facts,
matters or circumstances may give rise to a claim and by no later than the
second anniversary of the Effective Date; and

 

3.2                                 Any
claim notified in accordance with Paragraph 3.1 of this Schedule and not
satisfied, settled or withdrawn shall be unenforceable against the Purchaser on
the expiry of the period of 6 months starting on the date of notification of
the claim unless proceedings in respect of such claim have been issued and
served on the Purchaser in accordance with the terms of this agreement.

 

4.                                      GENERAL

 

4.1                                 None
of the Sellers shall be entitled to make any claim in respect of any facts,
matters or circumstances if such facts, matters or circumstances have been
Disclosed in this agreement and/or any of the other Transaction Documents or
any agreed form disclosure letter from the Purchaser to the Sellers.

 

4.2                                 The
Purchaser shall not be liable in respect of any claim: where the Sellers had
actual knowledge of the facts, matters or circumstances which might give rise
to such claim at Completion

 

5.                                      CONDUCT
OF CLAIMS

 

5.1                                 Subject
to any obligations any of the Sellers may have under any applicable policy of
insurance, if any of the Sellers becomes aware that any claim has been made
against any member of the Jump Group by a third party after Completion which is
likely to result in any of the Sellers being entitled to make a claim against
the Purchaser by virtue of a breach of any Purchaser’s Warranty the Sellers
shall:

 

(a)                                  give
notice of such claim to the Purchaser as soon as reasonably practicable, but
not later than 10 Business Days after becoming aware of such Claim, specifying
in reasonable detail to the extent then available, the nature of the potential
liability and so far as practicable, the likely amount of such third party
claim;

 

101

 

(b)                                 not
make any admission of liability, agreement or compromise with any person, body
or authority in relation thereto without, where practicable, having first
notified the Purchaser of its intention to do so (unless to so notify would be
to the material detriment of the Sellers);

 

(c)                                  take
such action as the Purchaser shall reasonably request to avoid, dispute,
resist, compromise, defend or mitigate any such claim (other than any claim the
avoidance, dispute, resistance, compromise, defence or mitigation of which
would be likely to materially adversely affect the goodwill of the business of
the relevant Seller or any claim which seeks or in respect of which there has
been granted injunctive relief) provided that the Purchaser shall hold harmless
all the Sellers against all Losses incurred by any of them arising from any
action taken by any Seller at the request of the Purchaser pursuant to this
paragraph 5; and

 

(d)                                 consult
as fully as is reasonably practicable with the Purchaser as regards the conduct
of any proceedings arising out of such claim and keep the Purchaser reasonably
informed of the progress of such third party claim.

 

5.2                                 Notwithstanding
the preceding provisions of this Schedule, if at any time the Purchaser pays to
any of the Sellers an amount in respect of any claim and either of the Sellers
subsequently becomes entitled to recover from any third party any sum in
respect of the facts, matters or circumstances giving rise to the claim then
the Sellers shall take all necessary steps to enforce such recovery.  If the Sellers shall at any time recover any
sum from a third party which is referable to the facts, matters or
circumstances giving rise to any claim in respect of which the Purchaser has
paid any sum to any of the Sellers then provided that there are no outstanding
claims or disputes between the Purchaser and the Sellers or any of them (or, if
there are any such disputes or claims, following the final adjudication or
settlement of them):

 

(a)                                  if
the amount paid by the Purchaser in respect of the claim is more than the Sum
Recovered, the Sellers shall immediately pay to the Purchaser the Sum
Recovered; and

 

(b)                                 if
the amount paid by the Purchaser in respect of the claim is less than or equal
to the Sum Recovered, the Sellers shall immediately pay to the Purchaser an
amount equal to the amount paid by the Purchaser;

 

102

 

For the
purpose of this Clause “Sum Recovered”
means an amount equal to the total of the amount recovered from the relevant
third party plus any repayment, supplement or interest in respect of the amount
recovered from the person under Section 825 or 826 of ICTA less any tax
computed by reference to the amount recovered from the person payable by the
Purchaser or the Sellers in recovering the amount from the third party and all
costs payable by the Sellers in making any such recovery.

 

6.                                      CHANGE
IN LEGISLATION

 

No liability
shall attach the Purchaser in respect of any claim to the extent that such
claim would not have arisen (or the amount of the claim would not have been
increased) but for a change in legislation made after the date hereof or a
change in the interpretation of the law after the date hereof (whether or not
such change purports to be effective retrospectively in whole or in part) or if
such claim would not have arisen (or the amount of the claim would not have
been increased) but for any judgement delivered after the date hereof.

 

7.                                      CONTINGENT
AND UNQUANTIFIABLE LIABILITIES

 

No liability
shall attach to the Purchaser in respect of any claim to the extent that the
claim is based upon a liability which is contingent only or is otherwise not
capable of being quantified unless and until such liability ceases to be
contingent and becomes an actual liability or becomes capable of being
quantified, as the case may be, provided that this paragraph shall not operate
to avoid a claim made in respect of a contingent or unquantifiable liability
within the applicable time limits specified in paragraph 3 of this schedule if
the notice of such claim has been served before the expiry of the relevant
period (even if such liability does not become an actual or quantifiable
liability, as the case may be, until after the expiry of such period).

 

8.                                      NO
DOUBLE RECOVERY

 

8.1                                 No
Seller shall be entitled to recover damages or obtain payment, reimbursement,
restitution or indemnity more than once for the same Loss.

 

9.                                      WAIVER

 

Each of the
Sellers irrevocably and unconditionally waives any right it may have to rescind
this agreement.

 

103

 

10.                               SURVIVAL
OF THESE PROVISIONS

 

The provisions
of this schedule 7 apply notwithstanding any other provision of this agreement
and will not be discharged or cease to have effect in consequence of any
termination of any other provisions of this agreement.

 

11.                               MITIGATION
NOT AFFECTED

 

Nothing in
this agreement shall affect the application of the common law rules on
mitigation in respect of any claim or any matter giving rise to a claim.

 

12.                               FRAUD

 

None of the
limitations on the liability of the Purchaser set out in this schedule (whether
as to the quantum of the claim, the time limit for notification of the claim,
the procedures or requirements for making a claim or otherwise) shall apply to
any claim against the Purchaser to the extent that the liability of any of the
Purchaser in respect of that claim arises from fraud, wilful default,
concealment, dishonesty or deliberate non-disclosure on the part of the
Purchaser.

 

104

 

SCHEDULE
8

 

Short
Particulars of Properties

 

	
  (1)

  	
   

  	
  (2)

  	
   

  	
  (3)

  	
   

  	
  (4)

  
	
  Legal
  Owner

  	
   

  	
  Description

  	
   

  	
  Lease

  	
   

  	
  Occupant

  
	
  Dima Partnership (lessor)

  	
   

  	
  Unit 4E & 4F, 33-34 Warple Way, London,
  W3 ORG

  	
   

  	
  Lease dated 19 January 2006 made
  between Dima Partnership (1) and Cycling Television Limited (2) for
  a term of 2 years from and including 19 January 2006

  	
   

  	
  Cycling Television Limited

  

 

105

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