EXHIBIT 4.1
[LETTERHEAD OF LINKLATERS & ALLIANCE]
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13 September 2001
[LOGO OF PINNACLE]
Pinnacle Systems
Fast Multimedia
Asset Purchase and Transfer Agreement
Professional Video Editing Business
LINKLATERS XXXXXXXXX & XXXXXX
Xxxxxxx Xxxxxxxxxxx 00,
X-00000 Xxxxxxxxx am Main
Postfach 17 01 11,
D-60075 Frankfurt am Main
Telephone: (49-69) 7 10 03-0
Facsimile: (00-00) 0 00 00-000
Asset Purchase and Transfer Agreement
between
(1) Fast Multimedia Holding Inc., 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX
00000, X.X.X.,
- hereinafter referred to as "FAST Inc." -,
(2) Fast Multimedia AG, Xxxxxxxxxxxxxx. 00-00, X-00000 Xxxxxxx, Xxxxxxx,
- hereinafter referred to as "FAST Germany" -,
and together with FAST Inc. jointly referred to as "Sellers" -,
and, for the purposes of the covenants pursuant to Section 12 only,
(3) Xxx. Xxxxxx Xxxxxxx,
(4) Xx. Xxxxxxxx Xxxx,
on the one side
and
(5) PS Miro Holdings Inc. & Co. KG, c/o KPMG Deutsche Treuhand, Xxxxxxxxxx. 0,
00000 Xxxxxxx,
- hereinafter referred to as "Pinnacle KG" -,
(6) Pinnacle Systems GmbH, Xxxxxxxxxxx Xxxxxxx 0x, 00000 Xxxxxxxxxxxx,
Xxxxxxx,
- hereinafter referred to as "Pinnacle Germany"
and together with Pinnacle Inc. jointly referred to as "Purchasers" -,
and, for the purposes of acting as guarantor for the Purchasers' obligations to
pay the consideration pursuant to Section 7 and the Purchasers' Representations
and Warranties pursuant to Sections 10 and 11 and with respect to its express
obligations according to Sections 8 and 13,
(7) Pinnacle Systems, Inc., 000 X. Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000,
- hereinafter referred to as "Pinnacle Inc.".
on the other side
Any reference in this Agreement to "Parties" shall only refer to parties named
under (1), (2), (5) and (6) above.
1 Definitions ..................................................... 1
2 Purchase and Sale of Assets ..................................... 5
3 Transfer of Assets .............................................. 7
4 Transfer of Agreements .......................................... 8
5 Obligations and Liabilities ..................................... 10
6 Employees of the Business ....................................... 11
7 Purchase Price .................................................. 12
8 Registration Rights ............................................. 13
9 Representations and Warranties of the Sellers ................... 14
10 Representations and Warranties of the Purchasers,
Guarantee of Pinnacle, Inc. ..................................... 20
11 Performance and Liability ....................................... 22
12 Covenants ....................................................... 23
13 Compliance with the Securities Laws ............................. 24
14 Closing Date Deliveries ......................................... 25
15 Arrangements concerning the Relationship of the Parties
until and after the Closing Date ................................ 26
16 Miscellaneous ................................................... 27
PREAMBLE
(A) The Sellers are engaged in the business of developing, manufacturing and
selling computer software and hardware for professional video editing as
well as the rendering of services related thereto (the "Business"). FAST
Germany is a wholly-owned subsidiary of FAST Inc.
(B) The Purchasers design, manufacture, market and support a wide range of
high-quality digital solutions that enable businesses and consumers to
create, store, distribute and view video programs.
(C) The Sellers are interested in selling and the Purchasers are interested in
acquiring the Business and all of the assets, contracts and personnel
related thereto, except as specifically excluded from the purchase
hereafter, and certain liabilities specifically listed herein, on the terms
and conditions set forth in this Agreement (the "Acquisition").
1 Definitions
"Acquired Assets" shall mean the Tangible Assets, Intangible Assets, the
Assigned Agreements and the Employment Contracts.
"Affiliate" shall mean a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common
control with, another Person; for these purposes control shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management of a Person, whether by ownership of voting
rights, by contract or otherwise.
"Adjustment Amount" shall mean a number of shares determined by subtracting
a sum B (the "Sum B") from a sum A (the "Sum A") where
(A) Sum A shall mean the sum of 1,200,000 plus the Second Stock Issuance
Amount plus the Third Stock Issuance Amount and where
(B) Sum B shall mean the sum determined by dividing:
(1) the product obtained by multiplying (i) (euro) 14,500,000 minus any
amount for penalties, liabilities, reimbursement or indemnification
due to the Purchasers by the Sellers arising under this Agreement
prior to 15 February 2002 times (ii) the Weighted Average Exchange
Rate by
(2) the Floor Price.
In the event that Sum A is equal to or less than Sum B, the Adjustment
Amount shall be zero.
"Adjusted Second Stock Issuance Amount" shall mean the Second Stock
Issuance Amount minus the Adjustment Amount.
"Average Exchange Rate" for a specified period of time means the average of
the exchange rates of the European Central Bank for exchanging Euro to U.S.
dollars, as reported at the end of each Trading Day during such period
(represented as a ratio of U.S. dollars to Euro).
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"Average Share Price" for a specified period of time shall mean the average
of the last sale prices of a single share of common stock of Pinnacle,
Inc., as reported by the Nasdaq National Market for each Trading Day during
such period.
"Cash Equivalents" shall mean all liquid securities and other instruments
readily marketable.
"Closing Date" shall mean October 1, 2001, the date on which the sale and
transfer of the Business will become effective.
"Employee" shall mean any current employee of any of the Sellers involved
in the Business.
"Employment Agreement" means each agreement, contract or understanding
between the Sellers or any Affiliate of the Sellers and any Employee
relating, directly or indirectly, to such Employee's terms and condition of
employment.
"First Issuance Euro Amount" shall mean a number of Euro determined by
dividing (A) the product of (1) 1,200,000 times (2) the Average Share Price
for the 20 Trading Day period commencing September 30, 2001 by (B) the
Average Exchange Rate over the 30 Trading Day period commencing September
30, 2001.
"Floor Price" shall mean the Average Share Price for the 20 Trading Day
period ending on 12 September 2001.
"Generally Accepted Financial Reporting Principles" shall have the meaning
set forth in Section 9.8 of this Agreement.
"Initial Payment Amount" shall mean the amount of (euro) 1,500,000 (One
Million Five Hundred Thousand Euro).
"Indemnification" shall mean the indemnification and holding harmless of an
indemnified Party by the indemnifying Party from and against Losses. The
Indemnification shall be reduced in each case by the Losses insofar (i) the
indemnified party fails to inform the indemnifying Party of the assertion
of any claims, suits, actions, proceedings, judgements or any demands of
third parties ("Claim") which are likely to have an impact on the
Indemnification, (ii) the indemnified Party has not taken all reasonable
and necessary action in the defense of such Claim taking into account the
future commercial interests of the indemnified Party, (iii) the indemnified
Party has not granted the indemnifying Party the opportunity to provide
comments and to participate on the defense of any Claim, and (iv) the
indemnified party has made admission to the claimant or settlements without
the prior written approval of the indemnifying Party, such approval not to
be unreasonably withheld.
"Inventory Deficiency" shall have the meaning as defined in Section 2.1.
"Inventory Surplus" shall have the meaning as defined in Section 2.1.
"Key Employees" shall mean the Employees listed in Exhibit 15.2a
"Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, whether
incurred or consequential and whether due or to become due), including any
liability for Taxes.
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"Lien" shall mean any mortgage, pledge, lien, security interest, charge,
claim, equity, encumbrance, restriction on transfer, options or other
rights of third parties, capital lease), transfer for the purpose of
subjection to the payment of any indebtedness, or restriction on the
creation of any of the foregoing, whether relating to any property or right
or the income or profits therefrom, except for customary reservations of
title by suppliers pending payment, statutory liens (including but not
limited to landlord liens) or such other Liens as are customary in the
business field of the Business.
"Losses" shall mean any and all costs, claims, judgements, assessments,
deficiencies, penalties and interest, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements), together
with any such reasonable costs or expenses to investigate the same or
enforce the provisions arising out hereof.
"Material Adverse Effect" shall mean (i) a material adverse effect or
change on the business, assets (including intangible assets), condition
(financial or otherwise), results of operations or prospects of a party or
to the ability of a Party to consummate the transactions contemplated by
this Agreement and (ii), additionally, with respect to any Seller shall
mean any circumstance, change in, or effect on such Seller and (iii) that
in each case is materially adverse to the Business taken as a whole.
"Most Recent Accounts" shall mean the audited consolidated accounts of each
of the Sellers dated December 31, 2000 and the unaudited consolidated
accounts of each of the Sellers as of and for the six months ended 30 June
2001, as set forth on Exhibit 9.8 hereto.
"Ordinary Course of Business" shall mean the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organisation, or a governmental entity (or any department,
agency or political subdivision thereof).
"Products" shall mean all current products and services of the Business,
any subsequent versions of such Products currently being developed by the
Sellers or any of their Subsidiaries in the Business, any products
currently being developed by the Sellers or any of their Subsidiaries which
are designed to supersede, replace or function as a component of such
Products, and any upgrades, enhancements, improvements and modifications to
the foregoing, in each case as currently being developed by the Sellers.
"Related Agreements" shall mean all such ancillary agreements required in
this Agreement to be executed and delivered in connection with the
transactions contemplated hereby, including but not limited to the
Registration Rights Agreement.
"Remaining Payment Amount" shall mean the sum of (euro) 14,500,0000
(Fourteen Million Five Hundred Thousand Euro) minus the First Issuance Euro
Amount and minus any amount for penalties, liabilities, reimbursement or
indemnification due to the Purchasers by the Sellers arising under this
Agreement prior to 15 February 2002.
"R&D Employees" shall mean the persons as listed in Exhibit 15.2b.
"Second Payment Amount" shall mean the amount of (euro) 1,000,000 (One
Million Euro) minus any Inventory Deficiency plus any Inventory Surplus.
"Second Stock Issuance Amount" shall mean the number of shares of common
stock of Pinnacle, Inc, rounded to the nearest whole share (and as
appropriately adjusted to reflect
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any stock splits, stock dividends or the like occurring after the date of
this Agreement and prior to the issuance of such shares), determined by
dividing:
(A) the product obtained by multiplying (1) the Remaining Payment Amount
minus (euro) 4,750,000 (Four Million Seven Hundred Fifty Thousand
Euro) times (2) the Average Exchange Rate over the 30 Trading Days
ending on the second Trading Day prior to 1 February 2002, by
(B) the Average Share Price for the 20 Trading Day period ending on the
second Trading Day prior to 1 February 2002.
"Sellers Knowledge" shall mean what would, at the Signing Date, be in the
actual knowledge of Xx. Xxxxxxxx Xxxx, Xx. Xxxxxx Xxxxxxxxx, Xx. Xxxxx
Xxxxxx and Xx. Xxxx Xxxxxxxxx had they acted as a prudent business men.
"Signing Date" shall mean the date that this Agreement has been notarized.
"Subsidiary" or "Subsidiaries" shall mean any corporation or corporations
with respect to which a specified Person (or a Subsidiary thereof) owns a
majority of the common stock or has the power to vote or direct the voting
of sufficient securities to elect a majority of the directors.
"Tax" or collectively "Taxes" shall mean (i) any and all German, United
States federal, state and local and other non-United States taxes,
assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise
and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts; (ii) any liability for the payment of
any amounts of the type described in clause (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any
period; and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied
obligation to indemnify any other Person or as a result or any obligations
under any agreements or arrangements with any other Person with respect to
such amounts and including any liability for taxes of a predecessor entity.
"Third Stock Issuance Amount" shall mean the number of shares of common
stock of Pinnacle, Inc, rounded to the nearest whole share (and as
appropriately adjusted to reflect any stock splits, stock dividends or the
like occurring after the date of this Agreement and prior to the issuance
of such shares), determined by dividing:
(A) the product obtained by multiplying (1) (euro) 4,750,000 (Four Million
Seven Hundred Fifty Thousand Euro) times (2) the Average Exchange Rate
over the 30 Trading Days ending on the second Trading Day prior to 1
February 2002, by
(B) the Average Share Price for the 20 Trading Day period ending on the
second Trading Day prior to 1 February 2002.
"Trading Day" shall mean (A) with respect to exchange rates, a day on which
exchange rates of the European Central Bank for exchanging Euro to U.S.
dollars are reported and (B) with respect to stock prices, shall mean a day
on which sale prices for such stock are reported by the Nasdaq National
Market.
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"Transferred Employee" shall mean any Employee being employed in the
Business in Germany at 30 September 2001, 24:00h, and transferred to the
Purchaser pursuant to Section 6 of this Agreement.
"Weighted Average Exchange Rate" shall mean the exchange rate determined by
taking the simple average of the Average Exchange Rate over the 30 Trading
Day period commencing September 30, 2001 and the Average Exchange Rate over
the 30 Trading Days ending on the second Trading Day prior to 1 February
2002.
2 Purchase and Sale of Assets
2.1 Purchase and Sale of Tangible Assets. On the terms and subject to the
conditions set forth in this Agreement, the Sellers hereby sell to
Pinnacle Germany, and Pinnacle Germany hereby purchases from the
Sellers, effective as of the Closing Date, all right, title and
interest in and to all of the tangible assets used or existing in the
Business on 30 September 2001, 24:00h, free and clear of all Liens,
except as specifically excluded from the sale and purchase pursuant to
Section 2.2 of this Agreement (the "Tangible Assets"). The Tangible
Assets include, but are not limited to, the following assets in the
Business, wherever located:
(a) all movable fixed assets in existence on 30 September 2001,
24:00h, including all machinery and equipment, tools, fixtures,
fittings, EDV-hardware, office equipment, small value items, and
all tangible embodiments or records related to any Intangible
Assets, including documentation, source code listings and all
files related to intellectual property applications or
registrations, including, but not limited to, the assets set
forth on the Updated Exhibit 2.1a (as defined below)
(the "Movable Fixed Assets"); and
(b) all inventory in existence on the 30 September 2001, 24:00h,
including, but not limited to, the inventory set forth on the
Updated Exhibit 2.1b (as defined below) (the "Inventory").
The Exhibits 2.1a (the "Original Exhibit 2.1a") and 2.1b (the
"Original Exhibit 2.1b") attached to this Agreement reflect the status
as of June 30, 2001 and August 31, 2001 respectively. The Parties
agree to mutually update Exhibit 2.1a (the "Updated Exhibit 2.1a") and
2.1b (the "Updated Exhibit 2.1b") as per 30 September 2001, 24:00h, to
reflect all Tangible Assets and Inventory in existence on 30 September
2001, 24:00h. If the aggregate value of the Inventory as set forth in
the Updated Exhibit 2.1b is less than 90% of the aggregate value of
the Inventory as set forth in the Original Exhibit 2.1b, Sellers will
reimburse Purchasers any amount by which the aggregate value of the
Inventory is less than 90% of the aggregate value of the Inventory set
forth on the Original Exhibit 2.1b (the "Inventory Deficiency") and in
the event that the aggregate value of the Inventory as set forth in
the Updated Exhibit 2.1b exceeds 110% of the aggregate value of the
Inventory as set forth in the Original Exhibit 2.1b the Purchasers
shall in addition to the Purchase Price pay to the Sellers any amount
by which the aggregate value of the Inventory exceeds 110% of the
aggregate value of the Inventory set forth on the Original Exhibit
2.1b (the "Inventory Surplus"). For the purposes of valuing the
Inventory pursuant to this Section 2.1, the Parties hereby agree that
the Inventory will be mutually valued by the Parties in accordance
with accounting principles used
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in arriving at the Original Exhibit 2.1b and, insofar as the Original
Exhibit 2.1b does not provide any guidance, in accordance with
Generally Accepted Financial Reporting Principles. Any disputes
between the Sellers and the Purchasers as to the valuation which
cannot be settled directly between them shall be settled, upon request
of either Party, by an independent auditor acting as expert
arbitrator. If the Parties cannot mutually agree on such expert
arbitrator within one (1) week after either Party has requested its
appointment, the expert arbitrator shall be appointed by the Institute
of Chartered Accountants in Dusseldorf. To the extent permissible by
law ((S)319 German Civil Code) the findings of such expert arbitrator
shall be finally binding on the Parties.
2.2 Excluded Tangible Assets
The following tangible assets, properties and rights of the Sellers
shall be specifically excluded from the Tangible Assets to be sold and
purchased hereunder, to the extent in existence on the 30 September
2001, 24:00h, (the "Excluded Tangible Assets"):
(a) All cash held by the Sellers, in hand, in the Sellers' bank
account(s) and all cash credited to any of Sellers' bank accounts
and all Cash Equivalents held by or on behalf of the Sellers.
(b) Sellers' accounts receivable arising from customer contracts for
products and services delivered or rendered prior to the Closing
Date.
(c) All moveable fixed assets located in the Sellers' offices in
France, the United Kingdom and the United States, including but
not limited to EDV hardware, office equipment and small value
items as well as the shareholdings in the Subsidiaries in France
and the United Kingdom and, for the avoidance of doubt, the
shareholdings of FAST Inc. in FAST Germany.
2.3 Purchase and Sale of Intangible Assets. On the terms and subject to
the conditions set forth in this Agreement, the Sellers hereby sell to
Pinnacle KG, and Pinnacle KG hereby purchases from the Sellers, all
right, title and interest in and to all of the intangible assets used
or existing in the Business on 30 September 2001, 24:00h, (the
"Intangible Assets"), including but not limited to, the intangible
assets set forth on Exhibit 2.3a hereto, free and clear of all Liens,
except for those intangible assets expressly set forth on Exhibit
2.3b. The Intangible Assets include, but are not limited to, the
following assets, if any as used by the Sellers in the Business:
(a) all intellectual property rights, copyrights, patents, xxxxx
patents, design patents, trademarks (and goodwill appurtenant
thereto) and respective applications;
(b) transferable public and private concessions, permissions,
authorizations and licenses;
(c) software;
(d) proprietary information or trade secrets of the Business,
including without limitation available lists of suppliers,
dealers, customers, price lists, catalogues, sales literature,
inventions, business and trade secrets, know-
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how, engineering, manufacturing, test and quality control data
relating to past, present and planned products.
Exhibit 2.3a reflects the status of the Intangible Assets as of August
31, 2001. The Parties agree to mutually update Exhibit 2.3a as of the
30 September 2001, 24:00h, to reflect all Intangible Assets in
existence as of 30 September 2001, 24:00h.
2.4 FAST Brand. For the avoidance of doubt, the Intangible Assets shall
not include the rights and title to the name and logo type "FAST", to
the extent such rights and titles are held by Sellers, in the form as
set out in Exhibit 2.4 hereto (the "FAST Brand"). The Sellers hereby
grant to Pinnacle Inc. and its Affiliates for use in the Business, a
royalty-free, non-exclusive license, transferable only upon prior
consent of the Sellers which shall not unreasonably be withheld, in
respect of the FAST Brand for a period of twelve (12) months as of the
Closing Date. Sellers shall not during such period of time grant to
any third party any further licenses to use the FAST Brand.
2.5 It is understood by the Parties, that the intangible assets related to
the U.S., in particular customer relationships, the trademark "Blue"
and support agreements are sold by FAST Inc. to Pinnacle KG. All other
Intangible Assets are solely sold to Pinnacle KG by FAST Germany.
3 Transfer of Assets
On the terms and subject to the conditions set forth herein, effective upon
the Closing, the Sellers hereby transfer to the Purchasers the Tangible
Assets and the Intangible Assets as follows.
3.1 Transfer of Tangible Assets. Effective as of the Closing Date, the
Sellers hereby transfer to Pinnacle Germany, the Tangible Assets, and
Pinnacle Germany hereby accepts the transfer of the Tangible Assets.
3.2 Delivery of Tangible Assets. On the Closing Date the Sellers shall
grant possession to Pinnacle Germany by way of delivery at the
relevant Sellers' premises or such other locations at which Sellers'
hold the Tangible Assets ("ex works"). For the avoidance of doubt the
Sellers shall not be required to deliver the Tangible Assets to the
offices of Pinnacle Germany, such delivery, if any, being the
responsibility of Pinnacle Germany. To the extent that any Tangible
Assets are in direct possession of a third party, the Sellers hereby
assign to Pinnacle Germany, effective as of the Closing Date, all of
their rights and claims against such third party for the delivery of
such Tangible Assets (Abtretung des Herausgabeanspruchs), and Pinnacle
Germany hereby accepts such assignment. At the request of Pinnacle
Germany, the Sellers shall notify the third party of the assignment.
To the extent that on the Closing Date Pinnacle does not gain
possession of individual Tangible Assets because their delivery is not
possible or expedient for factual reasons, the granting of possession
shall be substituted by the agreement that these tangible assets
shall, on the costs and at the risk of the Purchasers, be held by the
Sellers for the benefit of the Purchasers as from the Closing Date
(Besitzkonstitut).
3.3 Assignment of Intangible Assets. Effective as of the Closing Date, the
Sellers hereby assign to Pinnacle KG the Intangible Assets and
Pinnacle KG hereby accepts assignment of the Intangible Assets. The
Parties undertake to give any declarations and sign any further
documents reasonably necessary in order to effect
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the transfer to and the registration for the benefit of Pinnacle KG.
To the extent that a transfer of Intangible Assets is not legally
possible, the Sellers shall grant to Pinnacle KG an exclusive,
irrevocable, transferable royalty-free and perpetual right to use the
respective Intangible Assets. Any registration fees owed to trademark
and patent offices and comparable agencies shall be borne by Pinnacle
KG and each Party shall bear its own costs connected therewith.
4 Transfer of Agreements
4.1 Transfer. Effective as of the Closing Date, the Sellers hereby sell to
Pinnacle Germany, and Pinnacle Germany hereby purchases, all
agreements, contracts, commitments and instruments of the Sellers
pertaining to the Business, existing as of 30 September 2001, 24:00h,
as set forth on Exhibit 4.1 and all pending customer orders received
in the Ordinary Course of Business, except as specifically excluded
pursuant to Section 4.2 of this Agreement (the "Transferred
Agreements"). Pinnacle Germany, effective as of the Closing Date,
shall assume from the Sellers all rights and obligations under the
Transferred Contracts by way of assumption of contract with the effect
of discharging the Sellers (Vertragsubernahme mit befreiender Wirkung)
with respect to all rights and obligations arising on and after the
Closing Date. The Transferred Agreements include all existing
agreements and all pending contract offers made by or to either of the
Sellers related to the Business at 30 September 2001, 24:00h. The
Transferred Agreements include, but are not limited to, the following
agreements, contracts, commitments and instruments, in each case if
pertaining to the Business or the Acquired Assets:
(a) all agreements of the Sellers with suppliers or customers;
(b) all agreements of the Sellers with distributors, agents and
advisers;
(c) all license and co-operation agreements of the Sellers;
(d) all lease, leasing and rental agreements of the Sellers and all
agreements with public utilities;
(e) all insurance agreements however, the Parties hereby agree that
Sellers shall, if legally possible, and in co-operation with the
Purchasers terminate such insurance agreements on or before
September 30, 2001 effective as of December 31, 2001; the Parties
are further in agreement that insurance of the Business and the
Acquired Assets for all periods on and after the Closing Date
shall be in the sole responsibility of the Purchasers; and
(f) all other agreements pertaining to the Business.
Exhibit 4.1 is a list of the Transferred Agreements dated as of August
31, 2001. The Parties agree to mutually update Exhibit 4.1 as of 30
September 2001, 24:00h, to reflect all pertinent changes as to the
Transferred Agreements as of 30 September 2001, 24:00h.
4.2 Excluded Agreements. The following agreements of the Sellers shall be
specifically excluded from the Transferred Agreements:
(a) all employment contracts with any current or former employee of
the Sellers who is not transferred to the Purchasers pursuant to
Section 6, or any of the Sellers' directors (Organe);
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(b) all contracts covering or relating solely to assets and/or
obligations and liabilities which have been specifically excluded
from the sale and purchase;
(c) office lease agreements in France, UK and USA and all other
agreements relating to Sellers offices in France, UK and USA,
including but not limited to all service agreements,
telecommunications agreements and office equipment lease
agreements; and
(d) all other agreements listed in Exhibit 4.2 hereto, including the
agreement of the Sellers with its supplier, BMK, Augsburg
("BMK"), it being understood that Pinnacle Germany undertakes to
purchase from FAST Germany on a separate basis, at cost prices of
FAST Germany (Einstandskosten), such current products or raw
materials in marketable quality and quantity of BMK relating to
the Acquired Assets, at request of FAST Germany up to an
aggregate amount of DEM 500,000 plus Value Added Tax, in respect
of which FAST Germany is bound vis-a-vis BMK by existing purchase
obligations. FAST Germany and Pinnacle Germany shall mutually and
in good faith agree upon the details of the purchase, including
time and further terms and conditions of delivery.
4.3 Third Party Consents. The Parties shall use their best efforts to
obtain the consents of the other parties to the Transferred Agreements
to the transfer and to cause to be executed and delivered to the
Purchasers all documents of transfer necessary to effect the transfer
of such Transferred Agreements. In the event that, for any reason, one
or more third parties refuse to consent to the assignment of such
Transferred Agreement to any of the Purchasers, the rights and
obligations under the applicable Transferred Agreement shall be
transferred in the internal relationship between the Sellers and
Pinnacle Germany, with the consequence that Pinnacle Germany, to the
extent that this is legally permissible, shall act as Sellers' agent
in performing the contract and accepting performance of the contract
by the other contractual party in the name of the respective Seller
but internally on the risk and for the account of Pinnacle Germany.
The Sellers shall, on request of Pinnacle Germany (the "Purchasers'
Instructions"), make any declaration to the extent legally
permissible, including the termination of such Transferred Agreement,
that is requested by Pinnacle Germany, provided however that the
Purchasers shall provide Indemnification to the Sellers for all Losses
based upon or resulting from the Transferred Agreements and the
Purchasers' Instructions for all periods from and after the Closing
Date.
4.4 Breach/Non-Performance of Transferred Agreements Prior to Closing. If,
following the transfer of the Business, the other party to the
Transferred Agreements terminates any of the Transferred Agreements
with the Sellers for cogent reason and/or asserts a claim for breach
of contract, in each case only if based upon or resulting from the
non-performance or the default of the Sellers under the Transferred
Agreements prior to the Closing Date, the Sellers shall provide
Indemnification to the Purchasers from and against any and all Losses.
4.5 Allocation of Benefits and Responsibility Under Transferred Agreements
Prior to and After the Closing Date. Any rights, including trade
receivables, and any obligations and liabilities, including trade
payables under the Transferred Agreements, irrespective of whether the
transfer takes effect in the relation to the
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other contractual party or only in the internal relation between the
Sellers and Pinnacle Germany, shall be attributable to the Sellers to
the extent such right (a "Seller Allocable Right") or such obligation
or liability (a "Seller Allocable Obligation") relates to the period
of time prior to Closing Date and shall be attributable to Pinnacle
Germany to the extent such right (a "Purchaser Allocable Right") or
such obligation or liability (a "Purchaser Allocable Obligation")
relates to the period of time on and after the Closing Date. The
Sellers shall provide Pinnacle Germany with Indemnification for Losses
incurred by Pinnacle Germany and arising out of, based upon or
resulting from the Seller Allocable Obligations. Pinnacle Germany
shall provide the Sellers with Indemnification for Losses incurred by
the Sellers and arising out of, based upon or resulting from the
Purchaser Allocable Obligations. Both the Sellers and Pinnacle Germany
will forward amounts received from the other contractual party
accordingly if such amounts are attributable to the relevant other
Party.
4.6 Warranty Services. The Purchasers shall without undue delay inform
Sellers as to any warranty claims made against the Purchasers relating
to Products sold before the Closing Date ("Defective Products"), and,
on request of Sellers, render all services reasonably necessary and
expectable to fulfill such warranty claims of Sellers' customers
relating to Defective Products, provided however that the Sellers
shall pay to the Purchasers an amount equal to the Purchasers' costs
for any such services plus a mark-up of 10%.
5 Obligations and Liabilities
5.1 Purchasers' Assumed Liabilities. The Purchasers shall assume the
following liabilities or obligations of the Business:
(a) Obligations and liabilities arising from the Transferred
Agreements, to the extent such obligations and liabilities relate
to the period on and after the Closing Date as further specified
in Section 4.5, for the avoidance of doubt including, but not
limited to payment obligations incurred by the Sellers before the
Closing Date relating to services to be rendered, or products to
be delivered, by suppliers to the Purchasers on and after the
Closing Date; and
(b) Obligations and liabilities under the Employment Contracts (as
defined in Section 6.1 of this Agreement) that are being
transferred by virtue of law or pursuant to Section 6 of this
Agreement, to the extent that such obligations and liabilities
relate to the period on and after the Closing Date.
5.2 Liabilities Not Assumed. The Purchasers shall not assume any
Liabilities or obligations (i) of the Sellers or (ii) attached or
related to the Acquired Assets for all periods prior to the Closing
Date, other than those specifically enumerated in this Agreement,
including without limitation any Liability or obligation with respect
to Taxes concerning the period prior to the Closing Date.
5.3 Sellers' Indemnification for Purchasers' Assumed Liabilities. The
Sellers shall provide the Purchasers with Indemnification for Losses
incurred by the Purchasers arising from or related to all obligations
and liabilities of (i) the Sellers, or (ii) relating to the Acquired
Assets for all periods prior to the Closing Date, that the Purchasers
have not assumed pursuant to this Agreement.
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6 Employees of the Business
6.1 (S)613a BGB. The Parties are aware that Pinnacle Germany, by operation
of law, pursuant to (S)613a German Civil Code, will, as of the Closing
Date, assume all rights and obligations arising from all employment
contracts (the "Employment Contracts") of the employees employed in
the Business in Germany who do not exercise their statutory right to
object to the transfer (the "Transferred Employees"). Without limiting
the possibility of Pinnacle Germany to agree upon new terms and
conditions of the employment with the Transferred Employees in
separate agreements with the Transferred Employees after the Closing
Date, Pinnacle Germany hereby also undertakes vis-a-vis the Sellers to
assume the Transferred Employees and the Sellers' obligations under
the Employment Contracts; the provisions of Sec. 4.5 shall apply
mutatis mutandis. A list of all Employment Contracts setting forth the
position, commencement of the employment, salary, other remuneration,
age and, as the case may be, to the extent known by the Sellers at the
date hereof, special dismissal protection (disability, etc.) of all
Employees of the Business as of August 31, 2001 is attached as Exhibit
6.1. In case any Employee objects to his employment relationship being
transferred to Purchaser, such Employee and all liabilities and
obligations in connection with his employment and a termination of his
employment shall remain with the Sellers.
6.2 Information of Employees. As soon as practicable following the
execution of this Agreement, the Parties shall inform and consult with
the Employees in Germany regarding the transfer of the Business by the
Sellers to the Purchasers and the assumption by Pinnacle Germany of
the Employment Contracts.
6.3 Overtime and Vacation Claims. The aggregate amount of claims for
overtime accrued and vacation as of August 31, 2001 have been
calculated as set forth in Exhibit 6.3. The Parties agree to mutually
update Exhibit 6.3 as of 30 September 2001, 24:00h, to reflect the
aggregate amount of claims for overtime accrued and vacation as of 30
September 2001, 24:00h. With the exception of claims for overtime
accrued and vacation not taken before the Closing Date the Sellers
shall remain liable and provide Purchasers with Indemnification for
Losses arising from or related to Transferred Employees relating to
periods before the Closing Date, in particular but not limited to
claims for a prorated portion for the beginning of the year until the
Closing Date of any year-end bonus and similar payments for the year
2001 to be paid to Transferred Employees, provided however that such
year-end bonus and similar payments for the year 2001, to the extent
to be finally determined or otherwise to be resolved on by Purchasers
on a discretionary basis, have been mutually agreed upon in writing by
the Sellers. Purchasers shall bear the remaining prorated portion of
any year-end bonus and similar payments for the year 2001 to be paid
to Transferred Employees.
6.4 Reimbursement of Severance Payments.
(a) Should the Purchasers decide to restructure the Business and,
therefore, discontinue the employment of employees, the Sellers
shall indemnify the Purchasers against reasonable severance
payments to up to 21 employees whose employment is discontinued,
provided that (i) either notice of termination or written notice
offering a severance payment is served on the employee before
December 1, 2001 and (ii) the severance payment is made prior to
January 15, 2002. If less than 71 employees transfer to the
Purchasers, the
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number of employees to whom the indemnity applies shall be
reduced accordingly. The indemnity shall not cover any other
costs in connection with the restructuring (e.g. lawyer fees,
litigation fees).
(b) If the indemnification is not paid within 30 days after a
justified claim under this Section 6.4 is made, the Sellers shall
owe a penalty (Vertragsstrafe) in the amount of 50% of the
indemnity in addition to the indemnification.
6.5 Special Bonus. The Sellers intend to enter in agreements with certain
Employees, pursuant to which such Employees will receive from the
Sellers special bonus payments. Any obligations in respect of such
bonus payments shall to the extent legally possible not be transferred
to the Purchasers. In the event that pursuant to (S)613a German
Civil Code such transfer applies by operation of law, the Sellers
shall provide Indemnification with regard to Losses incurred by the
Purchasers as to the transfer of such bonus obligations. For the
avoidance of doubt, the Sellers shall neither in relation to the
Purchasers nor to the Employees be obliged to grant any such special
bonus.
7 Purchase Price
7.1 Purchase Price. The aggregate consideration (hereinafter referred to
as "Purchase Price") to be paid by the Purchasers to the Sellers for
the sale and transfer of the Business shall be an amount of
(euro) 17,000,000 (Seventeen Million Euro), adjusted by any Inventory
Deficiency or any Inventory Surplus, as the case may be, payable as
hereinafter provided.
7.2 Method of Payment of Purchase Price. The Purchase Price shall be due
and payable by the Purchasers to the Sellers as follows:
(a) An aggregate initial payment of the Initial Payment Amount in
cash (the "Initial Payment") within 1 business day after the
Signing Date to be paid by Pinnacle Germany. Sellers shall grant
to the Purchasers sufficient collateral for the Initial Payment
by assigning for security purposes all accounts receivable, title
to Fixed Assets and Inventory up to the amount of the outstanding
Initial Payment to Purchasers in a separate document as attached
hereto as Exhibit 7.2.
(b) An aggregate second payment of the Second Payment Amount in cash
(the "Second Payment") on October 5, 2001 to be paid by Pinnacle
Germany provided that Sellers and Purchasers have agreed on an
Inventory Deficiency or Inventory Surplus, as the case may be; it
being understood that if the Parties fail to reach agreement on
the amount of a Inventory Deficiency or a Inventory Surplus, as
the case may be, the Second Payment Amount shall be paid to the
Sellers, to the extent not disputed.
(c) The issuance by Pinnacle, Inc. on behalf of Pinnacle KG of
1,200,000 (One Million Two Hundred Thousand) shares of Pinnacle,
Inc. common stock on October 1, 2001 (the "First Stock
Issuance"), payable in accordance with Section 7.3 of this
Agreement.
(d) The issuance by Xxxxxxxx, Inc. on behalf of Pinnacle KG of a
number of shares of Pinnacle, Inc. common stock equal to the sum
of the Adjusted Second Stock Issuance Amount (the "Second Stock
Issuance") and the
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Third Stock Issuance Amount (the "Third Stock Issuance") on 15
February 2002, payable in accordance with Section 7.3 of this
Agreement. The shares of Pinnacle, Inc. common stock issuable
pursuant to the First Stock Issuance, the Second Stock Issuance
and the Third Stock Issuance are sometimes referred to herein as
the "Pinnacle Shares".
7.3 Payment Procedure. The Initial Payment and the Second Payment shall be
paid by the Purchasers by money transfer into the account No. 27 22
860 of FAST Multimedia AG with HypoVereinsbank (Bank Reference Number
700 202 70), and shall be payable in Euro. The First Stock Issuance
and the Second Stock Issuance shall be made in the name of FAST
Multimedia AG and delivered to its deposit account to be notified to
the Purchasers in writing at least 5 business days prior to the date
on which the respective payment becomes payable. The Third Stock
Issuance shall be made in the name of FAST Multimedia Inc. and
delivered to its deposit account to be notified to the Purchasers in
writing at least 5 business days prior to the date on which the
payment becomes payable.
7.4 Value Added Tax. The Parties understand that the sale and purchase of
the Tangible Assets by Pinnacle Germany is subject to Value Added Tax
at the rate of 16% on that portion of the Purchase Price that is
allocated to the Tangible Assets, however the parties understood that
the sale and purchase of the Intangible Assets by Pinnacle KG is not
subject to any Value Added Tax. Pinnacle Germany will pay the Value
Added Tax on the Purchase Price allocated to the Tangible Assets and
any further Value Added Tax, if any. Any Value Added Tax shall be due
and payable as soon as Pinnacle Germany has received from FAST Germany
an respective invoice which conforms to the provisions of sec. 14
German Value Added Tax Act.
7.5 Purchase Price Allocation. The Purchase Price shall be paid as set
forth in Section 7.2. In respect of the Acquired Assets received, the
Purchase Price shall be allocated as follows:
(a) Pinnacle Germany shall bear in consideration for the sale and
transfer of the Inventory, the Movable Fixed Assets and the
Transferred Agreements an amount equal to the value of the
Inventory as per 30 September 2001, 24:00h, plus the value of
the Moveable Fixed Assets as per 30 September 2001, 24:00h, less
the aggregate amount of claims for overtime accrued and vacation
calculated according to Section 6.3 as per 30 September 2001,
24:00h, if any;
(b) Pinnacle KG shall bear in consideration for the sale and transfer
of the Intangible Assets any remaining amount.
8 Registration Rights.
Pinnacle, Inc. undertakes to register for resale on Form S-3 under the
Securities Act of 1933, as amended, (the "Securities Act") the Pinnacle
Shares in accordance with the Registration Rights Agreement attached as
Exhibit 8 hereto.
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9 Representations and Warranties of the Sellers
In concluding this Agreement, the Purchasers rely on the correctness of the
representations and warranties made by the Sellers hereinafter. The Seller
represent expressly and warrant as a guaranteed quality of the Business and
the Acquired Assets (with the legal consequences as conclusively set forth
in Section 11) that the following representations and warranties are
correct, unless expressly otherwise provided hereunder on the Signing Date
and the Closing Date, subject to such exceptions as are specifically set
forth in the disclosure exhibits (referencing the appropriate section and
paragraph numbers, if appropriate) supplied by the Sellers to the Buyers
(the "Schedules") as of the Signing Date or, to the extent representations
and warranties are given to the Sellers' Knowledge as of the Closing Date.
9.1 Organization and Authority. The Sellers are companies duly
incorporated, validly existing and in good standing under the laws of
their respective jurisdiction and have the corporate power to own
their respective properties and to carry on their respective
businesses as now being conducted. Each of the Sellers has all
requisite power and authority to enter into this Agreement and any
Related Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.
9.2 Execution and Delivery. This Agreement and any Related Agreements to
which any Seller is a party have been duly executed and delivered by
such Seller and, assuming the due authorization, execution and
delivery by the other Parties hereto and thereto, constitute the valid
and binding obligation of such Seller enforceable in accordance with
their respective terms, subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and to
rules of law governing specific performance, injunctive relief or
other equitable remedies.
9.3 Compliance with Corporate Requirements. The execution and delivery of
this Agreement and any Related Agreements to which it is a party by
any of the Sellers do not, and, the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in
any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit
under (i) any provision of the charter documents or Bylaws (or their
equivalent) of any such Seller, or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to any such
Seller or its properties or assets.
9.4 Required Consents. Each of the Sellers has obtained or will obtain
prior to the Closing Date, all necessary corporate consents and taken
all necessary corporate action, if any, required on the Sellers side
for the consummation of the transactions contemplated by this
Agreement, including the approval of FAST Germany's shareholders'
meeting pursuant to (S)179a German Stock Corporation Code. Except as
set forth in Exhibit 9.4, no consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other U.S. or German
federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission ("Governmental Entity") or any
third party, for the avoidance of doubt other than the consents of the
other Parties to the Transferred Agreements pursuant to Section 5, is
required by or with respect to any of the Sellers in connection with
the execution and delivery of
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this Agreement and any Related Agreements to which any of the Sellers
is a party or the consummation of the transactions contemplated hereby
and thereby.
9.5 Correct Information. The information contained in the Exhibits of this
Agreement, unless such Exhibits relate to circumstances of the
Purchasers, for which the Sellers accept no responsibility, is
complete and correct.
9.6 Title to Assets. On the Closing Date the Sellers have good and valid
title to, or a valid and subsisting leasehold or license interest in
the Acquired Assets free and clear of all Liens. On the Closing Date
the Sellers have full right and capacity to sell and transfer good and
valid title to the Acquired Assets except for those tangible assets
which are still subject to customary reservations of title by
suppliers pending payment. Except for such customary reservations of
title the Purchasers will receive on the Closing Date good and valid
title, to the Acquired Assets free and clear of all Liens. The use of
the Tangible Assets and of the Intangible Assets by the Sellers and
the sale and transfer of the Tangible Assets and of the Intangible
Assets from the Sellers to the Purchasers to the Sellers' Knowledge
does not infringe any third party rights.
9.7 Sufficiency of Acquired Assets. By the acquisition of the Business
pursuant to this Agreement, the Purchasers are put into the position
to continue the Business of the Sellers in the current form except to
the extent that (i) any other party to any Transferred Agreement may
refuse to agree to the transfer of such Transferred Agreement, (ii)
any Employee may refuse to his transfer to the Purchasers pursuant to
Section 6 and (S)613a German Civil Code, (iii) the Acquired Assets
do not comprise the shares in the Subsidiaries of the Sellers active
in the Business in France and the UK nor any of their Employees or
assets, other than intangible assets, (iv) any changes of the Business
may take place until the Closing Date due to grounds of a change of
general economics or in the business fields in which the Sellers and
the Business are active or (v) any other changes of the Business
beyond Sellers' control may apply, including but not limited to a
potential adverse impact resulting from the disclosure of the
transactions contemplated by this Agreement on the business relations
with third parties, including customers and suppliers of the Business,
namely the business relationship with Matrox Inc., Canada. The
Acquired Assets comprise all of the material assets of the Sellers
used by them in the operation of the Business in the ordinary course
as currently conducted.
9.8 Financial Statements. The Sellers have submitted to the Purchasers the
Most Recent Accounts, statements of operations and statements of cash
flows of the Business as of and for the year ended 31 December 2000
and as of and for the six months ended June 30, 2001 (together the
"Financial Statements"), which are attached as Exhibit 9.8. June 30,
2001 is referred to herein as the "Most Recent Balance Sheet Date."
The Financial Statements have been prepared in accordance with
accounting, valuation and depreciation principles generally accepted
in the respective Seller's jurisdiction ("Generally Accepted Financial
Reporting Principles") all applied consistent with historical
practice, except for changes in the accounting, valuation and
depreciation principles, in particular regarding the inventory and
reserves related to the inventory, as applied to the interim balance
sheet as per June 30, 2001. The Financial Statements are, with the
aforementioned exceptions, complete and correct and present fairly the
financial condition, operating results and cash flows of the Business
as of the dates and for the periods indicated
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therein. The Parties are in agreement that, for the purposes of the
representation and warranties contained in this Section 9.8 only such
balance sheet items shall be represented and warranted to the
Purchasers that relate to the Business and the Acquired Assets as
being transferred to the Purchasers by this Agreement.
9.9 Liabilities. No Seller is a guarantor or otherwise liable for any
Liability of any other person or entity for any matter which relates
to or affects or will affect the Business or Acquired Assets. To the
Sellers' Knowledge, there is no Liability, and, to the Sellers'
Knowledge no threatened action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand, which could give
rise to any Liability that would reasonably be expected to have a
Material Adverse Effect.
9.10 Ordinary Course of Business. Since the Most Recent Balance Sheet Date
until the date hereof, the Business has been conducted within the
Ordinary Course of Business. Since that time no extraordinary business
event or legal arrangement has occurred or been entered into and there
has also not been any event which by itself or together with other
events has a Material Adverse Effect on the Acquired Assets or the
Business.
9.11 Restrictions on Business Activities. Except as specifically
contemplated by this Agreement or its Exhibits, there is no agreement
(non-compete or otherwise) or commitment or any judgment, injunction,
order, decree or other action by any Government Entity binding upon
the Business or the Acquired Assets which has or reasonably could be
expected to have the effect of prohibiting or impairing any business
practice of the Sellers with respect to the Business, any acquisition
or disposition of property (tangible or intangible) by such Seller
relating to the Business or the conduct of the Business by such
Seller. Except as specifically contemplated by this Agreement, none of
the Sellers has entered into any agreement under which the Business is
restricted from providing services to customers or potential customers
or any class of customers of the Business, in any geographic area,
during any period of time or in any segment of the market.
9.12 Condition of Assets. All Movable Fixed Assets have been well
maintained and are in good and serviceable condition, normal wear and
tear excepted. All Inventories on the Closing Date will by quantity
and quality be usable or saleable in the ordinary course of business.
All of the Inventory reflected on the Financial Statements and the
Sellers' books and records on the date hereof were purchased, acquired
or produced in the ordinary and regular course of business.
9.13 Agreements. The pending customer orders transferred to the Purchasers
according to Section 4.1 have been received by the Purchasers in the
Ordinary Course of Business and do not provide for any terms or
conditions, in particular to the calculation and payment conditions
which deviate from the practice of the Sellers in the past. The
conditions are fair and reasonable. To Sellers' Knowledge there is no
reason to believe that such pending customer orders would lead to any
losses outside of the Business, provided that such pending customer
orders will be handled by the Purchasers diligently and in accordance
with the practice as applied in the past.
9.14 Government Approvals. The Sellers have obtained all material
approvals, permits, licenses, grants or other authorizations of any
Government Entity ("Permits") required for the operation of the
Business and for Sellers to hold the Acquired
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Assets. All such Permits and any other Permits held by any Seller in
connection with the operation of the Business or the holding of any of
the Acquired Assets are listed in Exhibit 9.14 and are in full force
and effect and no revocation, limitation or amendment of any of such
Permits is pending or to the Sellers' Knowledge has been threatened.
The Business is in all material aspects carried out in compliance with
the listed Permits.
9.15 Litigation. There is at the date hereof, no action, suit or proceeding
of any nature by or before any Government Entity pending or, to the
Sellers' Knowledge, threatened against any of the Sellers, involving
the Business or the Acquired Assets, or any of its officers or
directors to the extent affecting the Business or the Acquired Assets,
nor, to the Sellers' Knowledge, is there any reasonable basis therefor
which could give rise to any Liability relating to the Acquired Assets
or prevent or materially delay the transactions contemplated by this
Agreement. There is no investigation pending or, to the Sellers'
Knowledge, threatened against any of the Sellers properties or any of
its officers or directors by or before any Governmental Entity which
could prevent or materially delay the transactions contemplated by
this Agreement. No Governmental Entity has at any time challenged or
questioned the legal right of any of the Sellers to manufacture, offer
or sell any of the Products or related services, or to conduct the
Business, in the present manner or style thereof.
9.16 Transferred Agreements. The Transferred Agreements are to the Sellers'
Knowledge valid and enforceable against the Parties thereto and
neither the respective Seller nor, to the Sellers' Knowledge, any
respective other party thereto has materially breached, or is in
default under, any Transferred Agreements.
9.17 Compliance with Regulations. To Sellers' Knowledge, the Business is in
all material respects in compliance with all material applicable laws
(including rules, regulations, codes, plans, injunctions, orders,
decrees, rulings and charges thereunder), including without limitation
occupational health and safety regulations.
9.18 Intangible Assets. The Intangible Assets constitute all the know-how
and intellectual property necessary or otherwise used by Sellers for
the conduct of the Business as it is conducted on the Closing Date.
The use or other exploitation of the Intangible Assets in the manner
used by Seller in connection with the Business, to the Sellers'
Knowledge, does not and will not violate any rights of any third
parties. The fees, if any, necessary for upholding the Intangible
Assets have been duly paid. The Intangible Assets, to the Sellers'
Knowledge, are not subject to invalidity, cancellation or total or
partial nullification, and to Sellers' Knowledge, no facts exist that
would reasonably be thought to constitute a basis for the foregoing.
The Sellers are the sole and exclusive owners of the Intangible Assets
unless otherwise indicated in Exhibit 9.18 hereto, and have, unless
otherwise indicated in the Exhibit 9.18, the right to transfer the
Intangible Assets as contemplated by this Agreement free from any
Lien. To the Seller's knowledge, none of the Intangible Assets is
infringed by third parties.
9.19 Business Knowledge. The Sellers own all manufacturing, processing and
marketing know-how for the Sellers' entire previous and present
Products, and hold, to the extent that such manufacturing, processing
and marketing know-how has been reduced to writing, all documents
pertaining thereto (which documents will be delivered as described in
Section 2 of this Agreement).
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9.20 Protection of Confidential Information. The Sellers have imposed to
the Employees such obligations as to the treatment of confidential
information and trade secrets as set forth in the relevant Employment
Contracts. Sellers have not licensed software, or provided any
significant parts of software, included in the Intangible Assets to
any third party in source code format.
9.21 Interested Party Transactions. Except as listed in Exhibit 9.21, no
Managing Director, Supervisory Board member, Director or majority
shareholder of any Seller (nor any ancestor, sibling, descendant or
spouse of any of such persons, or any trust, partnership or
corporation in which any of such persons has an interest), has,
directly or indirectly, (i) an interest in any entity which furnished
or sold, or furnishes or sells, services or products relating to the
Business that the Sellers furnish or sell, or propose to furnish or
sell, or (ii) any interest in any entity that purchases from or sells
or furnishes to, the Sellers, any goods or services relating to the
Business or (iii) a beneficial interest in any Assigned Agreement;
provided, that ownership of no more than one percent (1%) of the
outstanding voting stock of a publicly traded corporation shall not be
deemed an "interest in any entity" for purposes of this Section 9.21.
9.22 Employee Matters.
(a) There are no obligations, agreements or commitments in relation
to the Transferred Employees other than those (i) reflected in
the Employment Contracts referred to in 6.1, or (ii) agreed upon
among the Sellers and the Transferred Employees between the date
hereof and the Closing Date with the prior written consent of the
Purchasers, or (iii) generally imposed by mandatory law, and
there are no other obligations, agreements or commitments with
regard to any Employees that will transfer to the Purchasers as a
result of the transactions contemplated by this Agreement. The
information regarding the Transferred Employees contained in
Exhibit 6.1 is true and correct.
(b) The Sellers (i) are in compliance in all material respects with
all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms
and conditions of employment and wages and hours, in each case,
with respect to Employees, (ii) have withheld and reported all
amounts required by law or by contract to be withheld and
reported with respect to wages, salaries and other payments to
Employees, (iii) are not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the
foregoing, and (iv) are not liable for any payment to any trust
or other fund governed by or maintained by or on behalf of any
governmental entity, with respect to unemployment compensation
benefits, social security or other benefits or obligations for
Employees (other than routine payments to be made in the Ordinary
Course of Business and consistent with past practice). There are
no pending or, to the Sellers' Knowledge, threatened or
reasonably anticipated claims or actions against the Sellers
under any worker's compensation policy, long-term disability
policy, or similar policy.
(c) At the Signing Date, no work stoppage or labor strike against any
member of the Sellers is pending, or to the Sellers Knowledge
threatened or reasonably anticipated. There are no actions,
suits, claims, labor disputes or grievances pending, or, to the
Sellers' Knowledge, threatened or reasonably anticipated
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relating to any labor, safety or discrimination matters involving
any Employee, including, without limitation, charges of unfair
labor practices or discrimination complaints, which, if adversely
determined, would, individually or in the aggregate, result in
any material Liability to the Purchasers. Neither Sellers nor any
of Subsidiaries have engaged in any unfair labor practices. The
Sellers are not bound by any collective bargaining agreement
(Betriebsvereinbarungen), other than those set out in Exhibit
9.22, or union contract with respect to Employees and no
collective bargaining agreement is being negotiated by the
Sellers, in each case relating to the Transferred Employees that
would result in any material Liability of the Purchasers on or
after the Closing Date.
(d) To the Sellers' Knowledge, no Employee is obligated under any
contract or subject to any judgment, decree or order of any court
or administrative agency that would interfere with such
Employee's efforts to promote the interests of the Business or
that would interfere with the Business. To the Sellers'
Knowledge, neither the execution nor delivery of this Agreement,
nor the carrying on of the Business as presently conducted or
proposed to be conducted nor any activity of the Employees in
connection with the carrying on of the Business as presently
conducted or currently proposed to be conducted, will conflict
with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract or Employment
Agreement under which any Employees are now bound.
9.23 Warranties; Indemnities. Except for general conditions of sale used by
the Sellers in the Ordinary Course of Business, no warranty or
indemnity has been given by the Sellers. There are no warranty and
indemnity claims in excess of $25,000 made against the Sellers in
existence at the Signing Date relating to the Products and to Sellers'
Knowledge there are no such indemnity claims threatened, except for
indemnity claims with respect to infringement of intellectual property
rights. The Sellers agree to indemnify the Purchasers from any Losses
arising from any infringement of any intellectual property right,
copyright, patent, xxxxx patent, design patent or trademark of any
third party caused by the Sellers prior to the Closing Date to the
extent claims have been served in writing within one (1) year after
the Closing Date, except for any indemnities related to the MPEG-LA
Consortium and/or the DV Consortium.
9.24 Taxes. The Sellers, to the extent such Taxes could affect Purchasers
ownership in the Acquired Assets or the operations of the Business,
have duly filed by the due date all tax returns and other reports
required under the applicable laws to be filed with tax and other
authorities, paid all due taxes, tax prepayments, social security
charges and other public dues, retained all taxes, social security
charges and other charges to be retained and paid them by the due date
to the respective recipient and paid all related delay charges and
penalties, if any.
9.25 Insurance. The Sellers carry adequate insurance against all risks that
a conscientious businessman usually covers. The insurance contracts
are in full force and effect and all premiums due until the Closing
Date have been paid and Sellers are otherwise in material compliance
with the terms of such policies and bonds (or other policies and bonds
providing substantially similar insurance coverage). Since
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the Most Recent Balance Sheet Date, no material insurable events of
damage or damages have arisen at the Seller which were not covered by
insurance. There is no claim by the Sellers pending under any of such
policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. To the
Sellers' Knowledge no termination of, or material premium increase
with respect to, any of such policies has been threatened.
9.26 No Illegal Payments, Etc. To the Sellers' Knowledge, none of the
Sellers nor any of their respective officers, employees, agents or
Affiliates has: (a) directly or indirectly given or agreed to give any
illegal gift, contribution, payment or similar benefit to any
supplier, customer, governmental official or employee or other person
who was or is in a position to help or hinder the Business (or assist
in connection with any actual transaction) or made or agreed to make
any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other Person, to any candidate for federal,
state, local or foreign public office (i) which may subject the
Sellers to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or (ii) the noncontinuation of
which has had or might have, individually or in the aggregate, an
adverse impact on the Business, or (b) established or maintained any
unrecorded fund or asset or made any false entries on any books or
records for any purpose.
9.27 Material Adverse Effect. To Sellers' Knowledge, there are no
particular circumstances that could in the future materially adversely
affect the Business. To Sellers' Knowledge there are no facts or
circumstances which could result in any restriction, impediment or
cessation of the manufacture and/or marketing of any material product
presently manufactured and/or marketed by the Seller in the Business,
except for changes in the business relationship with Matrox Inc.,
Canada, which may occur as a result of the transactions contemplated
by this Agreement or its disclosure or such facts and circumstances
that are not particularly relating to the Business relations, but may
affect the economic situation or the business field in which the
Business is active in general.
10 Representations and Warranties of the Purchasers, Guarantee of Pinnacle,
Inc.
In concluding this Agreement, the Sellers rely on the correctness of the
representations and warranties made by the Purchasers and Pinnacle Inc.
hereinafter. The Purchasers and Pinnacle, Inc. represent expressly and
warrant as a guaranteed quality (with the legal consequences as
conclusively set forth in Section 11 that the following representations and
warranties are correct, unless otherwise provided hereunder on the date
hereof and the Closing Date and all dates after the Closing Date until full
payment of any outstanding amounts under the Purchase Price pursuant to
Section 7:
10.1 Organization and Authority. The Purchasers and Pinnacle Inc. are
companies duly incorporated, validly existing and in good standing
under the laws of their respective jurisdiction and have the corporate
power to own their respective properties and to carry on their
respective businesses as now being conducted. Each of the Purchasers
has all requisite power and authority to enter into this Agreement and
any Related Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.
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10.2 Execution and Delivery. This Agreement and any Related Agreements to
which any Purchaser or Pinnacle Inc. is a party have been duly
executed and delivered by such Purchaser and, assuming the due
authorization, execution and delivery by the other Parties hereto and
thereto, constitute the valid and binding obligation of such Purchaser
or Pinnacle Inc. enforceable in accordance with their respective
terms, subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and to rules of law
governing specific performance, injunctive relief or other equitable
remedies.
10.3 Compliance with Corporate Requirements. The execution and delivery of
this Agreement and any Related Agreements to which it is a party by
any of the Purchasers or Pinnacle Inc. do not, and, the consummation
of the transactions contemplated hereby and thereby will not, conflict
with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of
termination, cancellation, modification or acceleration of any
obligation or loss of any benefit under (i) any provision of the
charter documents or Bylaws (or their equivalent) of any such Seller,
or (ii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to any such Purchaser or its properties or
assets.
10.4 Required Consents. Each of the Purchasers and Pinnacle Inc. has
obtained all necessary corporate consents and taken all necessary
corporate action, if any, required on the Sellers side for the
consummation of the transactions contemplated by this Agreement.
Except as set forth in Section 14 no consent, waiver, approval, order
or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other U.S. or German
federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission ("Governmental Entity") or any
third party, is required by or with respect to any of the Purchasers
in connection with the execution and delivery of this Agreement and
any Related Agreements to which any of the Purchasers or Pinnacle Inc.
is a party or the consummation of the transactions contemplated hereby
and thereby.
10.5 Correct Information. The information contained in the Exhibits of this
Agreement, relating to circumstances of the Purchasers and Pinnacle
Inc., is complete and correct.
10.6 Pinnacle Shares. The Pinnacle Shares are duly authorized and have been
reserved for issuance in accordance with this Agreement. When issued
in accordance with this Agreement, the Pinnacle Shares will be duly
issued and outstanding, fully paid and nonassessable.
10.7 Required Filings. Pinnacle Inc, is a public reporting issuer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and has
made all required filings thereunder by the required filing date and
in accordance with the rules and regulations of the Securities and
Exchange Commission ("SEC"). None of such filings, including the
financial statements contained therein, or the filings made by
Pinnacle Inc. under the Securities Act of 1933, as amended, contained
a material misstatement or omitted to state a material fact. The Form
S-3 to be filed by Pinnacle Inc. in accordance with this Agreement and
the Registration Rights Agreement attached hereto will not contain a
material misstatement or omit to state any material fact.
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10.8 Absence of Material Adverse Effect. Since 30 June 2001, there has not
been any circumstance, change in or effect upon Pinnacle Inc. which
has or could reasonably be expected to have a Material Adverse Effect.
Pinnacle Inc. has no present plans or intention to make any
pre-announcement with respect to its financial results for the present
fiscal quarter or any announcement to the effect that it expects its
financial results for future fiscal quarters to be less than consensus
street estimates.
Pinnacle, Inc. hereby further undertakes to act as an absolute guarantor
(selbstschuldnerischer Xxxxx) for the obligations and liabilities of
Pinnacle Germany and Pinnacle KG under Sections 7, 10 and 11 of this
Agreement.
11 Performance and Liability
11.1 Breach of Warranties. In case of violation of any of the
representations or warranties by a Party (the "Warranting Party")
which have an adverse effect on, and cause damages to, (i) the
Business or the Acquired Assets in the case of Sellers'
representations and warranties, or (ii) the Sellers in the case of
Purchasers representations and warranties, the Warranting Party shall
be jointly and severally liable to put the other Parties (the "Damaged
Party") in the position they would be in had the representation or
warranty not been violated. In case the Warranting Party is unable to
cure the defect or violation, the Damaged Party shall be compensated
by an amount in cash which corresponds to the damage within the sense
of Section 249 Sentence 2 German Civil Code.
11.2 Other Claims and Remedies. The Parties shall not have any other claims
or remedies than the claims and remedies defined in Section 11.1 in
case of a breach of any representation and warranty, and no further
statements, representations and warranties or guarantees are made, or
deemed to be made, by either Party, other than those expressly and
conclusively set forth in Sections 9 and 10; provided, that this
Section 11 shall not limit Purchasers' remedies for indemnification
provided for in Sections 4.5 and 5 of this Agreement, or claims and
remedies of either Party as may apply under mandatory law for willful
or fraudulent breaches of representations or warranties by the other
Party and, for the avoidance of doubt, the right of any party to this
Agreement to rescind this Agreement pursuant to (S)326 German Civil
Code in the event of a default of another party with its obligations
under this Agreement. Any other claims or rights of the Purchasers in
respect of the Business and the Acquired Assets, circumstances
(financial, legal or otherwise), results and or its operations,
whether by statute or contract or any other legal basis, shall to the
extent legally possible, i.e. except for claims based upon willful
misconduct (Vorsatz oder Arglist), be excluded and waived. Without
limiting the foregoing exclusion and waiver, the Purchasers shall, in
particular, not have the right to rescind this Agreement (Recht auf
Wandelung/Rucktritt), to reduce the purchase price (Recht auf
Minderung), to claim damages for incorrect assurances (Schadensersatz
wegen unrichtiger Zusicherung), to avoid the Agreement or to request
damages because of lack of essentiality (Fehlen einer wesentlichen
oder zugesicherten oder garantierten Eigenschaft) or in the event of
culpa in contrahendo, or to rescind or amend this Agreement for
frustration of contract (Wegfall der Geschaftsgrundlage) or for any
other reason whatsoever.
11.3 Limitation of Claims. The period of limitation for all claims of the
Purchasers pursuant to Section 11.1 and 15.1 of this Agreement shall
run until, and any claims
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shall be time barred (verjahrt), two (2) years from the Closing Date.
This period of limitation shall not apply to other remedies available
to the Purchasers or the Sellers, including without limitation
remedies for breaches of covenants and for indemnification provided by
this Agreement. All such claims as well as any other claims of either
Party under or in relation to this Agreement, whether by law, contract
or otherwise, shall be time barred (verjahren) three (3) years after
the relevant Party becomes aware of the relevant claim.
11.4 Due Diligence. No Party shall be liable to the other Party for any
claims, if the other Party or its advisors had knowledge of such
breach within the sense of Section 460 German Civil Code. The Sellers
and the Purchasers have jointly evaluated the Inventory as reflected
in the accounts as of August 31, 2001.
11.5 De minimis threshold. Purchasers shall have claims based upon a breach
of any representation or warranty as set out in Section 9 only if the
individual claim exceeds an amount of (euro) 25,000 or the aggregate
of all claims exceeds an amount of (euro) 100,000 at which point
Purchasers shall be entitled to be compensated for all claims of
breaches of representations and warranties contained in Section 9 of
this Agreement.
11.6 Cap on Claims. All claims of the Purchasers under or in connection
with Section 9, except for any willful or fraudulent (Vorsatz oder
Arglist) breaches of the representations and warranties contained in
Section 9 of this Agreement, shall be limited to an aggregate amount
of (euro) 3,500,000.
12 Covenants
12.1 Confidentiality. For a period commencing on the Signing Date and
ending five (5) years later, the Sellers (and their successors and
assigns), Xx. Xxxxxxxx Xxxx and Xxx. Xxxxxx Xxxxxx, for the avoidance
of doubt individually and not jointly and severally, shall keep
confidential all matters related to the Business, in particular all
business and trade secrets, and not disclose such matters and secrets,
directly or indirectly, to any third party nor to cause such
disclosure by third parties nor to abet or justify such disclosure nor
to use such matters or secrets for themselves.
12.2 Non-Solicitation. For a period commencing on the Closing Date and
ending thirty (30) months later, the Sellers, Xx. Xxxxxxxx Xxxx and
Xxx. Xxxxxx Xxxxxx, for the avoidance of doubt individually and not
jointly and severally, shall not (nor shall it permit any of its
Subsidiaries or Affiliates) directly or indirectly, without the prior
written consent of the Purchasers, cause or influence any Transferred
Employees to work in any way whatsoever for any of the Sellers
(whether as an employee, agent, consultant, advisor, independent
contractor, proprietor, partner, officer, director or otherwise), for
an enterprise in which any one of them holds an interest or for a
competitor, or to terminate an existing relationship with the
Purchasers (or its consolidated Subsidiaries).
12.3 Non-Competition.
(a) For a period commencing on the Closing Date and ending two (2)
years later, the Sellers (acting jointly - gesamtschuldnerisch -
with respect to one other) and Xx. Xxxxxxxx Xxxx (acting
individually - "einzelschuldnerisch") and Xxx. Xxxxxx Xxxxxx
(acting individually - "einzelschuldnerisch") shall not (nor
shall they permit any of their Subsidiaries or Affiliates)
directly or indirectly, without the
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prior written consent of the Purchasers (i) manufacture,
distribute or render any products or services which are of the
same kind as, or competitive with, products or services
manufactured, distributed or rendered by the Business in any part
of the world where the Business was conducted (a "Competing
Business"); (ii) assist third parties in any way whatsoever,
directly or indirectly, in the manufacture, distribution or
rendering of such products or services of a Competing Business;
(iii) hold in any way whatsoever, directly or indirectly, an
interest in a company or other entity that constitutes a
Competing Business other than an interest of less than 5% in a
publicly quoted company; or (iv) participate in the financing,
operation, management or control of a Competing Business. For the
Avoidance of doubt, the activities of Xx. Xxxxxxxx Xxxx, Xxx.
Xxxxxx Xxxxxxx, and TV-Server AG in the field of technologies and
services for interactive television shall not be restricted by
the foregoing non-competition obligation.
(b) In the event that the provisions of this Section 12.3 are deemed
to exceed the time, geographic or scope limitations permitted by
applicable law, then such provisions shall be amended to the
maximum time, geographic or scope limitations, as the case may
be, permitted by applicable law.
(c) For the purposes of this Section 12, the Sellers, Xx. Xxxxxxxx
Xxxx and Xxx. Xxxxxx Xxxxxx, acknowledge that (i) the goodwill
associated with the Business and customer relationships prior to
the Acquisition is an integral component of the value of the
Business to the Purchasers and is reflected in the Purchase Price
for the Acquisition to be received by the Sellers and (ii) the
Transferred Agreements are necessary to preserve the value of the
Business, including the goodwill and customer relationships, for
the Purchasers following the Acquisition. The Sellers also
acknowledge that the limitations of time, geographic scope and
scope of activity agreed to in this Agreement are reasonable
because, among other things, (x) the Sellers and their
subsidiaries and the Purchasers are engaged in a highly
competitive industry (y) management of the Sellers and their
subsidiaries have unique access to, and will continue to have
access to, the trade secrets and know-how of the Sellers and
their Subsidiaries, including without limitation, the plans and
strategy (and in particular, the competitive strategy) of the
Sellers and its Subsidiaries and (z) the Sellers are receiving
significant consideration in connection with the Acquisition.
13 Compliance with the Securities Laws
13.1 Securities Act Exemption. Each of the Sellers has been advised that
the Pinnacle Shares issued to the Sellers pursuant to this Agreement
will be issued as securities to the Sellers in a private placement
exempt from the registration requirements of Section 5 of the
Securities Act, as set forth in Section 4(2) thereof, and may not be
offered or sold except pursuant to an exemption or pursuant to an
effective registration statement under the Securities Act.
13.2 Legends. Pinnacle, Inc. will give stop transfer instructions to its
transfer agent with respect to Pinnacle Shares received by the Sellers
pursuant to this Agreement and
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there will be placed on each certificate representing such Pinnacle
Shares, or any substitutions therefor, legends stating in substance:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN
EFFECTIVE REGISTRATION STATEMENT THEREOF, OR EXEMPTION
THEREUNDER, UNDER SUCH ACT OR IN COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT.
The legend set forth above shall be removed (by delivery of a
substitute certificate without such legend) and Pinnacle, Inc. agrees
to so instruct its transfer agent at such time as a registration
statement on Form S-3 covering such Pinnacle Shares is effective, or
at the request of the Sellers when one or more of the conditions set
forth in clauses (w), (x), (y) and (z) of Subsection 12.3 hereof shall
have occurred.
13.3 Representations Regarding Securities Laws Matters. The Sellers agree
not to sell, transfer or otherwise dispose of any Pinnacle Shares
issued to the Sellers pursuant to this Agreement unless such sale,
transfer or other disposition is made (w) in conformity with the
requirements of Rule 144 promulgated under the Securities Act; or (x)
pursuant to a resale registration statement on Form S-3 filed by
Pinnacle, Inc. with the Securities and Exchange Commission (the "SEC")
which is then in effect; or (y) upon delivery to Pinnacle, Inc. of a
written opinion of counsel, reasonably acceptable to Pinnacle, Inc. in
form and substance, that such sale, transfer or other disposition is
otherwise exempt from registration under the Securities Act; or (z) an
authorized representative of the SEC shall have rendered written
advice to the Sellers wishing to effect such sale, transfer or
disposition (sought by the Sellers or counsel thereto, with a copy
thereof and of all other related communications delivered to Pinnacle,
Inc.) to the effect that the SEC would take no action or that the
staff of the SEC would not recommend that the SEC take action, with
respect to the proposed sale, transfer or other disposition, if
consummated. The Sellers acknowledge and understand that Pinnacle,
Inc. is relying on the written representations made by the Sellers in
the Investment Representation Statements in the form attached hereto
as Exhibit 13.3 executed by each of the Sellers.
14 Closing Date Deliveries
14.1 Sellers' Deliveries
On the Closing Date, the Sellers shall deliver, or cause to be
delivered, to the Purchasers, the following:
(a) such instruments of sale, transfer, conveyance and assignment as
the Purchasers and their counsel may reasonably request to give
effect to the transfer of the Acquired Assets as contemplated by
this Agreement;
(b) approvals, consents, waivers and authorizations as set forth in
Exhibit 9.4;
(c) all other documents, certificates, instruments or writings
required to be delivered by the Sellers on the Closing Date in
order to consummate the transactions contemplated by this
Agreement;
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14.2 Purchasers' Deliveries
On the Closing Date, the Purchasers and Pinnacle, Inc. shall deliver,
or cause to be delivered, to the Sellers, (without in any way
affecting the effectiveness of this Agreement upon signing) the
following:
(a) internal approval by the Board of Directors of each of Pinnacle,
Inc., Pinnacle KG and Pinnacle Germany;
(b) all other documents, certificates, instruments or writings
required to be delivered by the Purchasers on the Closing Date in
order to consummate the transactions contemplated by this
Agreement;
(c) reassignment of any receivables assigned to Purchasers pursuant
to the Global Assignment Agreement as reflected in Section 7.2a.
15 Arrangements concerning the Relationship of the Parties until and after the
Closing Date
15.1 Conduct of the Business until Closing Date. Between the date hereof
and the Closing Date, except as otherwise agreed to in advance and in
writing by Purchasers, Sellers covenant and agree with Purchasers as
follows:
(a) Sellers shall operate the Business diligently and in good faith
and only in the ordinary course, in the manner as heretofore
conducted and consistent with Sellers' past management and
business practices.
(b) Sellers shall use reasonable efforts to (i) maintain, preserve,
renew and keep in full force and effect the existence, rights and
franchises of the Business; (ii) maintain the Acquired Assets in
good working order; (iii) not allow the disposal or lapse of any
Intangible Assets; (iv) preserve for Purchasers Sellers' present
relationships with its suppliers, distributors, vendors,
manufacturers, customers, communities and others having business
relations with Sellers' in the Business; and (v) not allow any
event or occurrence within Sellers' control which might,
individually or in the aggregate, have a Material Adverse Effect
on Seller.
(c) Sellers shall not terminate, amend or otherwise modify any
Transferred Agreement.
(d) Sellers shall not create any indebtedness that would constitute
an liability or obligation to be assumed by the Purchasers.
(e) Sellers will not act or omit to act, or consent to any act or
omission to act by another party, which will cause a breach or
violation of, or default under, any Transferred Agreements or
other commitments or other obligations adversely affecting the
Acquired Assets or the Business.
15.2 Termination of Agreement. The Purchasers may terminate this Agreement
by giving written notice to the Sellers at any time prior to and at
the date of consummation of this agreement at the Closing Date if
there has been any event which by itself or together with other events
has a Material Adverse Effect on the Business. For the purposes of
this Section 15.2 only, if (i) at least two of the Key Employees
listed in Exhibit 15.2a or (ii) at least 6 of the R&D Employees listed
in Exhibit 15.2b object to be transferred to Purchasers or do not
agree to be
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transferred to Pinnacle Germany according to (S)613a BGB prior to
Closing Date or Xxxx Xxxxxxxxx does not agree to continue to work for
the Business, this shall be deemed to have a Material Adverse Effect
on the Business. The Sellers may terminate this Agreement by giving
written notice to the Purchasers (i) at any time prior to the date on
which the Purchase Price has been paid in full, in the event of
insolvency proceedings of the Purchasers or Pinnacle, Inc., or in the
event of a default pursuant to (S)326 German Civil Code, or, (ii) at
any time prior to the Closing Date, if any other event which by itself
or together with other events has a Material Adverse Effect on
Pinnacle, Inc. has occurred.
15.3 Sellers' Further Deliveries. Any time, and from time to time after the
Closing Date, at the reasonable request of the Purchasers and without
further consideration, the Sellers will execute and deliver such other
instruments of sale, transfer, conveyance, assignment and confirmation
and take such action as the Purchasers may reasonably determine is
necessary to transfer, convey and assign to Purchasers and to confirm
Purchasers' title to or interest in the Acquired Assets, to put
Purchasers in actual possession and in operating control thereof, to
assist Purchasers in exercising all rights in respect thereto and to
ensure the transition of the Business from the Sellers to the
Purchasers in an orderly and smooth fashion.
15.4 Purchasers' Further Deliveries. Any time, and from time to time after
the Closing Date, at the reasonable request of the Sellers and without
further consideration, the Purchasers will execute and deliver such
other instruments of assumption and confirmation and take such action
as Sellers may reasonably determine is necessary to ensure the
transition of the Business from the Sellers to the Purchasers in an
orderly and smooth fashion.
15.5 Publicity. No announcement of any kind to the media or any other
indefinite group of persons shall be made before the Closing Date in
respect of the subject matter of this Agreement except as specifically
agreed between the Sellers and the Purchasers or if such announcement
is required by law or administrative or judicial order.
15.6 Notice of Acquisition. Upon the request of the Purchasers, the Sellers
will join the Purchasers in sending out on or after the Closing Date a
notice in a mutually approved form to all suppliers, agents,
distributors, clients and customers advising them of the transfer of
the Business.
15.7 Employee Matters. Until the Closing Date, Sellers shall not (without
the prior written consent of Purchasers) modify or terminate any
Employment Agreement or enter into any new employment agreement.
16 Miscellaneous
16.1 Notice. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt, or, if earlier,
(a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage
prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business
day after the business day of facsimile transmission, if delivered by
facsimile transmission with receipt of transmission confirmation and
with a copy by first class mail, postage prepaid, and shall be
addressed to the intended recipient as set forth below:
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If to Pinnacle, Inc.:
Pinnacle Systems, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
U.S.A.
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-1050
U.S.A.
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
And a copy to:
Linklaters Xxxxxxxxx & Xxxxxx
Xxxxxxx Xxxxxxxxxxx 00,
X-00000 Xxxxxxxxx am Main
Postfach 17 01 11
D-60075 Frankfurt am Main
Attention: Xxxx Xxxxxxx
Telephone: (49-69) 7-10-03-0
Facsimile: (00-00) 0-00-00-000
If to Pinnacle Germany:
Pinnacle Systems GmbH
Xxxxxxxxxxx Xxxxxxx 0x, 00000
Xxxxxxxxxxxx, Xxxxxxx
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-1050
U.S.A.
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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And a copy to:
Linklaters Xxxxxxxxx & Xxxxxx
Xxxxxxx Xxxxxxxxxxx 00,
X-00000 Xxxxxxxxx am Main
Postfach 17 01 11
D-60075 Frankfurt am Main
Attention: Xxxx Xxxxxxx
Telephone: (49-69) 7-10-03-0
Facsimile: (00-00) 0-00-00-000
If to Fast, Inc.:
Fast Multimedia Holding Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
X.X.X.
With a copy to:
SJ Xxxxxx Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx-Xxxxxxxx-Str. 5
81675 Munchen
Attention: Xxxxxx Xxxxx and Xx. Xxxxxxxxx Xxxxxxx
Telephone: (0000-00-00000-0)
Facsimile: (0049-89-89081-100)
If to FAST Germany:
Fast Multimedia AG
Xxxxxxxxxxxxxx. 00-00, X-00000
Xxxxxxx, Xxxxxxx
With a copy to:
SJ Xxxxxx Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx-Xxxxxxxx-Str. 5
81675 Munchen
Attention: Xxxxxx Xxxxx and Xx. Xxxxxxxxx Xxxxxxx
Telephone: (0000-00-00000-0)
Facsimile: (0049-89-89081-100)
16.2 Notary Fees. The Notary fees connected with the notarial recording of
this Agreement shall be borne by the Purchasers. Apart therefrom, each
Party shall bear its own costs and the costs of its advisers and
auditors.
16.3 Amendment. Changes and amendments to this Agreement as well as
declarations to be made hereunder shall be valid only if made in
writing unless a notarial deed is legally required. This shall also
apply to any change of this provision.
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16.4 Severability. If a provision of this Agreement should be or become
invalid or not contain a necessary regulation, the validity of the
other provisions of this Agreement shall not be affected thereby. The
invalid provisions shall be deemed to be replaced and the gap be
filled by a legally valid arrangement which corresponds as closely as
possible to the intentions of the Parties or what would have been the
intentions of the Parties according to the aim and purpose of this
Agreement if they had recognised the gap.
16.5 Headings and Exhibits. The Exhibits to this Agreement shall form an
integral part of this Agreement. The headings in this Agreement shall
only serve the purpose of easier orientation and are of no consequence
for the contents and interpretation of this Agreement. Statements in
one provision of, or Exhibit to, this Agreement shall be deemed to
have been made also for the purposes of all other provisions of, and
Exhibits to, this Agreement.
16.6 Further Assurances. The Parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and
things, all as the other Party may reasonably request for the purpose
of carrying out the intent of this Agreement and the documents
referred to in this Agreement.
16.7 Governing Law. This Agreement shall be governed by German law.
16.8 Jurisdiction. The Courts of Frankfurt am Main shall have exclusive
jurisdiction for all disputes arising out of or in connection with
this Agreement, including disputes about its validity.
16.9 Entire Agreement. This Agreement, the schedules and exhibits hereto,
and the documents and instruments and other agreements among the
Parties hereto referenced herein constitute the entire agreement among
the Parties with respect to the subject matter hereof and supersede
all prior agreements and understandings, both written and oral, among
the Parties with respect to the subject matter hereof.
16.10 Assignment. No Party may, directly or indirectly, in whole or in
part, neither by operation of law or otherwise, assign or transfer
this Agreement or delegate any of its obligations under this Agreement
without the other party's prior written consent. Any attempted
assignment, transfer or delegation without such prior written consent
will be void. Notwithstanding the foregoing, a Party, or its permitted
successive assignees or transferees, may assign or transfer this
Agreement or delegate any rights or obligations hereunder without
consent: (1) to any entity controlled by, or under common control
with, such Party, or its permitted successive assignees or
transferees; or (2) in connection with a merger, reorganization,
transfer, sale of assets or product lines, or change of control or
ownership of such Party or its permitted successive assignees or
transferees subject however to the assignor or transferor acting as
guarantor for all obligations of the assignee or transferee vis-a-vis
the other contractual parties. Without limiting the foregoing, this
Agreement will be binding upon and inure to the benefit of the Parties
and their permitted successors and assigns.
16.11 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the Parties
hereto and their respective successors and permitted assigns.
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16.12 Extension; Waiver. Purchasers on the one hand and Sellers on the
other hand may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations of the other Parties hereto,
(ii) waive any inaccuracies in the representations and warranties made
to such Parties contained herein or in any document delivered pursuant
hereto, and (iii) waive compliance with any of the agreements or
conditions for the benefit of such Parties contained herein. Any
agreement on the part of a Party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such Party.
16.13 The Notary shall send certified copies of this deed to the Persons
listed in section 16.1 above.
16.14 This agreement shall be executed in the English language only.
16.15 Nach Uberzeugung des beurkundenden Notars und nach Bestatigung aller
unterzeichneten Urkundsbeteiligten sind diese der englischen Sprache
hinreichend kundig.
16.16 All Exhibits are well known to all parties.
The Exhibits 7.2 is attached to this agreement for the purpose of
prove and evidence.
Reference is made to the Exhibits 8, 13.3 - they form an integral part
of this Agreement ((S)9 Abs. 1 Satz 2 BeurkG).
Reference is also made to the Exhibits 2.1a, 2.1b, 2.3a, 2.3b,
2.4, 4.1, 4.2, 6.1, 6.3, 9.4, 9.8, 9.14, 9.18, 9.21, 9.22, 15.2a and
15.2b - they also form an integral part of this Agreement ((S)14 Abs.
1 BeurkG) and are signed on each page by the parties. The parties
waive in reading this documents.
[Remainder of this page intentionally left blank]
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PURCHASERS
PS MIRO HOLDINGS INC. & CO. KG,
a partnership under the laws of Germany
By: PS MIRO HOLDINGS INC.
As General Partner of PS Miro
Holdings Inc. & Co. KG
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President, Finance and Administration
------------------------------------------
and Chief Financial Officer
------------------------------------------
PINNACLE SYSTEMS GMBH, a German corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: General Manager
------------------------------------------
For the purposes of acting as guarantor for the Purchasers' obligations to pay
the consideration pursuant to Section 7 and the Purchasers' Representations and
Warranties pursuant to Sections 10 and 11 and with respect to its express
obligations according to Sections 8 and 13:
PINNACLE SYSTEMS, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President, Finance and Administration
------------------------------------------
and Chief Financial Officer
------------------------------------------
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"SELLERS" FAST MULTIMEDIA HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxxx Xxxx
---------------------------------------------
Name: Xxxxxxxx Xxxx
-------------------------------------------
Title: Chief Executive Officer
------------------------------------------
FAST MULTIMEDIA AG, a German corporation
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------------------
Name: Xxxxxx Xxxxxxxxx
-------------------------------------------
Title: Chief Executive Officer
------------------------------------------
For the purposes of Section 12 only:
XXXXXXXX XXXX
In his personal capacity
/s/ Xxxxxxxx Xxxx
-------------------------------------------------
XXXXXX XXXXXXX
In her personal capacity
By Power of Attorney to Xxxxxxxx Xxxx
/s/ Xxxxxxxx Xxxx
-------------------------------------------------
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