The M&A Case Study Experiment - Part 1

Jaysen

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  • Feb 17, 2018
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    Hi All,

    Further to the Building Your Commercial Awareness Issue I sent out just now, you can post an attempted answer to the mock case study in this thread.

    Just a bit of fun to help you practise your case study answers. I encourage you to give it a go even if you find it hard.

    Those who submit their answers by midnight on Thursday 12 January 2023 will receive an email on Friday with the answers to all of the case study questions.

    Good luck!

    Jaysen
     

    Seven

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    May 15, 2022
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    Q1:
    A key reason Digion is interested in acquiring Immersive is the company's co-founders Leon Alexander and Maria May's extensive experience hosting game servers. As reported by Digion's CEO, Elena Alyson, Immersive was also extremely popular with game developers. Digion might be considering the acquisition of Immersive as a strategy for expanding its own business and improving its offerings in the field of distributed simulation software for video games and corporate use.

    Q2:
    As a precaution against Tristan poaching Digion employees, Elena may consider including a non-solicitation clause in Tristan's employment contract or other relevant agreement as part of the conditions precedent. This clause could prohibit Tristan from attempting to recruit or hire Digion employees. The scope and duration of the non-solicitation clause should be carefully considered in order to ensure that it is reasonable and does not impose undue restrictions on Tristan's ability to work or do business.

    The company should also consider whether additional measures are necessary to protect Digion's workforce and prevent its valuable employees from leaving in favour of its competitors. For example, confidentiality and non-disclosure agreements can be implemented, retention efforts can be strengthened, and clear policies and procedures should be implemented for resolving potential conflicts of interest.

    Q3:
    Clause 5 of Document 3 outlines the conditions that must be met in order for the Proposed Acquisition of Immersive by Digion to proceed. The conditions set out in Clause 5 are intended to ensure that the Proposed Acquisition is viable and in the best interests of both parties.

    Q4:
    The seller's liability under the warranties and indemnities provided in Clause 7 of Document 3 could potentially be limited by liability caps. For example, a de minimis clause could be used to exclude small or insignificant damages or liabilities from the scope of the warranties and indemnities, whereas a de maximus clause could be used to limit the seller's potential exposure to large or disproportionate damages or liabilities. A decision on whether to include these kinds of clauses would depend upon the specific circumstances of the proposed acquisition and the degree of risk and liability that the parties are willing to accept.

    Q5:
    In the Proposed Acquisition, the exclusive jurisdiction clause stipulates that legal disputes will be decided by the English courts. These courts are renowned for their expertise in commercial law and predictability. Moreover, judgments rendered by the English courts are generally recognised and enforceable in other countries, which may facilitate Digion's ability to enforce judgments if litigation arises. It also provides Digion with greater legal certainty and protection if disputes arise.
     

    ITA

    New Member
    Jan 9, 2023
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    1) Immersive's co-founders extensive experience hosting game servers. Immersive has great popularity with game developers and the desire for Digion to become more accessible and appealing as it continues its global expansion. Furthermore, Immersive has valuable IP that Digion would like to acquire.
     

    josiemusgra

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    Jan 9, 2023
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    Q1: With a goal of expanding its business, Digion tries to leverage on Immersive's two co-founders experience in game server hosting and its popularity among game developers. They would also like to acquire Immersive's IP.

    Q2: Before acquiring Immersive, make Tristan sign a contract that prevents him from poaching their employees.

    Q3: To prevent acquiring the business from being made less profitable than its current state before purchase

    Q4: Important as it prevents the Seller from being liable for too much unprecedented damages like natural disaster

    Q5: HQ in London, so it's in Digion's favour for everything to be settled in the European jurisdiction without too much uncertainty and dispute
     
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    itsme_kk

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    Apr 24, 2022
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    1. Why do you think Digion wants to buy Immersive?

    There are three possible reasons why Digion wants to buy Immersive:
    • To expand to the European market, as Immersive is based in Frankfurt; and Digion is known to be present in the UK, the US and Canada;
    • To acquire valuable employees – Immersive co-founders Leon Alexander and Maria May;
    • To acquire rights for the Immersive’s IP.
    2. How would you advise Elena handle the situation with Tristan?

    Elena could negotiate Tristan service contract/ employment contract termination however it is likely to be costly to Digion and/or may lead to an employment claim. To retain the employees that Tristan may try to poach, it is important to review their current employment contracts and possibly include non-compete clauses in it.

    3. What is the purpose of Clause 5 in Document 3?

    Clause 5 lists the conditions on which the acquisition is to be proceeded. However, it is indicative only, as, according to clause 1.2, it is not legally binding. Therefore, the completing of these conditions does not guarantee the acquisition.

    4. In Clause 7, note the phrase, 'The Seller’s liability under the warranties and indemnities shall be subject to limitations.' Suppose you were the lawyers acting for the Seller, what could you do to limit the Seller's liabilities? Why is this important?

    As a lawyer for the Seller, I would firstly limit the Seller’s liability by negotiating the scope of warranties and indemnities. From the Seller’s perspective, the scope of warranties and indemnities shall be as small and clearly defined as possible. Secondly, I would include a set of standard limitation clauses on Seller’s liability, for instance, to put limits on the amount of claims, so there is a limit of what Buyer can claim in case of breach of warranty. Finally, I would advise the Seller to make an effective disclosure, as by disclosing the matter the Seller is discharging its liability.
    It is important to limit Seller’s liabilities under the warranties and indemnities as otherwise Buyer may bring a claim for damages if any of the Seller’s warranties turn to be untrue.

    5. Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?

    As Digion is headquartered in London and thus is operating under the UK law, it would be much more convenient for it to resolve any potential issue within the UK jurisdiction
     
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    Maxbb101

    New Member
    Jan 30, 2021
    1
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    Q1: Digion is seeking to reduce cost synergies.

    Q2: Add a condition to the contract that precludes Tristan from poaching her employees.

    Q3: To prevent the acquisition from diminishing the profitability of the business.

    Q4: Safeguards against unforeseeable events that might frustrate the contract.

    Q5: Minimise liability to claims within the UK.
     
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    trinerin

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    Dec 30, 2022
    4
    1
    Q1.
    Product Development - At present, Immerisve is recognised as a multi-player technology enterprise. Digion is a platform used by developers to build games and it intends to improve its services by extending its offering to facilitate the creation of products which support large numbers of players in vast gaming environments. The expertise and product offering boasted by Immersive provides a solution to achieving this aim.

    Client Base & International Presence -
    Digion has made massive strides in expanding its global presence in that it has now made its mark in the UK, US and Canada. Acquiring Immersive Ltd. presents a valuable opportunity to gain a foothold in the German and broader Eastern European market. With this expansion may come greater investment opportunities and a broader consumer base.

    Immersive’s existing popularity amongst developers would hopefully be acquired upon the completion of the transaction.

    Competition Threat -
    As a start up, Immersive may diversify its product offering as it continues to grow, with a possibility it may enter Digion’s competitive space in the future, either as a rival itself or having been acquired by one of Digion’s existing competitors.

    Expertise -
    Successfully acquiring Immersive may lead to the adoption of expert co-founders Leon and Maria who could enrich Digion’s existing resources in terms of know how and product knowledge. This will inject valuable insight into future product development strategies and ensure the multi-player features are built robustly.

    Q2.
    I would advise that a non-solicitation clause is inserted into the Acquisition agreement. This would take the form of a covenant which restricts the seller (Immersive Group) and its affiliates (employees such as Tristan) from competing with the target company or the acquired business (Immersive Ltd), and from soliciting employees and customers of the target company or the buyer (Digion), for a period of time after the closing.

    Q3.
    • To ensure Immersive Ltd. is purchase worthy at the time the acquisition agreement is being finalised, and not just whilst acquisition is being contemplated.
    • To safeguard Digion by preventing the acquisition proceeding where it would be impermissible in the eyes of Competition Law and any relevant governing authorise or regulators.
    • To guarantee all prerequisite conditions are satisfied so the acquisition cannot be declared null and void after the transactions is deemed to have taken place
    • To ensure the transaction, if agreed by both parties, is legally enforceable.
    Q4.
    Argue that this vague and as such liability can be limited to the greatest extent.

    Q.5
    Convenience: As a London-based company, Digion may want to sue or be sued in the country in which they are based.

    Preferred judicial system: Civil litigation systems vary widely and some systems are recognised as being preferable to others depending on whether you are a claimant or defendant. For example, if you are the party most likely to sue (e.g. a purchaser such as Digion or lender) then you will want any dispute to be heard in a jurisdiction which has an efficient judicial system and offers a good range of interim and final remedies. I believe the courts of England and Wales offer this.

    Enforcement: The state in which any judgment is obtained will affect how easily it can be enforced. The commercial worth of a judgment depends on its enforceability and the location of the defendant's assets needs to be taken into account. Whereas arbitral awards are widely enforceable by virtue of the New York Convention, currently there is no real equivalent for court judgments. As such, contracting parties should always check the enforcement position when deciding on forum.
     
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    jmcnlmc

    New Member
    Jan 10, 2023
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    Q.1

    Digion’s reasons to buy immersive:

    • Continue growth with expansion into Germany.
    • Acquiring Immersive’s popularity among game developers.
    • A platform for the patented cloud technology.
    • Acquiring expertise of the immersive founders.


    Q.2

    I would advise Elena to deal with the Tristan concern by:

    • Extending the restrictive covenants in clause in 7.3 to employees of the seller.
    • Consider retention incentives to employees.

    Q.3

    The purpose of clause 5 is to protect Digion from outside events which could materially change the acquisition, whether that be the value another component. It also makes clear at which point the acquisition becomes binding.

    It does this by ensuring transparency from immersive during due diligence; compliance with regulatory requirements and making clear the jurisdictional rules/standard that applies; it ensures that Immersive doesn’t materially/adversely change in nature and there are no repercussions that would bring about such a change.

    Q.4

    I’d encourage the seller to adopt the approach of full disclosure and access, shows goodwill and evidence fair behaviour throughout the transaction. I’d advise to leverage any risk or potential liabilities with an insurance solution. The list of risks are non-exhaustive, the conduct of one employee for instance could threaten the transaction. An insurance solution may re-assure the purchaser.

    Q.5

    Aside from clarity of knowing what law will apply to the transaction. Knowing that the that the Supreme Court would have the final word in the event of a dispute as opposed to a protracted European/other foreign process.
     

    Anna M

    New Member
    Oct 23, 2022
    1
    1
    Why do you think Digion wants to buy Immersive?

    They want to buy immersive for various reasons – the most notable are the interest in Alexander and Maria who bring years of experience. This can be helpful to have them on the team as well as have access to their technology to develop particular aspects of their company, such as helping their game developers. They would also be keen to have this new, popular start-up tech company on their team as opposed to being one of their competitors.

    How would you advise Elena handle the situation with Tristan?

    I would advise Elena to ensure that Tristan signs a non-solicitation agreement so that if his employment is terminated while the target is being acquired, he cannot therefore convince other employees of the company to join him, if he decides to set up a competing firm. A confidentiality clause is also advisable to ensure that any confidential information that can be useful to competitors will not be disclosed by Tristan.

    I would also advise that there be a preliminary search of the IP rights of the target, in case any issues arise from transferring the IP rights upon purchase. This would be done in the due diligence part of the process. There should be an extensive list of the IP rights and documentation that the buyer will be acquiring and a clause should be added in the contract so that the seller ensures that liability falls on them in case issues do arise and the buyer cannot acquire certain rights due to any restrictions. This search should also reveal whether the Immersive is already infringing on rights or if there is any ongoing litigation due to IP rights.

    What is the purpose of Clause 5 in Document 3?

    Conditions in an agreement set out the conditions to be met by the seller in order for the acquisition to proceed. If one of the conditions are breached, this gives rise to the buyer’s rights to terminate the contract or not follow through with the acquisition. It allows the seller to distinguish the scope and situation of their offer and it gives the buyer certainty on what the scope and situation of their purchase will be. For example, the condition that the seller must not be in or anticipating litigation allows the buyer certainty that they will not acquire any litigation or conflicts that will give rise to litigation upon purchase.

    The material adverse change clause for exmaple ensures the buyer that no changes in duration of the acquisition process will materially affect the business they are purchasing.

    In Clause 7, note the phrase, 'The Seller’s liability under the warranties and indemnities shall be subject to limitations.' Suppose you were the lawyers acting for the Seller, what could you do to limit the Seller's liabilities? Why is this important?

    The Seller’s lawyers should limit their liability to only what the Seller is aware or made aware of. It’s important to limit the scope and ensure that they are not liable for what the seller is not aware of or ‘should be deemed’ aware of in case judges in potential litigation may impose this interpretation. Without these limitations, it can allow the buyer to terminate or claim for damages from the Seller any issues that the Seller may not even be aware of.

    A time limit should also be in place for any liability to ensure that any changes or issues that the Seller cannot reasonably anticipate nor have known, if it were not for a change in the market or a specific timeframe, will not give rise to liability for the Seller.

    Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?

    Digion’s headquarters are based in London and therefore would want any litigation to be subject to and rely on the law in England for certainty and protection. Immersive is based in Frankfurt which may allow flexibility to certain laws and regulations that England may not, if legal disputes were to arise outside of the UK.
     
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    rc1tby

    New Member
    Dec 14, 2021
    2
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    1) Reasons for purchase: Aquiring expetise (co-founders of Immersive), expanding market (access to EU), limiting threat from competitor (both in competing products and staff poaching), Improving own position within market (Immersive technology popular with developers).

    2) Firstly, I would remind Elena that she knows this is happening, which means her staff have informed HR rather than entertaining the offers, this is a good sign. Secondly, I would advise her to look at her current employment contracts, do they include a non-compete/confidentiality clause.

    Depending on how hostile a purchase this is, it may be possible to speak with Immersive and have them enfore a non-compete/confidentiality clause on the VP. If this is not possible then extend the clause 7.3 to include agents of the company.
     
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    Owenfilt

    New Member
    Dec 3, 2022
    1
    1
    Q1 -
    Developing Services & Product – Digion plans to improve its services by extending its offering to facilitate the creation of products which support large numbers of players in vast gaming environments

    Expanding Presence – Digion have currently successfully expanded to Canada, the US & UK through other acquisitions. Immersive present the opportunity to expand to the German market (Frankfurt-based) and possible eastern European market.

    Acquiring further expertise – expressly stated that Digion are keenly interested in Immersive’s two co-founders (Leon Alexander & Maria May) whom have vast experience in game server hosting (thus helping them to expand & develop their services & products).

    Limiting threat – Before acquisition, it could be perceived that Immersive would likely be potential competition to Digion with its expertise and future growth.

    Q2 -
    Non-solicitation clause – standard clause limiting an employee’s solicitation of employees and customers during the term of the employee’s employment and for a specified period of time after the employment relationship ends.

    May be advised to be inserted into the Acquisition agreement

    Likely to be a restrictive covenant which prevents Immersive and its employees (such as Tristan) from competing with the target company/acquired business (Immersive) and from soliciting employees and customers of the target company or the buyer (Digion), for a period of time (possible 1, 2 years etc).

    Q3 -
    Lists the conditions on which the acquisition will go forward

    However, it is stated in clause 1.2 that some terms are not exhaustive and are subject to contract and not intended to be legally binding.

    Q4 -
    Possible negotiate of the scope of warranties & indemnities

    Inclusion of liability caps – i.e., a ‘de minimis clause’ – exclude small or insignificant damages or liabilities from the scope of the warranties and indemnities.

    Q5 -
    Clause 13.1.1 – courts are recognised for their strength in corporate/commercial law – judgements are also recognised and enforceable in other countries, which provides Digion with greater legal certainty and protection if issues arise.
     
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    caitlyn

    New Member
    Jan 11, 2023
    1
    1
    Hi All,

    Further to the Building Your Commercial Awareness Issue I sent out just now, you can post an attempted answer to the mock case study in this thread.

    Just a bit of fun to help you practise your case study answers. I encourage you to give it a go even if you find it hard.

    Those who submit their answers by midnight on Thursday 12 January 2023 will receive an email on Friday with the answers to all of the case study questions.

    Good luck!

    Jaysen

    1. Why do you think Digion wants to buy Immersive?

    Digion has an interest in buying Immersive for three reasons, based on the provided communications: i) to acquire talent, ii) to acquire intellectual property and iii) to acquire customers. This seems to be a vertical acquisition, as Immersive supplies the servers to host Digion’s simulation software. Digion’s CEO has expressed interest in Immersive’s two co-founders as they have extensive experience in game server hosting, which is a key component of Digion’s business - Digion provides simulation software, which is essential the program behind video games, and Immersive would bring both the intellectual property and experience about the servers which would host this program. This is essential for perfecting multiplayer access, one of Digion’s main offerings. Immersive also provides potential access to customers, with Digion’s CEO citing Immersive’s popularity among game developers - this would offer Digion the chance to advertise its simulation software to these game developers, or even to better compete with them, although this second reason would provide potential competition issues in the deal.

    There was very limited information offered about Immersive's actual business model/product, is this typical in a case study?
     
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    rachqq

    Standard Member
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    Feb 21, 2021
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    Q1:
    Acquiring Immersive would provide Digion with several benefits. Digion is a technology company that provides distributed simulation software to facilitate online game development. Acquiring Immersive, a multiplayer technology start-up, would allow Digion to diversify its product offering and utilise Immersive’s technology to improve its own software.

    With Digion’s presence in Canada, the US and the UK, acquiring Immersive would enable Digion to gain a foothold in Germany. This is significant as this will give Digion the opportunity to gain access to the Eastern European consumer base and further bolster its global presence.

    Elena Alyson, Digion’s CEO has also expressed interest in Immersive’s two co-founders, whose experience in game server hosting will provide Digion with vital know-how for future product development.

    Additionally, should Digion acquire Immersive, Immersive’s popularity among game developers would be shared with Digion. This would increase Digion’s reputation and consequently draw more attention to the company. On this basis, Digion will have the ability to win more clients and increase its revenue as a result of the acquisition.


    Q2:
    I would advise that a non-solicitation clause is inserted into the conditions precedent. As a restrictive covenant, the clause would prohibit Immersive and its employees (including Tristan) from soliciting Digion employees for recruitment. The scope and duration of the clause should be carefully negotiated.

    To retain key employees, I would also advise implementing share options and equity incentivisation.


    Q3:
    Clause 5 details the conditions that must be met for the acquisition to proceed. However, these terms are not legally binding until a formal written SPA is entered into.


    Q4:
    The scope of the warranties and indemnities should be carefully negotiated and made as clear as possible – the Seller should ensure it is only liable for what it has been made aware of.

    I would advise implementing liability caps – putting a limit on the types of claims the Buyer can make would reduce the Seller’s liability.

    I would also advise the Seller to actively participate in the due disclosure process and ensure everything has been disclosed. The Seller will not be made liable for what it has disclosed.


    Q5:
    As Digion is headquartered in London, it will want to settle disputes in the country it is based. In addition to convenience, settling disputes in the English courts as opposed to a foreign jurisdiction provides greater legal certainty for Digion. As the US and Canada (where Digion also operates) are also common law jurisdictions, this may make judgments reached by the English courts easier to enforce.
     
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    lawyering

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    Oct 29, 2020
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    Q5:

    First, the choice of English law may be based on the fact Digion is familiar with this body of law due to being headquartered in London.

    Second, similar to New York law, English law provides a market standard that spans across many countries, especially English-speaking ones. English law is also known to be business-friendly; for example, it prioritises freedom of contract and so English judges often take a more hands-off approach in favour of party autonomy.

    Finally, since the SPA is based on Digion’s terms (5.3 “...the initial draft of which will be prepared by the Buyer's advisers”) it’s likely any ambiguities in Digion’s terms may be questioned if any post-acquisition disputes arise. Therefore, a single, exclusive jurisdiction chosen beforehand is helpful for Digion as they can have more certainty as to how their terms will be interpreted i.e., in accordance with English law. Judicial precedent is not only extensive due to the long history of Chancery law, but the common law doctrine in England means English judges are more consistent and predictable in their approach compared with other jurisdictions.
     
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    faccinidori

    Standard Member
    Jan 11, 2023
    9
    9
    Q1:
    Digion has been expanding its presence in Canada, the US and the UK. The acquisition of Immersive, a Frankfurt-based company, fits the expansion strategy as it will give Digion access to continental Europe.

    Digion’s objective is to improve services delivered to developers developing online games. By acquiring immersive, Digion could gain access to human resources skilled in game server hosting and to recognised brand among the online game developers. Furthermore, as stated by Elena Alyson, Immersive has valuable IP that Digion would like to acquire.

    Q2:
    Tristan should agree to a non-solicit clause. As a result, he would be prohibited from approaching and attempting to poach Digion’s employees. He should also agree to a non-compete clause so if he leaves the business, he will be prohibited from setting up a competing company for a certain period of time.

    Q3:
    In essence, Clause 5 of Document 3 is aimed primarily at protecting Digion’s interests. For instance, Clause 5.5 ensures that, following completion of the transaction, the acquired business does not turn out to be of a smaller value than initially agreed upon.
    Q4:
    If I were the lawyers acting for the seller, I would subject the liabilities and warranties to a financial cap. In other words, I would limit the amount that the Seller could be required to pay the Buyer if the circumstances or statements of existing fact covered by the indemnities or warranties, respectively, materialise. I would also subject the clauses to time limitations as a result of which, after a certain period of time following the acquisition, the Buyer could no longer the invoke the indemnities or warranties to claim damages. Protecting the Seller’s interests in the way outlined above is important from the perspective of managing the risks.

    Q5:
    Digion is headquartered in London. Therefore, if a dispute arises between Digion and Immersive, the clause concerning jurisdiction ensures that it will be decided in London rather than Frankfurt.
     
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    anon19

    New Member
    Jan 11, 2023
    1
    1
    Q1: Digion is looking to expand its presence and also acquire valuable IP which Immersive holds

    Q3: Clause 5 entails the conditions which must be met in order for the acquisition to take place and also protect Digion’s interests
     
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    19vanessat

    Well-Known Member
    Feb 23, 2022
    21
    32
    Q1) Why do you think Digion wants to buy Immersive?
    • Digion wants to acquire the valuable IP of Immersive
    • Digion wants to leverage the expertise of Immersive’s 2 co-founders, who have a lot of experience in game server hosting
    • Digion believes that its acquisition of Immersive will boost its popularity and PR image, because Immersive is popular amongst game developers
      • They will gain more market share as more game developers are attracted to their service to make games
    • International expansion: this seems to be part of their strategy this year to rapidly expand across the globe

    Q2) How would you advise Elena handle the situation with Tristan?
    • Reach out to Immersive leadership including Tristan to talk it through, understand Tristan’s concerns
    • Convince them of the benefits of the acquisition
    • If unsuccessful, offer Tristan special perks such as increased financial perks, a position where he can do what he likes, dual-class shares etc

    Q3) What is the purpose of Clause 5 in Document 3?

    • Clause 5 stipulates the conditions precedent that have to be completed before the deal can conclude
    • It ensures that due diligence is completed, and that the target company’s Articles of Association are conducive to the acquisition
    • It protects Digion’s interests against any changes in the target company’s health
    • Ensures regulatory compliance - that CMA approval

    Q4) In Clause 7, note the phrase, 'The Seller’s liability under the warranties and indemnities shall be subject to limitations.' Suppose you were the lawyers acting for the Seller, what could you do to limit the Seller's liabilities? Why is this important?
    • Conduct due diligence on any existing investments or assets (e.g. real estate... etc)
      • There may be assets that the purchaser sees as unnecessary or risky and want to get rid of it/stipulate conditions in the acquisition agreement
    • Conduct due diligence on outstanding litigation
      • This is important because if it’s not settled and the target loses, the purchaser is liable to pay for any damages awarded
      • Purchaser/Seller must thus ensure there’s an indemnity in place against any potential costs
      • The nature of the outstanding litigation may also influence the target’s business prospects and overall health. For example, losing an important IP litigation means they lose a key part of their business etc.
    • Conduct due diligence on pension scheme liability
      • Purchasers are liable for future pension payments as well as payments that accrued due to work carried out pre-acquisition
      • Check that the target has enough money set aside to fulfill this
      • Set up a warranty with regards to this

    Q5) Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?
    • Digion is headquartered in London, under the courts of England, whereas Immersive is Frankfurt-based
    • This ensures that Digion has home advantage and would not need to pay additional costs associated to settling under German law (e.g. hiring German lawyer etc)
     
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    -as-above-so-below-

    Standard Member
    May 30, 2022
    7
    0
    Why do you think Digion wants to buy Immersive?
    Buying immersive fits into Digion’s market strategy. Digion has set on expanding in Canada, US and the UK, as they have already completed 3 acquisitions. Digion are interested in the experience of Immersive’s co-founders in game server hosting as well as Immersive’s popularity among game developers. They are probably expecting that the experience and expertise of the co-founders will contribute to Digion’s goal to make online game development more efficient, effective, and accessible. IN addition, Immersive’s popularity among game developers will likely boost their client base as well as reputation.

    How would you advise Elena to handle the situation with Tristan?
    I would recommend the inclusion of a non-solicitation clause. It would limit an employee's (Tristan’s) solicitation of employees and customers during the term of their employment and for a specified period of time after the employment relationship ends.

    What is the purpose of Clause 5 in Document 3?
    Clause 5 states the conditions precedent for the share purchase to go through – conditions agreed by the parties that must be satisfied, or waived, before the acquisition may close.

    In Clause 7, note the phrase, 'The Seller’s liability under the warranties and indemnities shall be subject to limitations.' Suppose you were the lawyers acting for the Seller, what could you do to limit the Seller's liabilities? Why is this important?
    If I were acting for the seller I would limit the liabilities by including a cap on their amount. I could also limit the facts from which a liability may arise. For example, excluding the Seller’s liability if the claim arises from facts which have been disclosed. I could also set a time limitation that is shorter than the ones in the Limitation Act 1980.

    Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?
    Digion are headquartered in London and it would give them an advantage if the English court has an exclusive jurisdiction. This is due to possible familiarity with the applicable rules and reliance on trusted expertise by an in-house counsel or a law firm. In addition, it would provide legal certainty as well as make the process more convenient.
     

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