Subject: FW: Purchase of the business and assets of Live Squawk Ltd (in admin) ("Seller")
From: George Eaton-Busfield <[email-masked]>
To: "Frazer, Sheena" <[email-masked]>, "Riley, Neil" <[email-masked]>, "Parker, Chris" <[email-masked]>
Cc: "Jason, The JET Group" <[email-masked]>, "George Eaton-Busfield" <[email-masked]>
Date: Fri, 13 Apr 2018 22:57:44 +0000

Dear Sheena and Chris and Neil,
Jason and I are hugely grateful for your efforts this week.
Please send the attached to Andrew / the other side - it is an unchanged version from what you sent.
Thanks
G

From: George Eaton-Busfield
Sent: 13 April 2018 23:53
To: index arb <[email-masked]>; Adam Voce <[email-masked]>
Cc: James Voce <[email-masked]>; Aubrey Hayward <[email-masked]>; Adam Linton <[email-masked]>; Samuel Indyk <[email-masked]>; Yogesh Chandarana <[email-masked]>; Albie Turner <[email-masked]>; Fieldhouse <[email-masked]>; Nicola-Robin <[email-masked]>; Alex Piper <[email-masked]>; Jason, The JET Group <[email-masked]>; Parker, Chris <[email-masked]>; Riley, Neil <[email-masked]>; Frazer, Sheena <[email-masked]>
Subject: FW: Purchase of the business and assets of Live Squawk Ltd (in admin) ("Seller")
Importance: High

Adam V, Mehul P, Jason E,

Please review a final contract drafted together with a comparison to the original.

It would be ideal / advantageous to revert to Andrew Andronikou with a signed version of the attached if possible by 23.55 for various and important reasons that are at this immediate stage not worth specifying.
Please provide your input by way of any very important amendments noting that you have already reviewed the earlier draft.

For myself I am content with the content as to that in provides the best outcome that JET can hope for BUT I am conscious that there are of course some imminent risks.
I envisage that Mehul / Av will contribute as is just to the financing of the programme but given the final hour I confirm that I will personally undertake to finance the deal should you feel you do not wish to o otherwise - mainly because if I do not I fear that the deal will be lost in its entirety.

It is my understanding that there are risks for Jason and in undertaking this deal, but my instinct tells me that these are significantly less than those if fraudsters are allowed to pollute the industry in which we operate by there own acquisition of the company.
With this in mind - please review and provide feedback asasp.

Kind Regards
Georg

==========================================================================================================================================================================================================
From: Frazer, Sheena <[email-masked]<mailto:[email-masked]>>
Sent: 13 April 2018 23:46
To: George Eaton-Busfield <[email-masked]<mailto:[email-masked]>>; Jason Earl ([email-masked]<mailto:[email-masked]>) <[email-masked]<mailto:[email-masked]>>
Cc: Riley, Neil <[email-masked]<mailto:[email-masked]>>; Parker, Chris <[email-masked]<mailto:[email-masked]>>
Subject: Live Squawk - SPA

George, Jason - a comparison against the administrators original attached.

Kind regards
Sheena

Sheena Frazer
Senior Associate

T +442071537252
F +442077966361
M +447738295449
E [email-masked] <mailto:[email-masked]>

DLA Piper UK LLP
www.dlapiper.com <http://www.dlapiper.com>

From: Frazer, Sheena <[email-masked]<mailto:[email-masked]>>
Sent: 13 April 2018 23:14
To: Jason Earl ([email-masked]<mailto:[email-masked]>) <[email-masked]<mailto:[email-masked]>>; George Eaton-Busfield <[email-masked]<mailto:[email-masked]>>
Cc: Riley, Neil <[email-masked]<mailto:[email-masked]>>; Parker, Chris <[email-masked]<mailto:[email-masked]>>
Subject: Purchase of the business and assets of Live Squawk Ltd (in admin) ("Seller")

Jason, George

We attach the final form of the contract to be signed by Jason on behalf of The Jet Group Limited ("Jet") and in his personal capacity, incorporating your comments.  Please note that this has not been entered into yet and Jet is not yet bound, therefore you still have the opportunity to not proceed with the purchase or seek further changes.

As you know, we were instructed to review a sale agreement ("Agreement") received by the administrators yesterday evening.  The deadline for agreement of this Agreement was originally described by you as being "48 hours from receipt", however today there have been what can only be described as mixed messages about the true deadline being imposed.  This has culminated in the administrator withdrawing the contract altogether, resulting in us having to essentially conclude further work on it and provide it to you for signature in a less than ideal form, as you hope this will bring the administrator back on board.  Even the email confirming the 48 hour period which you kindly provided by way of evidence of your exclusivity, has according to the administrator been superceded by further correspondence revoking this, although we haven't been supplied with copies (but have asked for these).

However in light of the extremely short timescale which became even tighter today, you will recognise that we, as you legal advisers, have had zero opportunity to conduct legal due diligence or to fully develop and negotiate the terms of the Agreement.  As such our ability to insert all of the additional protections for Jet which we would have liked to put in with more time and information has been greatly impaired.  We have of course taken instructions from you in as much detail as your limited availability and the tight timescale has allowed and have reflected these instructions in the sale agreement.  However, we would like to highlight the below the areas of risk which have been discussed with you and acknowledged by you during our conversations.

As a preliminary and more general point, we would emphasise that you may be overpaying for the assets you are proposing to buy, given that (as set out in more detail below) you may not under the SPA or as a result of external factors, gain title/access to all of the, assets, rights, log in details, staff, accreditations and other essential elements of the business, in order to be able to continue trading it immediately or at all, in whole or in part.  Any business interruption will damage the reputation of the business and may result in a loss of customers.  However we note that part of your incentive to buy this business is to prevent your competitors providing a cheap or free alternative to your existing service.  We would urge you to consider whether, if this turns out to be the main or only benefit you derive from the sale, it is worth the level of consideration paid.

1.  Due Diligence

As agreed, due to the timescales involved and the lack of information provided to us, we have not undertaken any due diligence in respect of the assets and business that Jet is proposing to purchase from the Seller and therefore you will need to rely on your own due diligence to ensure that the sale agreement captures all of the assets that you will need in order to operate the business.

In particular, please note the following:

  *   Contracts

The contracts detailed a Schedule 1 of the Agreement as "Customer Contracts" refer simply to an account reference and name. We are unable to advise as to whether this sufficiently identifies the relevant contract to be transferred.

We have not received or reviewed any contracts and therefore we are unable to confirm whether the contracts:-

     *   contain insolvency termination provisions allowing the counterparty to terminate because the Seller is in administration;
     *   contain notice provisions allowing the counterparty to terminate on notice;
     *   require consent of the counterparty for assignment;
     *   need to be novated rather than assigned as you can only take the benefit but not the burden via assignment, and in the timescale available, there will not be a chance to agree a novation with the counterparties;
     *   are not be capable of assignment at all;
     *   are with counterparties who won't honour their obligations; or
     *   contain other provisions which might hinder ongoing trading.

We also note that schedule 1 of the Agreement contains very limited information regarding the customer contracts and we are entirely reliant on the information provided by you in completing this schedule.  We cannot advise on whether this is sufficient to adequately identify all the customer contracts.

You have informed us of various contracts with suppliers (eg TLC Holdings and Microlatency) which are operated by persons who you say will be unsupportive of the business under your ownership and are expected to be unhelpful or even actively malicious and destructive towards your ability to operate the business.  Such persons may for example withhold log in details, destroy information, software and sourcecodes, assert contractual terms which you believe have been altered in bad faith and without agreement, block your access to assets, refuse to change company names and refuse to hand over assets which you have acquired but which are in their possession.  Obviously we have no information beyond what little you have relayed to us therefore we cannot advise you in relation to these risks, except to tell you what the obligations of an administrator are (and these are very limited under the SPA).  Please note also that the administrator will not commence litigation at your request.

  *   Finance or security documentation

We have not seen nor reviewed any finance or security documentation in relation to the Seller however, our searches at Companies House on 12 April 2018 show that there is no security registered against the charges register for the Seller.

  *   Information Technology

We have not been provided with details of the information technology used by the Seller and given the nature of the business of the Seller this is likely to be business critical information technology.  You are aware there may be a period for which you are not able to continue trading the business of the Seller and you may not be able to trade it at all.  If there is a gap in continuity of service, this will damage the business and you may lose customers.

  *   Employees

The Agreement notes that all of the employees listed at schedule 2 are current employees of the Seller.  As such, as a result of the business transfer, all of the Seller's employee's contracts of employment (including any rights for notice, redundancy and other employee claims) would automatically transfer across to Jet, such that Jet will be the employer of these employees and would have to adhere to the terms of their existing employment contracts. This is a matter of law (under TUPE) and you are unable to pick and choose who is included in the sale on the basis that you are purchasing the business. Jet will effectively step into the shoes of the Seller with respect to each of the employees listed at schedule 2 of the Agreement (and another employees of the Seller even if not listed). In relation to pre-existing debts owed to employees these will also transfer across, except that a limited amount of arrears in wages, holiday pay for holiday taken and pension contributions will not transfer and are payable by the National Insurance Fund.  If any of the employees of the Seller resign prior to completion (waiving their notice period) and it is expressly noted that they object to the TUPE transfer of their employment, these employees will not transfer across. However, we would require a resignation letter with appropriate wording to ensure that there is no TUPE transfer which is unlikely.

We have not undertaken any due diligence in respect of employees. TUPE will apply to transfer those employees who work in the business that is being purchased from the Seller to the Purchaser.

  *   Pensions

We have not received any information as to whether the company offers a workplace pension scheme to staff.

  *   Tax

We have not considered any tax implications of the sale or provided any tax advice.

  *   Intellectual Property and accreditation

Accreditation -  Please note that there is no guarantee that you will be able to acquire or use any accreditations currently held by the Vendor as our understanding that they are simply not assignable.  Furthermore, these may rely on access to specific rooms within financial institutions and corresponding login details which you may not be able to obtain.

Intellectual Property - We have not conducted due diligence to ensure that all the intellectual property rights you need to trade will be available to you immediately or at all.

  *   Property

We note the sale agreement contains a licence to occupy the property known as the Lower Ground Floor, 3 St Helen's Place, London EC3 ("Property").  We further note that the sale agreement provides that the Seller currently occupies the Property on a short term basis pursuant to the terms of a licence to occupy ("Licence") which was purportedly terminated by a letter dated 1 March 2018. Please note that the original Licensor may argue that the administrators are not entitled to give you access.  We have not undertaken any due diligence in relation to the Property and have not been provided with a copy of the Licence. As such we do not know the licence fee payable under the Licence

  *   Related Companies

The Agreement does not cover the sale of any interest or shareholding that the Seller has in related companies.

  *   Name Change

We cannot ensure that the company in administration will change its name following the sale.

2.  Surety

We note that there are surety provisions contained in the draft sale agreement and Jason is happy to act as surety as envisaged by the current draft of the sale agreement. We have highlighted that Jason should obtain independent legal advice to discuss any concerns.  We are unable to advise Jason in his capacity as surety as we act for the Purchaser however, we strongly recommend that Jason seeks independent legal advice.]

Kind regards
Sheena

Sheena Frazer
Senior Associate

T +442071537252
F +442077966361
M +447738295449
E [email-masked] <mailto:[email-masked]>

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