Why do you think Digion wants to buy Immersive?
Digion's acquisition of Immersive makes business sense as it weeds out direct competition in the game development sector. Digion can also leverage on Immersive's popularity and branding amongst game software developers, as well as their co-founder's experience to improve on their product offerings. With plans of expansion, fresh funding from venture capital firms also allows for rapid scaling, as seen in their recent acquisitions, in order to quickly capture market share.
How would you advise Elena handle the situation with Tristan?
Elena may rely on the restrictive covenant in Clause 7.3 to prevent Tristan from poaching her employees. Even so, I would still advise Elena to get Tristan to sign an employee non-disclosure and non-compete agreements if he were to join Digion, as this would create legal obligations on him to protect Digion's interests. Nonetheless, enforcement of these agreements may still be tricky and costly to litigate. As such, she would be better off not hiring him if basic trust is not possible so as to avoid future potential disputes.
What is the purpose of Clause 5 in Document 3?
Clause 5 details the conditions for the completion of the share purchase agreement between both parties. If any of these are breached or unfulfilled, the buyer/seller may choose to not proceed with the purchase/sale.
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?
I would seek to insert clauses that specifies the extent of the liability for the identified warranties and indemnities, and also state a cap on the reasonable sum of damages for those that are foreseeable.
Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?
Digion is headquartered in London so being able to rely on English law to give legal effect to its contractual rights is crucial for protecting its business interests. Furthermore, as a multinational company dealing with many companies across different jurisdictions, limiting jurisdiction to the courts of England to govern its disputes helps to avoid ambiguity and provides much certainty in the event of potential litigation.
