EXHIBIT 99.2
Notarial Deed A.Prot. 2003/[ ]
dated 30 June 2003
of the Notary Xx. Xxxxxxxxx Xxxxxxx, Basel/Switzerland
NOTARIAL DEED
SHARE SALE AND TRANSFER AGREEMENT
Negotiated at Basel/Switzerland this 30th (thirtieth) day of June 2003 (two
thousand and three).
Before me, the undersigned Notary Public
XX. XXXXXXXXX XXXXXXX
at Basel/Switzerland appeared today:
1. Xx. Xxx Xxxxxxxxxxx, born on July 9, 1970, Rechtsanwalt, with business
address at Xxxxxxxxx Xxxxx 0, 00000 Xxxxxx, identified by his German
identity card, who declared that he is not acting in his own name but
as attorney-in-fact solely for and on behalf of:
1.1 Alliance Holding Company, 0000 Xxxxx Xxxxxxx Xxxx, Xxx Xxxxx, XX
00000-0000, U.S.A.,
1.2 Alliance Gaming Corporation, 0000 Xxxxx Xxxxxxx Xxxx, Xxx Xxxxx, XX
00000-0000, U.S.A.,
1.3 Alliance Automaten GmbH & Co. KG, Maybachufer 00 - 00, 00000 Xxxxxx,
Xxxxxxx,
1.4 Alliance Automaten Xxxxxxxxxxx XxxX, Xxxxxxxxxxx 00 - 00, 00000 Xxxxxx,
Xxxxxxx,
1.5 Bally Xxxxx Automaten GmbH, Maybachufer 00 - 00, 00000 Xxxxxx, Xxxxxxx,
and
1.6 Bally Xxxxx Vertriebs GmbH, Xxxxxxxxxxxxxxx 00, 00000 Xxxxxxxx, Xxxxxxx
on the basis of the respective powers of attorney, the originals of which are
attached hereto,
2. Xxxxx Xxxxxx, born on June 18, 1971, Rechtsanwalt, with business
address at Xxxxxxx Xxxxxxxxxxx 00, 00000 Xxxxxxxxx/Xxxx, Xxxxxxx,
identified by his German identity card, who declared that he is not
acting in his own name but as attorney-in-fact solely for and on behalf
of
2.1 Xxxxx 00-000 XxxX, with its seat in Munich, registered in the
commercial register of the local court in Munich under HRB 144382,
2.2 Blitz 03-1066 GmbH, with its seat in Munich, registered in the
commercial register of the local court in Munich under HRB 147312,
on the basis of the respective powers of attorney, the originals of which have
been presented to the notary and copies of which are herewith certified and
attached hereto.
The Notary explained the provisions of Xxxxxxx 000 Xxxxxxxxx 0 Xx. 0 of the
Introductory Act of the Canton Basel-City relating to the Swiss Civil Code
(Einfuhrungsgesetz zum Zivilgesetzbuch), which provision corresponds to the
so-called Vorbefassungsverbot within the meaning of Section 3 Paragraph 1 No. 7
German Notarization Act (Beurkundungsgesetz). The Notary states that he himself
and his law firm have not been involved in the matter at hand within the meaning
of said provisions. On being questioned as to whether there had been any prior
involvement of the Notary within the meaning of the above provisions, the
persons appearing affirmed that this was not the case.
The persons appearing requested that their declarations be recorded in the
English language. The Notary has a good command of the English language. At his
request, the persons appearing herein confirm for the record that they have a
good command of the English language sufficient to follow and fully comprehend
the recorded text, a statement which coincides with the Notary's impression
gained by conversing with them in that language.
The persons appearing thereafter requested the Notary to notarize the following
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SHARE SALE AND TRANSFER AGREEMENT
(the "AGREEMENT")
by and among
1. Alliance Holding Company
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
U.S.A.
(hereinafter referred to as the "SELLER")
and
2. Alliance Gaming Corporation
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
U.S.A.
(hereinafter referred to as the "GUARANTOR")
and
3. Alliance Automaten GmbH & Co. XX
Xxxxxxxxxxx 00 - 00
00000 Xxxxxx
Xxxxxxx
(hereinafter referred to as "KG")
and
4. Alliance Automaten Xxxxxxxxxxx XxxX
Xxxxxxxxxxx 00 - 00
00000 Xxxxxx
Xxxxxxx
(hereinafter referred to as "VERWALTUNGS")
and
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5. Bally Xxxxx Automaten GmbH
Xxxxxxxxxxx 00 - 00
00000 Xxxxxx
Xxxxxxx
(hereinafter referred to as "AUTOMATEN")
and
6. Bally Xxxxx Vertriebs GmbH
Xxxxxxxxxxxxxxx 00
00000 Xxxxxxxx
Xxxxxxx
(hereinafter referred to as "VERTRIEBS")
and
7. Blitz 02-099 GmbH
c/o Xxxxx Xxxxxxx
-----------------------------
XX Xxxxxx 0
00000 Xxxxxx
Xxxxxxx
(hereinafter referred to as the "PURCHASER 1")
8. Blitz 03-1066 GmbH
c/o Xxxxx Xxxxxxx
-----------------------------
XX Xxxxxx 0
00000 Xxxxxx
Xxxxxxx
(hereinafter referred to as the "PURCHASER 2")
(Purchaser 1 and Purchaser 2 are hereinafter collectively referred to
as the "PURCHASERS",and each of them individually as a "PURCHASER")
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TABLE OF CONTENTS
CONTENT PAGE
Index of Definitions................................................................................................... 9
Index of Exhibits...................................................................................................... 12
Recitals............................................................................................................... 14
1. Object of Sale and Purchase; Transaction Structure......................................................... 15
1.1 THE KG INTEREST AND THE VERWALTUNGS SHARE.................................................................. 15
1.2 VERTRIEBS SHAREHOLDER LOAN................................................................................. 15
1.3 TRANSACTION STRUCTURE...................................................................................... 15
2. Interests in Other Entities; Existing Security and Collateral.............................................. 16
2.1 INTERESTS IN OTHER ENTITIES................................................................................ 16
2.2 CERTAIN TERMS DEFINED...................................................................................... 17
2.3 EXISTING SECURITY AND COLLATERAL........................................................................... 17
3. Matters Relating to BGI.................................................................................... 18
3.1 RESPONSIBILITY............................................................................................. 18
3.2 CLAIMS OF BALLY XXXXX GROUP ENTITIES AGAINST BGI........................................................... 18
4. Sale, Purchase and Transfer of the KG Interest and the Verwaltungs Share................................... 19
4.1 SALE AND PURCHASE.......................................................................................... 19
4.2 CONDITION PRECEDENT........................................................................................ 19
4.3 PARTNERSHIP ACCOUNTS; RIGHTS TO PROFITS.................................................................... 19
5. Profit from IP Transaction................................................................................. 20
6. Payment or Sale and Purchase of Intercompany Accounts Receivable........................................... 20
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6.1 PAYMENT OF INTERCOMPANY ACCOUNTS RECEIVABLE................................................................ 20
6.2 SALE AND PURCHASE.......................................................................................... 20
6.3 TAX GUARANTEE AND ESCROW................................................................................... 21
7. Share Purchase Price....................................................................................... 22
7.1 PURCHASE PRICE FOR THE KG INTEREST AND THE VERWALTUNGS SHARE............................................... 22
7.2 GUARANTEE FOR THE PURCHASE PRICE........................................................................... 22
7.3 TREATMENT OF PAYMENTS...................................................................................... 22
8. Closing.................................................................................................... 23
8.1 DEFINITION................................................................................................. 23
8.2 TRANSACTIONS IMMEDIATELY FOLLOWING THE CLOSING............................................................. 23
8.3 RIGHTS OF RESCISSION....................................................................................... 23
9. Seller's Representations................................................................................... 25
9.1 PRINCIPLE.................................................................................................. 25
9.2 SELLER'S REPRESENTATIONS SPECIFIED......................................................................... 26
9.3 SELLER'S KNOWLEDGE......................................................................................... 32
10. Content and Nature of Seller's Representations; Remedies................................................... 32
10.1 CONTENT AND NATURE OF SELLER'S REPRESENTATIONS............................................................. 32
10.2 RESTITUTION IN KIND; MONETARY DAMAGES...................................................................... 32
10.3 LIMITATION PERIOD.......................................................................................... 34
10.4 THRESHOLDS FOR AND CAPS ON SELLER'S LIABILITY.............................................................. 34
10.5 GUARANTOR'S SURETYSHIP..................................................................................... 35
10.6 INFORMATION AND PARTICIPATION RIGHTS....................................................................... 36
10.7 NO FURTHER LIABILITY....................................................................................... 36
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10.8 CONTRACT BASIS............................................................................................. 36
11. Tax Indemnity.............................................................................................. 37
11.1 DEFINITION OF TAX.......................................................................................... 37
11.2 INDEMNIFICATION............................................................................................ 37
11.3 TAX ADVANTAGES DUE TO TIMING DIFFERENCES................................................................... 38
11.4 SETTLEMENT OF TAX LIABILITIES.............................................................................. 38
11.5 TAX COOPERATION............................................................................................ 38
11.6 TAX DISPUTES............................................................................................... 39
11.7 TAX GUARANTEE.............................................................................................. 39
12. Seller's other Indemnities................................................................................. 41
12.1 ENVIRONMENTAL INDEMNITY.................................................................................... 41
12.2 PAST SHAREHOLDING IN BGI................................................................................... 41
12.3 INDEMNITY WITH RESPECT TO REMUNERATION OF EMPLOYEES' INVENTIONS............................................ 41
12.4 INDEMNITY WITH RESPECT TO PENDING LITIGATION............................................................... 42
13. Purchasers' Representations................................................................................ 42
13.1 PRINCIPLE.................................................................................................. 42
13.2 PURCHASERS' REPRESENTATIONS SPECIFIED...................................................................... 42
13.3 NO FURTHER LIABILITY....................................................................................... 42
14. Use of Company Name, Trademarks, etc. ..................................................................... 43
14.1 COMPANY NAME............................................................................................... 43
14.2 TRADEMARKS ETC. ........................................................................................... 45
14.3 ARBITRATION................................................................................................ 46
15. Seller's and Guarantor's Non-Compete....................................................................... 46
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16. General Financial Provisions............................................................................... 47
16.1 BANK FEES ETC. ............................................................................................ 47
16.2 DEFAULT INTEREST........................................................................................... 47
17. Transitional period........................................................................................ 47
17.1 PRE-TRANSFER COVENANTS..................................................................................... 47
17.2 Purchasers Right to Access................................................................................. 48
18. Transaction Costs.......................................................................................... 49
19. Confidentiality; Public Announcements...................................................................... 49
19.1 CONFIDENTIALITY............................................................................................ 49
19.2 PUBLIC ANNOUNCEMENT........................................................................................ 49
20. Notices.................................................................................................... 49
21. Governing Law; Jurisdiction................................................................................ 50
21.1 GOVERNING LAW.............................................................................................. 50
21.2 JURISDICTION............................................................................................... 50
22. Miscellaneous.............................................................................................. 50
22.1 ENTIRE AGREEMENT........................................................................................... 50
22.2 INTERPRETATION............................................................................................. 51
22.3 PURCHASER 1's ELECTION RIGHT............................................................................... 51
22.4 LANGUAGE................................................................................................... 51
22.5 SEVERABILITY............................................................................................... 51
22.6 WRITTEN FORM............................................................................................... 51
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INDEX OF DEFINITIONS
In this Agreement,
"AGGREGATE PURCHASE PRICE" shall have the meaning ascribed to it in Section 7.2;
"ALLIANCE GROUP" shall have the meaning ascribed to it in Section 2.2;
"ALLIANCE GROUP ENTITIES" shall have the meaning ascribed to it in Section 2.2;
"ALLIANCE GROUP ENTITY" shall have the meaning ascribed to it in Section 2.2;
"ARCADE" shall have the meaning ascribed to in Section 14.1.6;
"AUTOMATEN DPLPA" shall have the meaning ascribed to it in the recital (C);
"AUTOMATEN SHARE" shall have the meaning ascribed to it in Section 2.1.1(a);
"BALLY XXXXX GROUP" shall have the meaning ascribed to it in Section 2.2;
"BALLY XXXXX GROUP ENTITIES" shall have the meaning ascribed to it in Section
2.2;
"BALLY XXXXX GROUP ENTITY" shall have the meaning ascribed to it in Section 2.2;
"BENEFICIARIES" shall have the meaning ascribed to it in Section 11.7;
"BENEFICIARY" shall have the meaning ascribed to it in Section 11.7;
"BETEILIGUNGS" shall have the meaning ascribed to it in Section 2.1.3;
"BETEILIGUNGS SHARE" shall have the meaning ascribed to it in Section 2.1.3;
"BGI" shall have the meaning ascribed to it in the recital (H);
"BGI DPLPA" shall have the meaning ascribed to it in Section 2.1.4
"BGI DPLPA CLAIM" shall have the meaning ascribed to it in Section 3.2.1;
"BGI SHARE" shall have the meaning ascribed to it in the recital (H);
"BGI DISTRIBUTION" shall have the meaning ascribed to it in Section 3.2.1;
"CASINO" shall have the meaning ascribed to it in Section 14.1.5;
"CASINO BUSINESS" shall have the meaning ascribed to it in Section 14.1.5;
"CLOSING" shall have the meaning ascribed to it in Section 8.1;
"CURRENT ACCOUNT" shall have the meaning ascribed to it in Section 1.3.3;
"DISTRIBUTIONS" shall have the meaning ascribed to it in Section 8.3.2;
"ESCROW ACCOUNT" shall have the meaning ascribed to it in Section 6.3.1(b);
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"ESCROW AGENT" shall have the meaning ascribed to it in Section 6.3.2;
"IP PURCHASE AGREEMENT" shall have the meaning ascribed to it in Section 1.3.2;
"IP TRANSACTION" shall have the meaning ascribed to it in Section 1.3.2;
"INTERCOMPANY RECEIVABLES PURCHASE PRICE" shall have the meaning ascribed to it
in Section 6.2.2;
"KG INTEREST" shall have the meaning ascribed to it in Section 1.1.1;
"KG RECEIVABLE" shall have the meaning ascribed to it in Section 4.3.1;
"MATERIAL ADVERSE CHANGE" shall have the meaning ascribed to it in Section
8.3.3;
"MATERIAL AGREEMENTS" shall have the meaning ascribed to it in Section 9.2.24;
"MATERIAL BREACH" shall have the meaning ascribed to it in Section 8.3.1;
"PARTIES" shall have the meaning ascribed to it in Section 3.1;
"PARTY" shall have the meaning ascribed to it in Section 3.1;
"PRE-CLOSING STRADDLE PERIOD" shall have the meaning ascribed to it in Section
11.2.1;
"PURCHASERS' REPRESENTATIONS" shall have the meaning ascribed to it in Section
13.1;
"SELLER'S REPRESENTATIONS" shall have the meaning ascribed to it in Section 9.1;
"SHARE PURCHASE PRICE" shall have the meaning ascribed to it in Section 7.1;
"SHARE TRANSACTION" shall have the meaning ascribed to it in Section 1.3.1;
"SIGERT" shall have the meaning ascribed to it in Section 2.1.2;
"SIGERT SHARES" shall have the meaning ascribed to it in Section 2.1.2;
"SIGNING" shall have the meaning ascribed to it in Section 1.3.2;
"SIGNING DATE" shall have the meaning ascribed to it in Section 1.3.2
"SOLD INTERCOMPANY RECEIVABLES" shall have the meaning ascribed to it in Section
6.2.1;
"STRADDLE PERIOD" shall have the meaning ascribed to it in Section 11.2.1;
"SUBSTITUTE TAX GUARANTEE" shall have the meaning ascribed to it in Section
11.7.3;
"TAX" shall have the meaning ascribed to it in Section 11.1;
"TAXES" shall have the meaning ascribed to it in Section 11.1;
"TAXING AUTHORITY" shall have the meaning ascribed to it in Section 11.1;
"TERM SHEET" shall have the meaning ascribed to it in the recital (I);
"VERTRIEBS DPLPA" shall have the meaning ascribed to it in Section 2.1.1;
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"VERTRIEBS SHARE" shall have the meaning ascribed to it in Section 2.1.1(b);
"VERTRIEBS SHAREHOLDER LOAN" shall have the meaning ascribed to it in Section
1.2;
"VERWALTUNGS SHARE" shall have the meaning ascribed to it in Section 1.1.2;
"WALL MACHINE BUSINESS" shall have the meaning ascribed to it in Section 14.1.6;
"WALL MACHINES" shall have the meaning ascribed to it in Section 14.1.6;
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INDEX OF EXHIBITS
EXHIBIT SHORT DESCRIPTION
1.3.2 Copy of the IP Purchase Agreement without exhibits is attached as
4.3.1 Copy of the agreement dated June 30, 2003 between KG and the Seller regarding the KG Receivable
4.3.2 Copy of the resolution of the Seller and Verwaltungs in their capacity as sole partners of KG dated June
30, 2003 to the effect that the KG Interest is freely transferable.
7.2 Copy of the Purchasers' shareholders guarantee as security for the payment of the Aggregate Purchase
Price.
9.2.12 Correct and complete list of (i) all intellectual property rights necessary for operating the business of
the Bally Xxxxx Group and (ii) of license agreements to which KG, Verwaltungs, Automaten or Vertriebs are
licensees except for standard software products
9.2.15 Cases in which Bally Xxxxx Group has not validly claimed all rights in service inventions made by their
employees
9.2.21 Complete and correct list of all material shop agreements (Betriebsvereinbarungen) and all applicable
union agreements (Tarifvertrage) by which the Bally Xxxxx Group Entities are bound
9.2.22 Complete and correct list of all existing non-statutory pension or retirement schemes of the Bally Xxxxx
Group
9.2.23 Land register excerpts of own the real estate as specified Bally Xxxxx Group Entities
9.2.24 Complete and correct list of certain written agreements (including all amendments thereto) to which any
Bally Xxxxx Group Entity is a party and of which, as of the Closing, the primary obligations
(Hauptleistungspflichten) have not yet been completely fulfilled (the "MATERIAL AGREEMENTS")
9.2.25 Cases in which Material Agreement are to the Seller's Knowledge are not in full force and effect
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EXHIBIT SHORT DESCRIPTION
9.2.26 Agreements between any Alliance Group Entity and any Bally Xxxxx Group Entity
9.2.27 Agreements between any Bally Xxxxx Group Entity and relatives within the meaning of Section 15 of the
German General Tax Code (Abgabenordnung) of any shareholders or managing directors of any Bally Xxxxx
Group Entity and/or any Alliance Group Entity (except for minority shareholders of the Guarantor with an
equity participation of less than 5%)
9.2.28 Cases in which KG, Verwaltungs, Automaten and Vertriebs are parties to court, administrative or other
legal or arbitration proceedings exceeding EUR 75,000.00 in the single case or judicial xxxxxxx procedures
(gerichtliche Mahnverfahren) exceeding EUR 50,000.00 in the single case
9.2.30 Investment grants and/or public subsidies based on an administrative decree (Verwaltungsakt) - excluding
for the avoidance of doubt tax credits such as e.g. tax credits under the Berlin Promotion Act
(Berlinforderungsgesetz) - which impose obligations or other conditions not yet completely fulfilled
received by the Bally Xxxxx Group
9.2.31 Pending remedy proceedings with the Taxing Authorities or the respective courts regarding Taxes
9.2.34 Cases in which persons are entitled to receive from the Bally Xxxxx Group Entities any finder's or other
fee, brokerage, commission or incentive payment in connection with this Agreement or any of the matters
contemplated or referred to in this Agreement
10.2.3 List of documents contained in the binder entitled "Disclosure Documents" and which are considered to be
known by the Purchasers
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RECITALS
(A) WHEREAS, the Seller is the sole limited partner in KG, a German limited
partnership registered in the commercial register of the Lower Court of
Charlottenburg (Berlin) under HRA 27571, and the sole shareholder of
KG's sole general partner, Verwaltungs, a German limited liability
company registered in the commercial register of the Lower Court of
Charlottenburg (Berlin) under HRB 58120,
(B) WHEREAS, KG has two wholly-owned operative subsidiaries, Automaten, a
German limited liability company registered in the commercial register
of the Lower Court of Charlottenburg (Berlin) under HRB 6527, and
Vertriebs, a German limited liability company registered in the
commercial register of the Lower Court of Hannover under HRB 6421,
(C) WHEREAS, KG and Automaten are parties to a domination and profit and
loss pooling agreement dated June 19, 1996 (the "AUTOMATEN DPLPA"),
under which Automaten is obliged to transfer its annual profits to KG
and KG, in turn, is obliged to compensate Automaten's annual losses,
(D) WHEREAS, the Seller is a wholly-owned subsidiary of the Guarantor,
(E) WHEREAS, the Seller and the Guarantor have decided to divest themselves
of KG and Verwaltungs as well as certain shareholder loans to Vertriebs
and KG,
(F) WHEREAS, the Purchasers have obtained information, through management
presentations and interviews and documents made available in a data
room, on KG, Verwaltungs, Automaten, Vertriebs, including their
respective business, products, financial and legal matters,
(G) WHEREAS, the Purchaser 1 has decided to purchase and acquire from the
Seller the entire limited partnership interest in KG and the sole share
in Verwaltungs and Purchaser 2 has decided to purchase and acquire from
the Seller certain accounts receivable from KG and Vertriebs or to
cause KG and/or Vertriebs to pay certain portions of such accounts
receivable to the Seller and purchase and acquire certain portions of
such accounts receivable,
(H) WHEREAS, Vertriebs until recently was the sole shareholder of Bally
Gaming International GmbH ("BGI") and has sold and transferred its 100
% equity interest in BGI (the "BGI SHARE") to an U.S. affiliate of the
Seller,
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(I) WHEREAS, on June 2, 2003, the Seller, the Guarantor, and the advisers
to the Purchasers have signed a term sheet setting forth the structure
and principal terms of the transactions contemplated herein (the "TERM
SHEET"),
(J) WHEREAS, this Share Purchase Agreement is the "Definitive Agreement"
contemplated in the Term Sheet,
NOW, THEREFORE, the parties hereby agree as follows:
1. OBJECT OF SALE AND PURCHASE; TRANSACTION STRUCTURE
1.1 THE KG INTEREST AND THE VERWALTUNGS SHARE
1.1.1 The Seller holds a limited partnership interest in KG (the "KG
INTEREST"). The fixed capital participation (feste Beteiligung
am Gesellschaftskapital) as well as the registered capital
contribution (Hafteinlage) associated with the KG Interest
amounts to DEM 990,000.00 (nine hundred ninety thousand
Deutschmarks). The KG Interest is the sole limited partner
interest in KG. The KG Interest is fully paid. Verwaltungs is
the sole general partner in KG with a fixed capital
participation in the amount of DEM 10,000.00 (ten thousand
Deutschmarks).
1.1.2 The Seller holds a share with a par value of DEM 50,000.00
(fifty thousand Deutschmarks) in Verwaltungs (the "VERWALTUNGS
SHARE"). The Verwaltungs Share is the sole share in
Verwaltungs. The Verwaltungs Share is fully paid.
1.2 VERTRIEBS SHAREHOLDER LOAN
Under a Loan Agreement dated July 17, 2001, the Seller has extended to
Vertriebs a shareholder loan (the "VERTRIEBS SHAREHOLDER LOAN"), of
which, as the Seller and Vertriebs hereby acknowledge, a principal
amount of EUR 3,477,273.05 (three million four hundred seventy-seven
thousand two hundred seventy-three Euros and five Cents) plus interest
accrued thereon is outstanding as of the date of this Agreement.
1.3 TRANSACTION STRUCTURE
1.3.1 The Seller will sell and transfer to the Purchaser 1, and the
Purchaser 1 will purchase and acquire from the Seller, the KG
Interest and the Verwaltungs Share (the "SHARE TRANSACTION").
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1.3.2 Prior to the signing of this Agreement (the "SIGNING" and the
date of the Signing the "SIGNING DATE"), Automaten has sold
and transferred to KG, and KG has purchased and acquired from
Automaten, substantially all of Automaten's intellectual
property rights (the "IP TRANSACTION") under an intellectual
property sale and purchase agreement (the "IP PURCHASE
AGREEMENT"). A copy of the IP Purchase Agreement without
exhibits is attached hereto as EXHIBIT 1.3.2 for evidentiary
purposes.
1.3.3 Automaten's profit (Ertrag) from the IP Transaction, if any,
will contribute to the annual result which Automaten would
generate for the fiscal year 2002/2003 but for the Automaten
DPLPA. Under the Automaten DPLPA, Automaten's annual result
for the fiscal year 2002/2003 but for the Automaten DPLPA
will, in the event of a surplus, be payable to KG or, in the
event of a deficit, have to be compensated by KG and will thus
contribute to KG's annual result for the fiscal year
2002/2003. Under KG's Partnership Agreement, 99 % (ninety-nine
percent) of KG's annual result for the fiscal year 2002/2003
will be attributable to the Seller and will, in the case of a
surplus, increase the balance on the Seller's current account
(laufendes Konto) in KG (the "CURRENT ACCOUNT") or, in the
case of a deficit, decrease the balance on the Seller's
reserve account (Rucklagenkonto) in KG. The Current Account,
as well as the Seller's other partnership accounts in KG, will
be deemed included in the Share Transaction (and will thus be
sold and transferred to the Purchaser 1 along with the KG
Interest).
2. INTERESTS IN OTHER ENTITIES; EXISTING SECURITY AND COLLATERAL
2.1 INTERESTS IN OTHER ENTITIES
2.1.1 KG directly holds the following equity interests:
(a) a share with a par value of DEM 6,500,000.00 (six million
five hundred thousand Deutschmarks) in Automaten (the
"AUTOMATEN SHARE");
(b) a share with a par value of DEM 37,190,000.00
(thirty-seven million one hundred ninety thousand
Deutschmarks) in Vertriebs (the "VERTRIEBS SHARE").
The Automaten Share and the Vertriebs Share represent 100 % of
the share capital of Automaten and Vertriebs, respectively. In
addition to the Automaten DPLPA, domination and profit and
loss pooling agreements are in place between KG and Vertriebs
(together, the "VERTRIEBS DPLPA").
2.1.2 Automaten holds a share with a par value of DEM 162,000.00
(one hundred sixty-two thousand Deutschmarks) and Vertriebs
holds a share with a par value of
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DEM 27,000.00 (twenty-seven thousand Deutschmarks) in Sigert
Verlag GmbH, a German limited liability company registered in
the commercial register of the Lower Court at Braunschweig
under HRB 268 ("SIGERT" and the "SIGERT SHARES",
respectively). The Sigert Shares represent approximately 12 %
of the share capital of Sigert. The Sigert Shares are fully
paid.
2.1.3 Vertriebs holds a share with a par value of DEM 50,000.00
(fifty thousand Deutschmarks) in Bally Xxxxx Beteiligungs
GmbH, a German limited liability company registered in the
commercial register of the Lower Court at Hannover under HRB
53011 ("BETEILIGUNGS" and the "BETEILIGUNGS SHARE",
respectively). The Beteiligungs Share represents 100 % of the
share capital of Beteiligungs. The Beteiligungs Share is fully
paid.
2.1.4 Vertriebs was until recently the sole shareholder of BGI but
has sold and transferred the BGI Share to an entity of the
Alliance Group in October 2002. A domination and profit and
loss pooling agreement was in place between Vertriebs and BGI
(the "BGI DPLPA"); the BGI DPLPA has, however, been terminated
by mutual agreement as per June 30, 2002.
2.2 CERTAIN TERMS DEFINED
In this Agreement, KG, Verwaltungs, Automaten, Vertriebs and
Beteiligungs are collectively referred to as the "BALLY XXXXX GROUP" or
the "BALLY XXXXX GROUP ENTITIES", and each of them, as a "BALLY XXXXX
GROUP ENTITY", and the Seller and the Guarantor and the Guarantor's
affiliates other than the Bally Xxxxx Group entities are collectively
referred to as the "ALLIANCE GROUP" or the "ALLIANCE GROUP ENTITIES",
and each of them, as an "ALLIANCE GROUP ENTITY".
2.3 EXISTING SECURITY AND COLLATERAL
To secure certain obligations of the Seller, Automaten, and Vertriebs
to Bank of America under certain legal instruments entered into in
connection with that certain Loan Agreement dated June 22, 2001 among,
inter alia, the Guarantor, Automaten, Vertriebs, and Bank of America,
the Seller, KG, Verwaltungs, Automaten, and Vertriebs have granted to
Bank of America security and collateral as follows:
2.3.1 The Seller has pledged to Bank of America the KG Interest and
the Verwaltungs Share, including certain rights ancillary
thereto.
2.3.2 Verwaltungs has pledged to Bank of America its general
partnership interest in KG, including certain rights ancillary
thereto.
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2.3.3 KG has pledged to Bank of America the Automaten Share and the
Vertriebs Share, including certain rights ancillary thereto.
2.3.4 KG, Verwaltungs, Automaten, and Vertriebs have each assigned
and transferred to Bank of America title to their present and
future trade accounts receivable, fixed assets and inventory,
and certain intellectual property.
2.3.5 KG and Verwaltungs have each guaranteed to Bank of America
certain obligations of Automaten and Vertriebs.
Bank of America has released the above referred collateral by way of a
Collateral Release Agreement dated June 26, 2003.
3. MATTERS RELATING TO BGI
3.1 RESPONSIBILITY
The parties hereto (collectively the "PARTIES", and each of them, a
"PARTY") acknowledge that the Purchasers and the Bally Xxxxx Group
Entities shall bear no responsibility out of or in connection with the
sale of the BGI Share or BGI's business.
3.2 CLAIMS OF BALLY XXXXX GROUP ENTITIES AGAINST BGI
3.2.1 Vertriebs had an outstanding payment claim against BGI under
the BGI DPLPA (the "BGI DPLPA CLAIM"). Until May 2003, the BGI
DPLPA Claim amounted to EUR 3,272,726.95 (three million two
hundred seventy-two thousand Euros and ninety-five Cents). By
way of a cash payment of EUR 1,500,000.00 on May 28, 2003,
another cash payment of EUR 1,500,000.00 on June 25, 2003 and
a further cash payment of EUR 272,726.95 on June 30, 2003,
each by BGI to Vertriebs, the BGI DPLPA Claim has been paid
and extinguished in full. Vertriebs has made the following
cash payments to the Guarantor on the Vertriebs Shareholder
Loan: (i) on June 2, 2003, an amount of EUR 1,500,000.00, (ii)
on June 27, 2003 an amount of EUR 1,500,000.00 and (iii) on
June 30, 2003 an amount of EUR 272,726.95. Such payments,
which amount to a total of EUR 3,272,726.95 (three million two
hundred seventy-two thousand Euros and ninety-five Cents), are
hereinafter collectively referred to as the "BGI
DISTRIBUTION".
3.2.2 All other accounts receivable of any Bally Xxxxx Group Entity
from BGI, which, as the Guarantor hereby acknowledges, amounts
to EUR 1,562,719.63 (one million five hundred sixty-two
thousand seven hundred nineteen Euros and sixty-three Cents)
as of June 26, 2003, shall remain unaffected by this
Agreement. The Guarantor shall
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procure (steht dafur ein) that BGI pays all such outstanding
accounts receivable, to the extent not already paid by June
30, 2003, no later than five (5) business days (i.e. days on
which the banks in Frankfurt am Main are open for business)
after the Closing (as defined in Section 8.1).
4. SALE, PURCHASE AND TRANSFER OF THE KG INTEREST AND THE VERWALTUNGS
SHARE
4.1 SALE AND PURCHASE
Subject to and in accordance with the terms hereof, the Seller hereby
sells and assigns to the Purchaser 1, and the Purchaser 1 hereby
purchases and acquires from the Seller, the KG Interest and the
Verwaltungs Share. For the avoidance of doubt, it is understood and
agreed that the sale and assignment hereunder (as well as all other
provisions hereof) shall in any case apply to the Seller's entire
limited partnership interest in KG and all of the Seller's share(s) in
Verwaltungs, even if the fixed capital participation of such limited
partner interest or the number or par value of such share(s) should be
incorrectly restated in Section 1.1 hereof.
4.2 CONDITION PRECEDENT
The assignment (Abtretung), but not the sale (Verkauf), of the KG
Interest and the Verwaltungs Share to Purchaser 1 shall be subject to
the condition precedent (aufschiebende Bedingung) that the Aggregate
Purchase Price (i.e., USD 16,500,001.00) has been paid in accordance
with Sections 6 and 7. The sale of the KG interest and the Verwaltungs
Share to Purchaser 1 shall have economic effect as of July 1, 2003
00:00 hours German time (the "EFFECTIVE DATE").
4.3 PARTNERSHIP ACCOUNTS; RIGHTS TO PROFITS
4.3.1 The sale and purchase of the KG Interest shall include all of
the Seller's partnership accounts (including, in particular,
the Seller's fixed capital account, the Current account and
the reserve account) with their balances as of the Closing (as
defined in Section 8.1). It is acknowledged and agreed that
the balance of the Current Account has been reduced by the sum
of USD 13,000,000.00 (thirteen million U.S. dollars) by an
agreement dated June 30, 2003 between KG and the Seller, a
copy of which is attached hereto as EXHIBIT 4.3.1 and by which
a portion in the amount of USD 13,000,000.00 of the balance of
the Current Account has been converted into an account
receivable (the "KG RECEIVABLE"), which is due and payable by
July 28, 2003 and does not bear interest until such date.
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4.3.2 The Seller and Verwaltungs in their capacity as sole partners
of KG have adopted a resolution dated June 30, 2003, a copy of
which is attached hereto as EXHIBIT 4.3.2, to the effect that
the KG Interest is freely transferable.
4.3.3 The sale and purchase of the Verwaltungs Share shall include
all rights to profits to the extent that such profits have not
been distributed. It is acknowledged and agreed that no
profits of Verwaltungs shall be distributed to any Alliance
Group Entity after the Signing.
5. PROFIT FROM IP TRANSACTION
It is expected that the IP Transaction will generate a profit for
Automaten in the amount of the Euro equivalent of USD 13,000,000.00
(thirteen million U.S. dollars) in Automaten's fiscal year 2002/2003
and that such profit will increase the amount to be absorbed by KG
under the Automaten DPLPA for the fiscal year 2002/2003 by the same
amount. In light of the fact that, under KG's Partnership Agreement,
the Seller's capital participation in KG is 99 % (ninety-nine percent),
the parties hereto therefore assume that the IP Transaction will
indirectly increase the balance on the Current Account as of June 30,
2003 by the Euro equivalent of USD 12,870,000.00 (twelve million eight
hundred seventy thousand U.S. dollars).
6. PAYMENT OR SALE AND PURCHASE OF INTERCOMPANY ACCOUNTS RECEIVABLE
6.1 PAYMENT OF INTERCOMPANY ACCOUNTS RECEIVABLE
The Purchaser 2 shall procure (steht dafur ein) that on or before July
28, 2003 Vertriebs and/or KG pay the Vertriebs Shareholder Loan and/or
the KG Receivable in a total amount of up to USD 16,500,001.00 (sixteen
million five hundred thousand and one U.S. dollars).
6.2 SALE AND PURCHASE
6.2.1 The Seller hereby sells (with immediate effect and subject to
no condition precedent) and assigns (with effect as of the
point in time immediately following the Closing as defined in
Section 8.1 and subject to the condition set forth in Section
6.2.2) to the Purchaser 2, and the Purchaser 2 hereby
purchases and acquires from the Seller accordingly, for a
purchase price equaling the amount by which the aggregate
payment on the Vertriebs Shareholder Loan and/or the KG
Receivable as set forth in Section 6.1 falls short of USD
16,500,000.00 (sixteen million five hundred thousand U.S.
dollars) (it being understood that this shall also apply if
there is no such shortfall):
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(a) the Vertriebs Shareholder Loan to the extent outstanding
as of the point in time immediately following the Closing
(including interest accrued thereon until such point in
time); and
(b) the KG Receivable outstanding as of the point in time
immediately following the Closing; and
(c) any other shareholder loans outstanding as of the point
in time immediately following the Closing, including any
interest accrued thereon until such point in time, which
any Alliance Group Entity may have extended to any Bally
Xxxxx Group Entity before the Closing
(the accounts receivable referred to in (a) through (c) above
being hereinafter referred to as the "SOLD INTERCOMPANY
RECEIVABLES"). To the extent that not the Seller but any other
Alliance Group Entity is the creditor of the Sold Intercompany
Receivables, the Seller shall cause such other Alliance Group
Entity to assign such Sold Intercompany Receivables as of the
point in time immediately following the Closing and subject to
the condition precedent set forth in Section 6.2.2 for no
further consideration.
6.2.2 The assignment of the Sold Intercompany Receivables shall be
subject to the condition precedent (aufschiebende Bedingung)
that an amount of USD 16,500,000.00 (sixteen million five
hundred thousand U.S. dollars) (the "INTERCOMPANY RECEIVABLES
CONSIDERATION") has been either paid in accordance with
Section 6.1 above or paid as a purchase price in accordance
with Section 6.2.1 above.
6.3 TAX GUARANTEE AND ESCROW
In the event that the Seller does not provide Purchaser 1 with the
Initial Tax Guarantee as defined in Section 11.7.1 on or before July
14, 2003 (or such other date the Seller and the Purchaser 1 may agree
on in writing), the following shall apply:
6.3.1 The obligation to pay the Aggregate Purchase Price shall be
deemed fulfilled (and, for the avoidance of doubt, the
condition precedent set forth in Section 4.2 shall be deemed
satisfied) if and when any Purchaser and/or KG and/or
Vertriebs make(s) the following payments on the Aggregate
Purchase Price in accordance with Sections 6.1 and 6.2:
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(a) an amount (or, in the case of several separate payments,
a total amount) of USD 11,500,001.00 (eleven million five
hundred thousand and one U.S. dollars) to the Seller;
(b) an amount of USD 5,000,000.00 (five million U.S. dollars)
to an escrow account meeting the requirements set forth
in Section 6.3.2 (the "ESCROW ACCOUNT").
6.3.2 The Escrow Account holder (the "ESCROW AGENT") shall be a
German notary selected by the Purchaser 1. The Purchaser 1
shall irrevocably instruct the Escrow Agent to make payments
from the Escrow Account to any Purchaser or any Bally Xxxxx
Group Entity subject to and in accordance with Section 11.7.
The Purchaser 1 shall further instruct the Escrow Agent to pay
out the balance on the Escrow Account from time to time (it
being understood that such balance shall include any interest
accrued on the Escrow Account) to the Seller if and when the
Seller proves to the Escrow Agent that the Seller has provided
to the Purchaser 1 a guarantee meeting the requirements set
forth in Section 11.7, except that such guarantee may be
limited to the lower of (i) the amount of the balance on the
Escrow Account to be paid out to the Seller or (ii) the sum of
EUR 5,000,000.00 (five million Euros) or such lesser amount as
may have been mutually determined to be the realistic maximum
exposure in accordance with Section 11.7.2. Purchaser 1 shall
irrevocably instruct the Escrow Agent to transfer any balance
on the Escrow Account to the Seller on August 1, 2015. The
fees and expenses of the Escrow Agent shall be borne by the
Seller.
7. SHARE PURCHASE PRICE
7.1 PURCHASE PRICE FOR THE KG INTEREST AND THE VERWALTUNGS SHARE
The aggregate purchase price for the KG Interest and the Verwaltungs
Share (the "SHARE PURCHASE PRICE") shall be USD 1.00 (one U.S. dollar)
not subject to any adjustment except as in connection with Section 7.3.
7.2 GUARANTEE FOR THE PURCHASE PRICE
Throughout this Agreement, the aggregate of the Share Purchase Price
and the Intercompany Receivables Consideration, i.e., USD 16,500,001.00
(sixteen million five hundred thousand and one U.S. dollars), is
referred to as the "AGGREGATE PURCHASE PRICE". One of the shareholders
of Purchaser 1 has given a guarantee (a copy of which is attached
hereto as EXHIBIT 7.2) as security for the payment of the Aggregate
Purchase Price.
7.3 TREATMENT OF PAYMENTS
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Any payment of the Seller or the Guarantor to any Purchaser or to any
Bally Xxxxx Group Entity under or in connection with this Agreement
(including, without limitation, under Sections 10, 11 and 12) shall be
treated as an adjustment to the Share Purchase Price. If and to the
extent that the Share Purchase Price would, after such adjustment, fall
below zero, the Seller shall make such payment as a contribution to
KG's equity capital. Such payment shall be treated with retroactive
effect as an increase of KG's equity capital and as a corresponding
increase of the Seller's acquisition costs thereon.
8. CLOSING
8.1 DEFINITION
"CLOSING" shall mean the transfer of title to the Verwaltungs Share and
the KG Interest to Purchaser 1 upon the satisfaction of the condition
precedent set forth in Section 4.2, as well as the point in time when
such condition precedent is satisfied.
8.2 TRANSACTIONS IMMEDIATELY FOLLOWING THE CLOSING
The Parties, each acting through their duly authorized representatives,
shall take the following simultaneous action immediately following the
Closing:
8.2.1 The Seller and the Purchaser 1 shall execute and deliver to
the managing director of Verwaltungs a letter notifying the
transfer of the Verwaltungs Share in accordance with Section
16 of the German Act on Limited Liability Companies.
8.2.2 The Seller and the Purchaser 1 execute, and shall cause the
managing director of Verwaltungs to execute and send to the
commercial register of the Lower Court at Charlottenburg
(Berlin), a duly notarized notification letter applying for
registration of the transfer of the KG Interest from the
Seller to the Purchaser 1.
8.3 RIGHTS OF RESCISSION
8.3.1 The Purchasers shall have the right to rescind (zurucktreten
von) this Agreement by written notice to the Seller if a
Material Breach (as defined below) has occurred. A "MATERIAL
BREACH" shall exist (only) if (i) Distributions as defined in
Section 8.3.2 (but for the purposes of this Section 8.3.1 also
including the BGI Distribution) have occurred between June 30,
2002 until and including the Closing in an aggregate amount
exceeding EUR 10,500,000.00 (ten million five hundred thousand
Euros), or (ii) a breach of a Seller's Representation pursuant
to Section 9.2.1 through 9.2.4, 9.2.6, 9.2.8 or 9.2.17
(excluding the last sentence of Section 9.2.17) has occurred
if such breach is highly likely to result in a damage of at
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least EUR 100,000.00 (one hundred thousand Euros) and is not
merely a technical breach (e.g., in the case of Section 9.2.1,
an incorrect register number), or (iii) breaches of Seller's
Representations if such breach is highly likely to result in a
damage of at least USD 10,000,000.00 (ten million U.S.
dollars).
8.3.2 Throughout this Agreement, "DISTRIBUTION" shall mean any
partnership withdrawals taken by any Alliance Group Entity
from any Bally Xxxxx Group Entity and any distributions or
other payments made to any Alliance Group Entity by any Bally
Xxxxx Group Entity. The term "Distributions" shall be deemed
to include, in particular:
(a) any netting or set-off of any payment claim of any Bally
Xxxxx Group Entity vis-a-vis any Alliance Group Entity
with or against any payment claim of any Alliance Group
Entity vis-a-vis any Bally Xxxxx Group Entity (including,
for the avoidance of doubt, the netting of Vertriebs'
purchase price claim from the sale of the BGI Share with
a portion of the Vertriebs Shareholder Loan); and
(b) any payment of intercompany loans whether in cash or any
payment surrogate extended by any Alliance Group Entity
to any Bally Xxxxx Group Entity before the Closing.
However, the two preceding sentences notwithstanding, the term
"Distributions" shall be deemed not to include any payment or
other action expressly required or permitted pursuant to or
occurring under any provision in this Agreement (including,
without limitation, the BGI Distribution and any payment on
the Vertriebs Shareholder Loan and/or the KG Receivable made
in accordance with Section 6).
8.3.3 The Purchasers shall have the right to rescind this Agreement
if a Material Adverse Change (as defined below) has occurred
until and including the Closing. A "MATERIAL ADVERSE CHANGE"
shall be any event which (i) affects Automaten and Vertriebs
and/or the German wall machine business as a whole but does
not affect the German, European or world economy as a whole
and (ii) in the reasonable judgment of an objective observer
who is familiar with Automaten and Vertriebs and their
respective business and financial situation is highly likely
to result, in each of at least two consecutive fiscal years of
Automaten and Vertriebs, in a decrease of Automaten's and
Vertriebs' result of ordinary operations within the meaning of
Section 275 para. 2 no. 14 of the German Commercial Code (on a
consolidated basis) for such fiscal year by at least 25 %
compared to the result of ordinary operations (on a
consolidated basis) that would be generated in such fiscal
year had such event not occurred. It is understood that an
"event" for the purposes of this Section 8.3.2 shall
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be a one-time occurrence only and that, in particular, an
adverse development extending over a period of time (such as
increasing competition for Automaten and Vertriebs or
deteriorating market conditions for the German gaming wall
machine industry as a whole) shall not constitute an "event"
for these purposes. It is understood that the Purchasers shall
have the burden to prove that a Material Adverse Change has
occurred.
8.3.4 The Purchasers' right of rescission under Section 8.3.1 and
Section 8.3.3 hereof shall immediately cease (erloschen) if
the Purchasers have not exercised such right of rescission in
writing or by facsimile, setting forth in reasonable detail
the facts on which the right of rescission is based, to the
Seller or the Guarantor on July 28, 2003 at the latest.
8.3.5 In the event that the Purchasers have a right of rescission
under Section 8.3.1 and exercise such right in accordance with
Section 8.3.4, the Seller shall reimburse the Purchasers for
their expenses and lost opportunities by paying an amount of
EUR 1,000,000.00 (one million Euros).
8.3.6 However, the right of rescission pursuant to Section 8.3.1 (i)
of the Purchasers shall not be deemed exercised if the Seller
fully reimburses the Purchaser 1 for any Distribution in
excess of EUR 9,522,727.00 (nine million five hundred
twenty-two thousand seven hundred twenty-two Euros) which may
have occurred on or after July 1, 2002 until the Closing
including, for the purposes of this Section 8.3.6, the BGI
Distribution no later than five (5) bank days (meaning days on
which banks are open for business in Frankfurt am Main) after
the Purchasers have exercised or notified the Seller that they
intend to exercise their right of rescission under Section
8.3.1.
9. SELLER'S REPRESENTATIONS
9.1 PRINCIPLE
The Seller hereby guarantees to the Purchasers, subject to the
provisions contained in Section 10 hereof and elsewhere in this
Agreement, by way of an independent promise of guarantee irrespective
of default (selbstandiges verschuldensunabhangiges Garantieversprechen)
that the statements set forth in Section 9.2 hereof (the "SELLER'S
REPRESENTATIONS") are true and accurate as of (i) the Signing and (ii)
the earlier of the Closing or July 31, 2003, unless otherwise explicit
specified below, it being understood that none of the Seller's
Representations shall constitute an "agreement on a quality"
(Beschaffenheitsvereinbarung) within the meaning of Section 434 para. 1
sentence 1 of the German Civil Code or a "guarantee of a quality of the
object of the purchase" (Garantie fur
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die Beschaffenheit der Sache) within the meaning of Section 443 para. 1
and Section 444 of the German Civil Code and it being further
understood that the content of the Seller's Representations shall be
further defined by the provisions in Section 10 hereof.
9.2 SELLER'S REPRESENTATIONS SPECIFIED
9.2.1 The statements contained in the recitals (A) to (D) and in
Sections 1.1, 1.2, 1.3.2, 3.2.1 and 2 are correct. Other than
the shareholdings set out in Section 2 none of the Bally Xxxxx
Group Entities holds any other interest in any company or
other legal entity.
9.2.2 KG is a limited partnership, and each of Verwaltungs,
Automaten and Vertriebs is a limited liability company, duly
incorporated and validly existing under the laws of Germany.
9.2.3 The Seller holds clean title to the sole share in Verwaltungs
and to the entire limited partnership interest in KG, and KG
holds clean title to all shares in Automaten and Vertriebs,
each not encumbered (belastet) with rights of third parties.
No third party is entitled to exercise pre-emptive rights,
rights of first refusal, options, conversion rights, claw back
options or other rights to purchase or acquire the shares in
any Bally Xxxxx Group Entity. The shares/interests in the
Bally Xxxxx Group Entities are not subject to (i) any trust
arrangement (Treuhandverhaltnis), silent partnership (stille
Beteiligung) or sub-participation (Unterbeteiligung); (ii) any
pending (noch nicht vollstandig erfullt) transfer
(Ubertragung) or other disposition (Verfugung), (iii) any
sale, contribution or other contractual arrangement creating
an obligation to transfer or encumber any of the shares in the
Bally Xxxxx Group Entities; or (iv) any shareholders
resolution on the redemption (Einziehung) of shares.
9.2.4 The KG Interest and the Verwaltungs Share as well as the
Automaten Share and the Vertriebs Share and the shares in the
other Bally Xxxxx Group Entities have been validly issued,
fully paid and have not been repaid (keine Ruckgewahr von
Einlagen). There is no shareholder obligation to make an
additional capital contribution.
9.2.5 No shareholder resolutions have been adopted which are
required to be registered in the commercial register but have
not been so registered.
9.2.6 The Seller and the Guarantor will have obtained all requisite
shareholder and governmental (other than merger control) or
other necessary approvals and will have taken all other
corporate action necessary to execute and implement this
Agreement and the transactions contemplated herein. This
Agreement has been duly executed on behalf of the Seller and
the Guarantor.
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9.2.7 The audited financial statements for KG, Verwaltungs,
Automaten and Vertriebs for the fiscal years ended on June 30,
2002, 2001, and 2000 have been prepared in accordance with
German generally accepted accounting principles, observing the
principle of continuity.
9.2.8 No bankruptcy or judicial composition proceedings concerning
the assets of the Bally Xxxxx Group Entities have been applied
for and no circumstances exist which would require an
application to be made for the commencement of bankruptcy or
judicial composition proceedings.
9.2.9 No Distributions (including, for the purposes of this Section
9.2.9, the BGI Distribution) have been made on or after July
1, 2002 until the Closing in excess of EUR 9,522,727 (nine
million five hundred twenty-two thousand seven hundred twenty
seven Euros).
9.2.10 Since June 30, 2002, KG, Verwaltungs, Automaten and Vertriebs
have not entered into any loan or collateral agreements or
other financing agreements such as sale-and-lease back and
factoring agreements except for
(a) retention of title rights, liens, pledges or other
security rights in favor of suppliers, lessors
(Vermieterpfandrecht), contractors, mechanics and the
like (Werkunternehmerpfandrecht) incurred in the ordinary
course of business consistent with past practice;
(b) the granting or extension of payment periods (Gewahrung
oder Verlangerung von Zahlungszielen) incurred in the
ordinary course of business consistent with past
practice; and
(c) statutory liens and other security or collateral rights
in favor of tax authorities or other governmental
entities,
each except as approved by any of the Purchasers.
9.2.11 The Bally Xxxxx Group has no liabilities under any loan
agreements to any financial institutions (Verbindlichkeiten
gegenuber Kreditinstituten) within the meaning of Section 266
para. 3 C no. 2 of the German Commercial Code except as
approved by any of the Purchasers.
9.2.12 The Bally Xxxxx Group owns (except for retention of title
rights (Eigentumsvorbehalte) of third parties granted in the
ordinary course of business consistent with past practice and
except for office equipment which may be leased),
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possesses and uses all fixed assets, inventories and
intellectual property rights necessary for operating their
business and does not infringe any third party intellectual
property rights. EXHIBIT 9.2.12 contains a correct and
complete list of all intellectual property rights necessary
for operating the business of the Bally Xxxxx Group.
9.2.13 Except as disclosed in Exhibit 9.2.12, all intellectual
property rights held by the Bally Xxxxx Group, including but
not limited to those listed in Exhibit 9.2.12, are free of any
third party rights and have no defects in title, including but
not limited to defects in title resulting from a non-payment
of renewal and maintenance fees. The Bally Xxxxx Group owns,
except as otherwise specified in Exhibit 9.2.12, all
intellectual property rights listed in Exhibit 9.2.12.
9.2.14 Except as disclosed in Exhibit 9.2.12, no opposition or
cancellation proceedings are pending against intellectual
property rights held by the Bally Xxxxx Group as of the
Signing Date, including but not limited to those listed in
Exhibit 9.2.12.
9.2.15 Except as disclosed in EXHIBIT 9.2.12, Bally Xxxxx Group has
validly claimed all rights in service inventions made by their
employees.
9.2.16 EXHIBIT 9.2.16 contains a complete and correct list of license
agreements to which KG, Verwaltungs, Automaten or Vertriebs,
as of the Signing Date, are licensees or co-user (Mitbenutzer)
except for standard software products.
9.2.17 KG, Verwaltungs, Automaten and Vertriebs have the right to use
the company name and trademark "Bally Xxxxx" and will be
entitled to use such name and trademark after the acquisition
of the Bally Xxxxx Group by the Purchaser 1. The Bally Xxxxx
Group Entities have the right to transfer and license the
right to use the name and trademark "Bally Xxxxx" to a
Purchaser and any other third party which is active in the
same area of business as the Bally Xxxxx Group as of Closing
in the combination "Bally Xxxxx". In particular, no rights,
including but not limited to name rights, of other companies
or members of the families Bally and Xxxxx will prevent the
use of the elements "Bally" and/or "Xxxxx" in "Bally Xxxxx" by
the Purchasers and/or Bally Xxxxx Group entities. No Alliance
Group Entity or Bally Xxxxx Group Entity has granted any third
party the right to use the name "Bally Xxxxx".
9.2.18 The transfer of the KG Interest and the Verwaltungs Share to
the Purchasers will not violate any legal, administrative or
contractual provisions (other than merger control) by which
the Seller is bound or to which the Seller is a party, nor
will it lead to a termination of any public licenses or
permits.
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9.2.19 The Bally Xxxxx Group Entities are in compliance with all laws
and regulations including those of labor and social security.
9.2.20 In the last two years before the Signing Date there has been
no strike, work stoppage (Arbeitsniederlegung) or slowdown
strike (Bummelstreik) affecting the Bally Xxxxx Group Entities
and, to the Seller's Knowledge, no such measure has been
threatened against any Bally Xxxxx Group Entity.
9.2.21 EXHIBIT 9.2.21 contains a complete and correct list of all
material shop agreements (Betriebsvereinbarungen) and all
applicable union agreements (Tarifvertrage), as of the Signing
Date, by which the Bally Xxxxx Group Entities are bound.
9.2.22 EXHIBIT 9.2.22 contains a complete and correct list of all
existing non-statutory pension or retirement schemes of the
Bally Xxxxx Group.
9.2.23 The Bally Xxxxx Group Entities own the real estate as
specified in the land register excerpts attached as EXHIBIT
9.2.23. Except for the encumbrances shown in the respective
register excerpts attached as Exhibit 9.2.23, there are no
encumbrances on such real estate and, in the case of
encumbrances registered in the Third Section (Dritte
Abteilung) of the land register, there are no underlying
obligations for such encumbrances.
9.2.24 EXHIBIT 9.2.24 contains a complete and correct list, as of the
Signing Date, of all of the following written agreements
(including all amendments thereto) to which any Bally Xxxxx
Group Entity is a party and of which, as of the Closing, the
primary obligations (Hauptleistungspflichten) have not yet
been completely fulfilled (the "MATERIAL AGREEMENTS"):
(a) agreements relating to the acquisition or sale of
interests in other companies or businesses;
(b) joint venture agreements (other than solely with respect
to the joint use of intellectual property rights);
(c) rental and lease agreements relating to real estate;
(d) guarantees or collateral issued by any Bally Xxxxx Group
Entity for any debt of any third party of EUR 25,000.00
or more except for guarantees and collateral granted to
customers in the ordinary course of business consistent
with past practice;
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(e) any agreement that materially limits the freedom of any
Bally Xxxxx Group Entity to compete in any line of
business;
(f) the supply agreements with the major suppliers and the
customer agreements with the major customers of Bally
Xxxxx Group (based on the aggregate sales in the business
year 2002/2003) with a binding aggregate value of more
than EUR 100,000.00 in each case or a term of more than
twelve (12) months after the Closing;
(g) agreements (other than agreements which solely relate to
intellectual property rights) in which the other party or
parties have a right to restrict or consent to a change
of control in the Bally Xxxxx Group or where such other
party or parties have rights that are triggered on such a
change of control.
9.2.25 Except as disclosed in EXHIBIT 9.2.25, each Material Agreement
is to the Seller's Knowledge in full force and effect. Neither
the respective Bally Xxxxx Group Entity nor the respective
other party are in default or other breach of any material
obligation under any Material Agreement. No party with which a
Bally Xxxxx Group Entity has entered into a Material Agreement
has given written notice of its intention to terminate a
Material Agreement. To the extent that the Seller's
Representations set forth in this Section 9.2.25 refer to the
respective other party, such Seller's Representation shall be
deemed to refer to the Signing Date only.
9.2.26 Except as disclosed in EXHIBIT 9.2.26, there are no agreements
between any Alliance Group Entity and any Bally Xxxxx Group
Entity.
9.2.27 Except as disclosed in EXHIBIT 9.2.27, there are no agreements
between any Bally Xxxxx Group Entity and relatives within the
meaning of Section 15 of the German General Tax Code
(Abgabenordnung) of any shareholders or managing directors of
any Bally Xxxxx Group Entity and/or any Alliance Group Entity
(except for minority shareholders of the Guarantor with an
equity participation of less than 5 %).
9.2.28 Except as disclosed in EXHIBIT 9.2.28, KG, Verwaltungs,
Automaten and Vertriebs are not, as of the Signing Date,
parties to any court, administrative or other legal or
arbitration proceedings exceeding EUR 75,000.00 in the
individual case or judicial xxxxxxx procedures (gerichtliche
Mahnverfahren) exceeding EUR 50,000.00 in the single case, and
to Seller's Knowledge, no such proceedings are to be
initiated.
9.2.29 KG, Verwaltungs, Automaten and Vertriebs have all material
public approvals, licenses and other permits necessary to
operate their business, and their business activity does not
materially infringe any provisions of public law.
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9.2.30 Except as disclosed in EXHIBIT 9.2.30, the Bally Xxxxx Group
has not, as of the Signing Date, received any investment
grants and/or public subsidies based on an administrative
decree (Verwaltungsakt) - it being understood that the terms
"investment grants" and "public subsidies" shall exclude tax
credits such as e.g. tax credits under the Berlin Promotion
Act (Berlinforderungsgesetz) - which impose obligations or
other conditions not yet completely fulfilled. No repayment of
investment grants and/or public subsidies based on an
administrative decree (or in the event that an investment
grant and/or a public subsidy has been granted but the payment
has not yet been made: no refusal of a payment) will be
triggered as a consequence of the execution or implementation
of this Agreement or by reason of other circumstances already
existing today.
9.2.31 The Bally Xxxxx Group Entities have duly prepared and filed or
will duly prepare and file all Tax returns. Except as set
forth in EXHIBIT 9.2.31 there are no pending remedy
proceedings with the Taxing Authorities or the respective
courts regarding Taxes. The Bally Xxxxx Group Entities have
been subject only to routine Tax audits. No assets have been
contributed to any of the Bally Xxxxx Group Entities in
exchange for shares at book value or at another value below
the going concern value of individual assets, or acquired by
any of the Bally Xxxxx Group Entities at such value through
restructuring measures. No Bally Xxxxx Group Entity has
reduced its German Tax assessment basis by way of a write-off
(Teilwertabschreibung) of any shares in any Bally Xxxxx Group
Entity, except for the potential write-off regarding the
Vertriebs Share and the Automaten Share in the financial
statements of KG for the fiscal year 2002/2003.
9.2.32 Since June 30, 2002, the Bally Xxxxx Group Entities have
conducted their respective business in the ordinary course as
such business has been conducted during the fiscal year ended
on June 30, 2002, except (i) as expressly mentioned in this
Agreement, (ii) for any management action which in the
reasonable judgment of a prudent businessman may be necessary
to avoid a substantial loss (including a loss of profit) that
would otherwise be likely to occur.
9.2.33 KG, Verwaltungs, Automaten and Vertriebs are not subject to
any liability in connection with Automaten and Vertriebs'
current and/or past shareholding in BGI, Sigert and
Informationsgemeinschaft Munzspiele GmbH i.L..
9.2.34 Except as disclosed in EXHIBIT 9.2.34, no person is entitled
to receive from the Bally Xxxxx Group Entities any finder's or
other fee, brokerage, commission or incentive payment in
connection with this Agreement or any of the matters
contemplated or referred to in this Agreement. No such fee,
brokerage, commission or incentive
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payment has been paid by any Bally Xxxxx Group Entity in
connection with the preparation and/or negotiation of this
Agreement. No Alliance Group Entity has promised to any
managing director or employee of a Bally Xxxxx Group Entity
any finder's or other fee, brokerage, commission or incentive
payment in connection with this Agreement or any of the
matters contemplated or referred to in this Agreement.
9.3 SELLER'S KNOWLEDGE
If one of the foregoing guarantees is given to "Seller's Knowledge"
this shall mean that the Seller (including its board members) and the
Seller's financial and legal advisors shall have no knowledge of the
incompleteness or the incorrectness of the relevant Seller's
Representation. Seller's knowledge shall also include the knowledge
that the Seller and its board members could have obtained through the
enquiries that can be expected from a prudent businessman (Section 347
para 1 German Commercial Code) or by drawing obvious conclusions from
the facts known to the Seller and its board members.
10. CONTENT AND NATURE OF SELLER'S REPRESENTATIONS; REMEDIES
The Parties agree that the scope and content of each of the Seller's
Representations shall be defined by the following provisions of this
Section 10:
10.1 CONTENT AND NATURE OF SELLER'S REPRESENTATIONS
The Purchasers acknowledge that none of the data, documentation and
information so provided and none of the Seller's Representations
constitutes an "agreement on a quality" within the meaning of Section
434 para. 1 sentence 1 of the German Civil Code or a "guarantee of a
quality of the object of the purchase" within the meaning of Section
443 para. 1 and Section 444 of the German Civil Code. Except as
expressly set forth in this Agreement, the Seller and the Guarantor do
not make or give and have not made or given any express or implied
representation, warranty or guarantee of whatever legal nature
regarding the financial or earnings situation of Verwaltungs and/or KG
and/or Automaten and/or Vertriebs or the ownership by said entities of
any specific asset; in particular, the business plans, projections,
calculations and assumptions contained in the information memorandum
made available to the Purchasers in the course of the sale process
leading to the execution of this Agreement do not represent any such
express or implied representation, warranty or guarantee.
10.2 RESTITUTION IN KIND; MONETARY DAMAGES
10.2.1 In the event that one or several of the Seller's
Representations is or are not true and accurate, the Seller
shall be liable to put the Purchasers or at the Purchasers'
election
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the Bally Xxxxx Group Entities into the same position, that
they would have been if the representations and warranties
contained in Section 9.2 above had been correct or had not
been breached (Naturalrestitution), or the Purchasers may
claim damages for non-performance from the Seller if (i) a
Purchaser has granted to the Seller an appropriate period of
not more than 30 (thirty) days to remedy the situation and
such remedy has not been taken during such period or if (ii) a
restitution in kind by the Seller is not possible (unmoglich)
or if (iii) an immediate action by a Purchaser and/or a Bally
Xxxxx Group Entity is required because there is immediate
danger of a materially greater damage (Gefahr in Verzug). The
Seller shall only be liable to pay to the respective Bally
Xxxxx Group Entity or a Purchaser monetary damages
(Schadensersatz in Geld) for the actual damages suffered by
Purchaser and/or a Bally Xxxxx Group Entity including solely
(a) direct damages (unmittelbare Schaden) and (b) the
following consequential damages (mittelbare oder
Folge-Schaden) to the extent typical and/or foreseeable: (i)
damages to other assets of a Bally Xxxxx Group Entity or a
Purchaser caused by the incorrectness of Seller's
Representations, (ii) lost profit (entgangener Gewinn), (iii)
useless out-of-pocket expenses (nutzlose Aufwendungen), (iv)
only in respect of the Seller's Representations under Section
9.2.13 through 9.2.17 and 9.2.19, damages of third parties
caused by the respective incorrectness of a Seller's
Representation for which a Bally Xxxxx Group Entity or a
Purchaser is finally held liable and (v) reasonable
out-of-pocket expenses to pursue such damages/losses
(Rechtsverfolgungskosten). Seller shall not be liable for lost
profits based on Purchasers' allegation that they could not
achieve an exit from the Bally Xxxxx Group or could only
achieve such exit on less favorable terms than would otherwise
have been possible.
10.2.2 To the extent that any circumstance constituting or resulting
in a breach of any Seller's Representation also results in a
tax or other benefit to the Purchasers and/or Verwaltungs
and/or KG and/or Automaten and/or Vertriebs, including,
without limitation, the fact that an additional liability or
cost constituting or resulting in any such breach reduces the
taxable income of the Purchasers and/or Verwaltungs and/or KG
and/or Automaten and/or Vertriebs, such benefit shall be
deducted from any claim of the Purchasers for the breach of
such Seller's Representation. Section 11.3 shall apply mutatis
mutandis.
10.2.3 A breach of any of the Seller's Representations shall not give
rise to any right or claim of the Purchaser, whether for
restitution in kind or monetary damages, if and to the extent
(i) Purchasers' managing directors and the investment managers
of Orlando Management GmbH as advisor to Purchasers had
knowledge of the pertinent facts or (ii) that the pertinent
facts have been disclosed in this Agreement or in its Exhibits
or in the documents contained in the binder entitled
"Disclosure
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Documents" as listed in EXHIBIT 10.2.3, submitted to the
Purchasers' advisors on June 25, 2003. Section 442 of the
German Civil Code (BGB) and Sections 377, 378 of the German
Commercial Code (HGB) shall be excluded except as otherwise
explicitly provided in this Agreement.
10.3 LIMITATION PERIOD
The claims of the Purchasers and the Seller under this Agreement shall
be time-barred (verjahren) as follows:
10.3.1 The claims of the Purchasers in connection with Taxes shall be
time-barred at the latest of (i) six (6) months after the
relevant assessment (Bescheid) has become final and binding
(bestandskraftig) or (ii) the relevant Tax becomes
statute-barred (festsetzungsverjahrt) or (iii) twelve (12)
years after the Closing or after July 31, 2003, whichever
occurs first. For the purpose of the preceding sentence,
"final and binding" shall mean that the relevant recipient of
the assessment may no longer lodge an appeal against such
assessment.
10.3.2 Claims of the Purchasers based on
(a) defects of title (dingliche Rechtsmangel) to the shares
in the Bally Xxxxx Entities within the meaning of Section
435 sentence 1 German Civil Code and/or
(b) Seller's fraud (Arglist) or willful misconduct (Vorsatz)
shall, to the extent legally permissible, be time-barred ten
(10) years after the Closing or after July 31, 2003, whichever
occurs first.
10.3.3 All other claims of the Purchasers under Section 10 and all
claims of the Seller under Section 13 shall be time-barred
thirty (30) months after the Closing or after July 31, 2003,
whichever occurs first.
10.3.4 Any limitation period pursuant to this Section 10.3 shall be
suspended (gehemmt) with respect to a particular claim if any
of the Purchasers give written notice of such claim to the
Seller if the Seller initiates legal proceedings within the
meaning of Section 204 para. 1 of the German Civil Code in
respect of such claim within one (1) month after giving such
notice.
10.4 THRESHOLDS FOR AND CAPS ON SELLER'S LIABILITY
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10.4.1 A breach of any Seller's Representation(s) (except for the
Seller's Representations under Section 9.2.9) shall not give
rise to any remedy against the Seller if the individual claim
that would otherwise result from such breach is less than USD
10,000.00 (ten thousand U.S. dollars), excluding however
serial damages. Furthermore, any breach(es) of any Seller's
Representation(s) (except for the Seller's Representations
under Section 9.2.9) shall not give rise to any remedy if the
total claim(s) that would otherwise result from such
breach(es) is(are) less than USD 100,000.00 (one hundred
thousand U.S. dollars). It is understood that the USD
10,000.00 and USD 100,000.00 thresholds under the preceding
sentences shall not be considered deductibles; instead, in the
event that any such threshold is exceeded, the Purchasers
shall be entitled to the remedies set forth herein for the
full amount of the impact of the respective breach(es) and not
just for the amount by which such impact exceeds such
threshold(s).
10.4.2 The total and combined liability of the Seller (i) for
breaches of the Seller's Representations and (ii) under
Section 12.1 shall not exceed a maximum amount of USD
10,000,000.00 (ten million U.S. dollars). Said maximum amount
shall not apply to losses arising from any breach of any of
the Seller's Representations set forth in Sections 9.2.1
through 9.2.4, 9.2.6, 9.2.8 and 9.2.13. In no case, however
(and whether or not there has been any breach of any of the
Seller's Representations set forth in Sections 9.2.1 through
9.2.4, 9.2.6, 9.2.8 and 9.2.13), shall the total and combined
liability of the Seller for breaches of the Seller's
Representations exceed the Aggregate Purchase Price, except to
the extent required under mandatory applicable law.
10.5 GUARANTOR'S SURETYSHIP
10.5.1 The Guarantor hereby guarantees to the Purchasers by way of a
suretyship (selbstschuldnerische Burgschaft) under Sections
765 ss. of the German Civil Code the prompt performance when
due of the Seller's potential payment obligations under this
Agreement (in particular, obligations to pay monetary damages
to the Purchasers and/or Bally Xxxxx Group Entities under
Sections 10.2, 11 and 12). The Purchasers shall not be
required to seek payment from the Seller before seeking
payment from the Guarantor.
10.5.2 The total and combined liability of the Guarantor under this
Section 10.5 shall not exceed a maximum amount of USD
10,000,000.00 (ten million U.S. dollars). Said maximum amount
shall not apply to losses arising from any fraudulent or
willful breach by the Seller of any of the Seller's
Representations or for any breach of any of the Seller's
Representations set forth in Sections 9.2.1 through 9.2.4,
9.2.6, 9.2.8 and
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9.2.13. In no case, however (and whether or not there has been
any such fraudulent or willful breach or any such breach of
any of the Seller's Representations set forth in Sections
9.2.1 through 9.2.4, 9.2.6, 9.2.8 and 9.2.13), shall the total
and combined liability of the Guarantor under this Section
10.5 exceed the Aggregate Purchase Price, except to the extent
required under mandatory applicable law.
10.6 INFORMATION AND PARTICIPATION RIGHTS
The Purchasers shall at all times promptly inform the Seller and the
Guarantor, and shall ensure that KG, Verwaltungs, Automaten and
Vertriebs at all times promptly inform the Seller and the Guarantor, of
any facts and circumstances which may be relevant in connection with
any rights the Purchasers may assert in connection with an actual or
potential breach of any of the Seller's Representations. In the event
that the occurrence or financial impact or other effect of a breach of
any of the Seller's Representations may depend on the outcome of any
dispute with any third party or any proceeding in or initiated by any
court, arbitration tribunal, governmental (including tax or social
security) authority or similar body, the Purchasers shall give the
Seller and the Guarantor reasonable opportunity to participate in such
dispute or proceeding as reasonably directed by the Seller and shall
conduct a defense in such dispute or proceeding as directed by the
Seller or to the extent that an immediate action by the Purchasers or a
Bally Xxxxx Group Entity is required because there is a case of
immediate danger (Gefahr in Verzug). The Purchasers shall cause the
Bally Xxxxx Group Entities to conduct themselves in accordance with
this Section 10.6.
10.7 NO FURTHER LIABILITY
Except as expressly set forth in this Agreement or as provided by
mandatory applicable law, the Purchasers shall have no right or claim
(including, without limitation, for restitution in kind, monetary
damages, termination or rescission) on whatever statutory, contractual,
quasi-contractual, tort or other legal basis against any Alliance Group
Entity or any Alliance Group Entity's officers, employees, agents or
advisers, in connection with any quality (including, without
limitation, the financial, earnings and legal situation) of KG and/or
Verwaltungs and/or Automaten and/or Vertriebs and/or their respective
assets and/or liabilities and/or operations and/or the Sold
Intercompany Loans and/or any information provided in respect of any of
the above.
10.8 CONTRACT BASIS
Based on the advice obtained from their respective legal advisers, the
Seller and the Purchaser concur in their view that Section 444 of the
German Civil Code does not apply to independent promises of guarantee
as set forth in the Seller's Representations and that, consequently,
the provisions of this Section 10.8 do not constitute exclusions
(Ausschlusse)
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or limitations (Beschrankungen) within the meaning of Section 444 of
the German Civil Code but define the contents of the Seller's
Representations. The Seller is prepared to make the independent
promises of guarantee set forth in the Seller's Representations only on
the assumption that all provisions of this Section 10.8 are fully
binding and enforceable, and the Purchaser acknowledges and agrees that
it shares said assumption. The Seller and the Purchaser are in
agreement that it is the contract basis (Geschaftsgrundlage) for the
sale of the shares and loans hereunder that all provisions of this
Section 10.8 are fully binding and enforceable. It is agreed, however,
that even if any of the provisions of this Section 10.8 is not fully
binding and enforceable, this Agreement shall not be unwound
(ruckabgewickelt) but shall be adjusted (angepasst) only.
11. TAX INDEMNITY
11.1 DEFINITION OF TAX
TAX" or "TAXES" shall mean
(a) any tax or other like assessment or charge within the
meaning of Section 3 of the German Tax Code
(Abgabenordnung), or similar provisions under applicable
foreign law tax equivalents (Steuerausgleichs- oder
-umlagezahlungen in steuerlichen
Organschaftsverhaltnissen zwischen Bally Xxxxx Group
Entities und Alliance Group Entities) including, without
limitation, corporate income tax, trade tax, state tax,
stamp duty, custom duty, registration tax, wealth tax,
and any other form of taxation, levy, duty, charge,
contribution, withholding or impost of whatever nature
(including any related fine, penalty, surcharge or
interest), further all investment grants, investment tax
credit and public subsidies imposed, collected or
assessed by, or payable to and
(b) all social security contributions
imposed by any government, state or municipality or any
governmental, state, social or other fiscal, revenue, customs
or excise authority, body or official anywhere in the world
("TAXING AUTHORITY") or Purchasers or any Bally Xxxxx Group
Entity is liable for.
11.2 INDEMNIFICATION
11.2.1 The Seller shall indemnify and hold harmless the Purchasers
and/or, at the election of Purchaser 1, any Bally Xxxxx Group
Entity against any and all Taxes due and payable by any Bally
Xxxxx Group Entity for Tax assessment periods (steuerliche
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Veranlagungszeitraume) ending on or before June 30, 2003
including, for the purpose of this Agreement, the period
beginning immediately after December 31, 2002 up to the close
of business on June 30, 2003. For the determination of any
indemnification claim relating to Taxes imposed upon the
Purchasers or the Bally Xxxxx Group for a taxable period which
begins on or before June 30, 2003 and ends after June 30, 2003
("STRADDLE PERIOD"), such Taxes shall be allocated between the
period beginning at the start of the first day of the Straddle
Period and ending on the end of June 30, 2003 ("PRE-CLOSING
STRADDLE PERIOD") and the period beginning immediately after
June 30, 2003 and ending at the end of the last day of the
Straddle Period. The amount of Tax attributable to the
Pre-Closing Straddle Period shall be the amount of Tax to
which the Bally Xxxxx Group would be liable if the Pre-Closing
Straddle Period were a taxable period and if it were permitted
to file a tax return for the purpose of the Pre-Closing
Straddle Period.
11.2.2 This shall, however, not apply to the extent, that such Tax
liabilities have been paid before June 30, 2003.
11.2.3 For claims under this Section 11.2, the limitation as set
forth in Section 10.3.1 shall apply.
11.3 TAX ADVANTAGES DUE TO TIMING DIFFERENCES
If the Seller has to indemnify the Purchasers for a Tax liability under
Section 11.2 and such Tax liability definitively results in Tax
advantages of the Bally Xxxxx Group or the Purchasers, the
corresponding Tax advantage, discounted by a factor of 8 % per annum
taking into account the date such Tax advantage reduces the Tax burden
of the Bally Xxxxx Group, shall reduce the claim against the Seller for
indemnification of the respective Tax liability if and to the extent
(i) such Tax advantage relates to timing differences (e.g.
non-deductibility of provisions and other liabilities, capitalisation
of costs that entail increased expenses or depreciations, lengthening
of amortisation or depreciation periods) and (ii) such Tax advantage
will reduce Taxes related to Tax assessment periods prior to January 1,
2010 and (iii) the Bally Xxxxx Group or the Purchasers would not have
received such Tax advantage but for the circumstances giving rise to a
claim against the Seller for indemnification of Tax.
11.4 SETTLEMENT OF TAX LIABILITIES
The indemnification claims set out in this Section 11.4 shall be
settled by the Seller at the Purchaser's request immediately after the
Tax to be indemnified for falls due.
11.5 TAX COOPERATION
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With respect to the Seller's responsibility for the Taxes attributable
to periods prior to June 30, 2003 the Purchaser 1 shall assist and
shall cause the Bally Xxxxx Group to assist in providing tax accounting
data of the Bally Xxxxx Group necessary for Seller's Tax returns,
including maintaining and making available to the Seller all books and
records necessary in connection with Tax matters until June 30, 2003,
and to keep the Seller informed as to any issue relating to Taxes which
could have a bearing on the Seller's responsibility under this
Agreement. The Seller shall bear its own costs. The Seller shall assist
the Purchasers relating to Tax matters after June 30, 2003, it being
understood that the Purchasers shall bear their own costs.
11.6 TAX DISPUTES
Whenever any Taxing Authority asserts a claim, makes an assessment or
otherwise disputes or affects the Tax reporting position of the Bally
Xxxxx Group for taxable periods ending on or prior to June 30, 2003
(including a Pre-Closing Straddle Period), the respective Purchaser
shall, upon receipt by such Purchaser or the Bally Xxxxx Group of
notice thereof, inform the Seller thereof. The Seller shall be given
the opportunity to co-operate and participate in the audit process and
comment on the results of the audit. The Purchaser 1 shall procure that
the respective Bally Xxxxx Group Entity initiates and conducts remedy
proceedings as reasonably instructed by the Seller (including a
representative, if any, to be named by the Seller). The costs incurred
thereby (including the costs of a representative) shall be borne by the
Seller. The Parties shall use their best efforts to co-operate in the
execution of audits and remedy proceedings taking into consideration
the present Tax accounting policy of the Bally Xxxxx Group. The
Purchasers or any Bally Xxxxx Group Entity shall only settle any
dispute with any Taxing Authority with the prior consent of the Seller,
such consent not to be unreasonably withheld.
11.7 TAX GUARANTEE
11.7.1 As soon as possible after the Signing Date, the Seller or the
Guarantor shall provide the Purchaser 1 with a guarantee
(Garantie) or suretyship (Burgschaft) from Bank of America or
any other reputable bank in an amount of EUR 5,000,000.00
(five million Euros), including in the form of a guarantee or
suretyship "up to a maximum of EUR 5,000,000.00" or with a
similar wording, for the Purchasers and the Bally Xxxxx Group
Entities as beneficiaries (the "BENEFICIARIES", and each of
them, a "BENEFICIARY"), it being provided that such guarantee
or suretyship shall be payable upon first demand and shall not
require any beneficiary to seek payment from the Seller or the
Guarantor before seeking payment from such bank (the "INITIAL
TAX GUARANTEE"). The Initial Tax Guarantee shall secure the
fulfillment of the Seller's potential payment obligations
under this Section 11. The Beneficiaries shall be
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entitled to demand payment under the Initial Tax Guarantee
only (i) directly to the respective Taxing Authority upon
presentation of an assessment notice or other decree requiring
a payment in at least the amount that is being claimed under
the Initial Tax Guarantee or (ii) upon proof that the
Beneficiaries, or any of them, have already made a payment in
at least such amount to the Taxing Authority. The Initial Tax
Guarantee shall not be deemed to violate the "first demand"
requirement set forth in the first sentence of this Section
11.7.1 if it includes the limitations set forth in the
preceding sentence. The Initial Tax Guarantee shall be for a
term until and including at least July 31, 2015.
11.7.2 The Seller and the Guarantor shall have the right to replace
the Initial Tax Guarantee by a bank guarantee for an amount
less than EUR 5,000,000.00 (five million Euros) from the same
bank or another reputable bank (the "REDUCED TAX GUARANTEE")
if and to the extent that the Seller and the Guarantor on the
one hand and the Purchasers (or any legal successor thereof)
on the other hand, acting in good faith and taking into
account all relevant information (including, in particular,
any tax assessment or other statement or decree from the
relevant Taxing Authorities which may have been issued in the
meantime), mutually determine that the realistic maximum
exposure of the Bally Xxxxx Group for the period up to and
including June 30, 2003 under the "double dip" tax issue that
is currently under review by the relevant Taxing Authorities
as a result of the pending tax audit for the years 1996
through 1999 is less than EUR 5,000,000.00 (five million
Euros). The preceding sentence shall apply mutatis mutandis to
any replacement of the Reduced Tax Guarantee by another
Reduced Tax Guarantee for an amount less than the amount of
the first Reduced Tax Guarantee. It is understood that, except
for the reduction of the guaranteed amount, a Reduced Tax
Guarantee cannot in any way deviate to the disadvantage of the
Beneficiaries from the Initial Tax Guarantee or the Reduced
Guarantee replaced by such Reduced Tax Guarantee. The
provisions set forth in Section 11.7.1 shall apply mutatis
mutandis to any Reduced Tax Guarantee.
11.7.3 The Seller and the Guarantor shall have the right to replace
the Initial Tax Guarantee or any Reduced Tax Guarantee which
may be in effect from time to time by a bank guarantee from
another reputable bank (a "SUBSTITUTE TAX GUARANTEE") at any
time (including repeatedly), it being provided, however, that
such Substitute Tax Guarantee cannot (except as set forth in
Section 11.7.2) be for a lesser amount than, and cannot
otherwise deviate to the disadvantage of the Beneficiaries
from, the Initial Tax Guarantee or Reduced Tax Guarantee
replaced by such Substitute Tax Guarantee. The provisions set
forth in Section 11.7.1 shall apply mutatis mutandis to any
Substitute Tax Guarantee.
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11.7.4 The Purchasers, KG, Verwaltungs, Automaten and Vertriebs
hereby assign (abtreten) to the Seller their future repayment
claims against the Taxing Authorities which may result from an
overpayment or from a subsequent reduction of the initial
payment obligation, and the Seller hereby accepts such
assignment. Such assignment, however, is subject to the
condition precedent that the Beneficiaries (or any of them)
have obtained payments in at least an equal total amount under
the Initial Tax Guarantee or any Reduced Tax Guarantee or any
Subsequent Guarantee.
12. SELLER'S OTHER INDEMNITIES
12.1 ENVIRONMENTAL INDEMNITY
12.1.1 The Seller and the Guarantor shall indemnify and hold harmless
the Purchasers and the Bally Xxxxx Group Entities from and
against any and all liabilities, losses, all costs and
expenses incurred in connection with (i) investigations in
connection with a clean-up or (ii) clean-up or (iii) measures
to remedy an danger to well-being or to health resulting from
a pollution or contamination of the ground, buildings, ground
water, ground air or surface water with hazardous substances
on the real estate owned or used by Bally Xxxxx Group on any
period before the Closing to the extent based on an
administrative decree (Verwaltungsakt) or on a civil law claim
unless such pollution or contamination was caused after the
Closing.
12.1.2 Any claims under this Section 12.1 shall be time barred five
(5) years after the Closing.
12.2 PAST SHAREHOLDING IN BGI
12.2.1 The Seller and the Guarantor shall indemnify and hold harmless
the Purchasers and Bally Xxxxx Group from and against any
claims, costs and liabilities in connection with Vertriebs'
past shareholding in BGI.
12.2.2 The Seller and the Guarantor hereby irrevocably waive and
shall procure a waiver of any right or claim they or any
Alliance Group Entity may have under or in connection with the
sale of BGI as described in recital (H) against the Purchasers
or any Bally Xxxxx Group Entity.
12.3 INDEMNITY WITH RESPECT TO REMUNERATION OF EMPLOYEES' INVENTIONS
12.3.1 The Seller and the Guarantor shall indemnify and hold harmless
the Purchasers and the Bally Xxxxx Group Entities from and
against any claims which will be brought against Purchasers or
a Bally Xxxxx Group Entity for a failure of Bally Xxxxx Group
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to properly remunerate their employees for service inventions
for any period ending on or before the Closing.
12.3.2 Any claims under this Section 12.3 shall be time barred
thirty-six (36) months after the Closing.
12.4 INDEMNITY WITH RESPECT TO PENDING LITIGATION
12.4.1 The Seller and the Guarantor shall indemnify and hold harmless
the Purchasers and the Bally Xxxxx Group Entities from and
against any claims raised against any Bally Xxxxx Group Entity
in the currently pending litigation initiated by J.K.
Spielhalle GmbH.
12.4.2 Any claims under this Section 12.4.2 shall be time barred six
(6) months after a final settlement or court decision.
13. PURCHASERS' REPRESENTATIONS
13.1 PRINCIPLE
Purchaser 1 hereby guarantees to the Seller by way of an independent
promise of guarantee that the statements set forth in Section 13.2 (the
"PURCHASERS' REPRESENTATIONS") are true and accurate as of the date
specified therein.
13.2 PURCHASERS' REPRESENTATIONS SPECIFIED
13.2.1 As of the Closing, the Purchasers are limited liability
companies duly incorporated and validly existing under the
laws of Germany.
13.2.2 As of the Closing, the Purchasers have obtained all requisite
shareholder approvals and have taken all other corporate
action necessary to execute and implement this Agreement and
the transactions contemplated herein. This Agreement has been
duly executed on behalf of the Purchasers.
13.2.3 As of the Closing, the execution of this Agreement does not
need be notified to the German or European antitrust
authorities.
13.3 NO FURTHER LIABILITY
Except as expressly set forth in this Agreement or as provided by
mandatory applicable law, the Seller and/or the Guarantor shall have no
right or claim (including, without limitation, for restitution in kind,
monetary damages, termination or rescission) on whatever statutory,
contractual, quasi-contractual, tort or other legal basis against the
Purchasers or any Bally
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Xxxxx Group Entity or any Bally Xxxxx Group Entity's officers,
employees, agents or advisers, in connection with any quality
(including, without limitation, the financial, earnings and legal
situation) of or any other matter relating to KG and/or Verwaltungs
and/or Automaten and/or Vertriebs and/or their respective assets and/or
liabilities and/or operations and/or the Sold Intercompany Loans and/or
any information provided in respect of any of the above.
14. USE OF COMPANY NAME, TRADEMARKS, ETC.
14.1 COMPANY NAME
14.1.1 As soon as reasonably feasible (but in any case within three
months) after the Closing, the Purchaser 1 shall take the
necessary steps to change the company names of KG and
Verwaltungs such that they no longer include the word
"Alliance" or any name or word derived therefrom or
confusingly similar thereto.
14.1.2 The Bally Xxxxx Group Entities shall not, and shall ensure (to
the extent that they have the corporate influence necessary to
do so) that their respective successors and affiliates from
time to time do not, adopt or use a company or trade name
which includes the name "Alliance" or "Bally" and/or a name or
word derived therefrom or confusingly similar thereto (other
than in the combination "Bally Xxxxx"), except for KG's and
Verwaltungs' continued use of their current company names
subject to Section 14.1.2. For as long as the Purchaser 1
holds a majority interest in the Bally Xxxxx Group, the
Purchaser 1 shall not cause or allow any Bally Xxxxx Group
Entity to violate the obligations set forth in the preceding
sentence and shall ensure and hereby guarantees that the Bally
Xxxxx Group Entities comply with such obligations.
14.1.3 In the event that any Bally Xxxxx Group Entity or any
successor entity thereto or any of their respective successors
or affiliates from time to time should at any time after the
Closing wish to engage in the Casino Business as defined
below, the respective Bally Xxxxx Group Entity or successor
entity or affiliate, as the case may be, shall:
(a) first change its company name such that the name "Bally"
or any word or name derived therefrom or confusingly
similar thereto (in each case including in combination
with the name "Xxxxx" or any word or name derived
therefrom or confusingly similar thereto) no longer
appears in such name; or
(b) conduct the Casino Business only through an affiliate
whose company or trade name does not include the name
"Bally" or any word or name derived therefrom or
confusingly similar thereto (in each case including in
combination
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with the name "Xxxxx" or any word or name derived
therefrom or confusingly similar thereto).
The Bally Xxxxx Entities shall ensure (to the extent that they
have the corporate influence necessary to do so) that their
respective successors or affiliates from time to time comply
with the obligations set forth in the preceding sentence. The
Purchaser 1 shall ensure and hereby guarantees for as long as
the Purchaser 1 holds a majority interest in the Bally Xxxxx
Group that the Bally Xxxxx Group Entities comply with the
obligations set forth in the two preceding sentences.
14.1.4 In the event that any Alliance Group Entity or any successor
entity thereto or any of their respective affiliates from time
to time should in the future wish to engage in the Wall
Machine Business as defined below, the respective Alliance
Group Entity or successor entity or affiliate, as the case may
be, shall not do so under a company or trade name including
the name "Bally" and/or "Xxxxx" and/or any word or name
derived therefrom or confusingly similar thereto. Nothing in
this Section 14.1.4 shall be construed to limit or reduce in
any way the non-compete obligations of the Seller and the
Guarantor as set forth in Section 15 hereof.
14.1.5 The "CASINO BUSINESS" shall mean the business of developing,
manufacturing and/or distribution of casino style gaming
machines as operated in Casinos, Casino-related monitoring and
other systems, as well as the owning and/or operating of
Casinos. "CASINOS" shall mean (i) for the German market,
Spielbanken (and not Arcades) and (ii) for markets outside of
Germany, gaming centers identical or highly similar to
Spielbanken (but not Arcades).
14.1.6 The "WALL MACHINE BUSINESS" shall mean the business of
developing, manufacturing and/or distribution of Wall Machines
and related monitoring and other systems as well as owning
and/or operating Arcades. "WALL MACHINES" shall mean (i) for
the German market, machines governed by Sections 1 and 2 of
the German Gaming Regulation (Spielverordnung) in the version
as of the Signing Date and (ii) for markets outside of
Germany, machines identical or highly similar to those
machines as defined above for the German market. "ARCADE"
shall mean (i) for the German market, "Spielhallen and other
operations" pursuant to Section 1 para 1 No. 2 of the German
Gaming Regulation and (ii) for markets outside of Germany,
gaming centers which identical or highly similar to those
arcades as defined above for the German market.
14.1.7 The Seller and the Guarantor acknowledge that a continuation
by Automaten and Vertriebs to do their current business under
their current names does not violate any
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rights of the Seller or the Guarantor or any other Alliance
Group Entity (including, for the avoidance of doubt, BGI), and
the Purchaser 1 and the Bally Xxxxx Entities acknowledge that
a continuation by the Alliance Group Entities (including, for
the avoidance of doubt, BGI) but excluding any entity, if any,
using the name and/or the trademark Bally Xxxxx to do business
under their currently existing names does not violate any
rights of the Purchaser 1 or any Bally Xxxxx Group Entity.
14.2 TRADEMARKS ETC.
14.2.1 The Bally Xxxxx Group Entities shall not, and shall ensure (to
the extent that they have the corporate influence necessary to
do so) that their respective successors and affiliates from
time to time do not:
(a) transfer or license the rights to any trademark, service
xxxx, trade dress, product name or logo containing the
name "Bally" and/or any word or name derived therefrom or
confusingly similar thereto (including in the combination
"Bally Xxxxx") to any third party which is active in the
Casino Business (it being understood, however, that
affiliates of the transferee or licensee may be active in
the Casino Business if the transferee or licensee is
prohibited from effecting an onward transfer to such
affiliates and from granting such affiliates a
sublicense;
(b) take any action to renew or extend the term of any
trademark or service xxxx containing the name "Bally"
(other than in the combination "Bally Xxxxx") and/or any
word or name derived therefrom or confusingly similar
thereto except for a renewal or extension of any xxxx
which contains the name "Bally" only as part of the
combination "Bally Xxxxx";
(c) use, acquire or apply for any new trademark, service
xxxx, trade dress, product name or logo containing the
name "Bally" (other than in the combination "Bally
Xxxxx") and/or any word or name derived therefrom or
confusingly similar thereto; or
(d) use, acquire or apply for any currently existing or new
trademark, service xxxx, trade dress, product name or
logo containing the name "Bally" and/or any word or name
derived therefrom or confusingly similar thereto
(including in the combination "Bally Xxxxx") for purposes
of conducting Casino Business.
It is understood, however, that the Purchaser 1 and each Bally
Xxxxx Group Entity shall remain entitled to take action as set
forth in Section 14.2.1 (a) to (d) in the Wall Machine
Business. It is further understood that the Purchaser 1 and
each Bally Xxxxx
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Group Entity shall remain entitled to take any action as set
forth in Section 14.2.1 (a) to (d), including in connection
with the Casino Business, if the respective trademark, service
xxxx, trade dress, product name or logo contains the name
"Xxxxx" but does not contain the name "Bally" and/or any word
or name derived therefrom or confusingly similar thereto. The
Bally Xxxxx Entities shall ensure (to the extent that they
have the corporate influence necessary to do so) that their
respective successors or affiliates from time to time comply
with the obligations set forth in the preceding sentence. For
as long as the Purchaser 1 holds a majority interest in the
Bally Xxxxx Group, the Purchaser 1 shall ensure and hereby
guarantees that the Bally Xxxxx Group Entities comply with the
obligations set forth in the two preceding sentences.
14.2.2 The Guarantor shall ensure and hereby guarantees that, as from
the Closing, no Alliance Group Entity, no successor entity
thereto, and none of their respective affiliates from time to
time uses, acquires or applies for any currently existing or
new trademark, service xxxx, trade dress, product name or logo
containing the name "Bally" and/or "Xxxxx" in connection with
the Wall Machine Business.
14.3 ARBITRATION
If the Seller and the Guarantor on the one hand and the Purchasers and
the Bally Xxxxx Group on the other hand disagree on whether a
particular product or service constitutes Casino Business or Wall
Machine Business, the respective Parties shall use their best efforts
to achieve an amicable resolution of such disagreement. If the
respective Parties fail to achieve such amicable resolution within
thirty (30) days after such disagreement has arisen, the respective
Parties shall agree on an arbitrator (Schiedsgutachter) to resolve such
disagreement. The decision by the arbitrator shall be conclusive and
binding on the Parties except if such decision is obviously incorrect.
If the Parties fail to agree on such arbitrator, such arbitrator shall,
upon the application of any of the Parties involved, be appointed by
the Chamber of Industry and Commerce in Frankfurt am Main, Germany. The
arbitrator shall be instructed to render his decision as soon as
possible.
15. SELLER'S AND GUARANTOR'S NON-COMPETE
For a period of two years beginning on the Closing, the Seller and the
Guarantor shall not, and the Guarantor guarantees that all other
Alliance Group Entities do not, engage in, or acquire any equity
interest in any entity (other than an interest of up to 10 % in the
outstanding share capital of any publicly traded entity) which is
active in the Wall Machine Business on the German market. Nothing in
this Section 15 shall be construed to prohibit any Alliance Group
Entity from engaging in, or acquiring an equity interest in any entity
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which engages in, any other business in or outside Germany, including,
without limitation, the Casino Business.
16. GENERAL FINANCIAL PROVISIONS
16.1 BANK FEES ETC.
Any Party making a payment under or in connection with this Agreement
shall bear any bank fees (it being understood that eventual bank fees
solely charged by the banks of the respective payee shall be borne by
such payee) and shall reimburse the payee for any such bank fees or
other expenses charged to the payee.
16.2 DEFAULT INTEREST
Whenever any Party is in default with any obligation under or in
connection with this Agreement, such Party shall be liable (i) to
compensate the creditor of such obligation for its actual loss or
damage or (ii) in the case of a payment obligation, to pay to the
creditor of such obligation default interest for the duration of the
default at a rate of 10 % p.a. (ten percent per year), whichever is
higher.
17. TRANSITIONAL PERIOD
17.1 PRE-TRANSFER COVENANTS
From the Signing Date until the earlier of (i) the Closing or (ii) July
31, 2003, the Seller shall cause the Bally Xxxxx Group Entities to
conduct their businesses only in the ordinary course consistent with
past practice and to use their best efforts to preserve intact their
business organizations, including their assets and relationships with
third parties. In particular, the Seller will not cause or permit any
of the Bally Xxxxx Group Entities to:
(a) transfer, pledge or otherwise dispose of, or incur any
obligation to transfer, pledge or otherwise dispose of,
any share or interest in any Bally Xxxxx Entity change
the corporate structure of the Bally Xxxxx Group through
any merger or spin-off or other corporate reorganization
or adopt or propose any change to its articles of
association;
(b) pay any advisory or consulting fees to any Alliance Group
Entity;
(c) enter into any agreements with any Alliance Group Entity;
(d) make any Distributions to the Seller or any other
Alliance Group Entity;
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(e) acquire or dispose of an interest in, or incorporate or
join in, any other legal entity or enter into any profit
sharing agreements;
(f) make an expenditure for fixed assets which individually
exceeds EUR 50,000.00;
(g) prepay or alter the terms of any borrowing or financial
debt or create or incur borrowing or financial debt;
(h) create, grant or issue any (i) guarantee or indemnity or
(ii) encumbrance, lien or any other third-party right or
extend or redeem an existing encumbrance, lien or any
third-party right affecting an asset, undertaking or
revenue of a Bally Xxxxx Group Entity;
(i) acquire or dispose of (i) assets (other than real estate)
except in the ordinary course of business or (ii) real
estate, or assume or incur a liability, obligation or
expense (actual or contingent) except in the ordinary
course of business;
(j) modify the terms of employment of any director, manager
or key employee; or
(k) do anything which would result in a breach of the
Seller's Representations,
in each case except with the prior approval of the Purchaser 1, which
approval shall not be unreasonably withheld.
17.2 Purchasers Right to Access
Purchasers and their advisors shall have the right of access to the
management and employees of the Bally Xxxxx Group and to its books and
records as from the Signing Date to the extent necessary to prepare for
the conduct of the Bally Xxxxx Group's business for the time after the
Closing. Purchasers and their advisors shall be entitled to prepare
actions that Purchasers intend to take after the Closing jointly with
the Bally Xxxxx Group's management, and the Seller shall instruct the
Bally Xxxxx Group's management accordingly. For the avoidance of doubt,
the Seller shall not be obliged to instruct the management of the Bally
Xxxxx Group to enter into binding legal instruments of any kind.
However, Seller shall instruct the management of the Bally Xxxxx Group
to enable the Purchasers or their financing banks, if any, to enter
into agreements in connection with the Purchasers' obligation to pay
the Aggregate Purchase Price, which agreements, however, shall be
subject to the condition precedent that the Closing occurs, except if
the Seller waives this requirement for a condition.
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18. TRANSACTION COSTS
Each Party shall bear the costs of its own advisers incurred in
connection with the preparation, negotiation, execution, and
consummation of this Agreement. The fees for the notarization of this
Agreement shall be borne by the Purchaser 1. The Seller shall not be
liable for any real estate transfer Tax.
19. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
19.1 CONFIDENTIALITY
The Parties shall keep confidential any and all information which has
become known to them in connection with the preparation of this
Agreement in reference to the respective other party and its
affiliates, except to the extent that the relevant facts are publicly
known or disclosure is legally required.
19.2 PUBLIC ANNOUNCEMENT
The Parties shall consult with each other on the wording of any press
release or similar public announcement to be made with respect to the
transactions contemplated in this Agreement.
20. NOTICES
All notices and other communications hereunder shall be in writing or
by facsimile and shall be made to the following addresses or any other
address specified by the respective Party:
(a) if to the Seller or the Guarantor:
Alliance Gaming Corporation
Attn.: General Counsel
0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
U.S.A.
with a copy to:
Freshfields Bruckhaus Xxxxxxxx
Attn.: Xxxxxxx Xxxxxxxxx and Xxx Xxxxxxxxxxx
Xxxxxxxxx Xxxxx 0
00000 Xxxxxx
Xxxxxxx
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Fax: +49 - 30 - 000 00 000
(b) if to the Purchasers:
[to be inserted]
with a copy to:
Orlando Management GmbH
Attn: Xxxx Xxxxxxxx
Xx Xxxxxx 0
00000 Xxxxxxx
Xxxxxxx
Fax: +49 - 89 - 000 00 00 00
with a further copy to:
Xxxxxxxx Chance Punder
Attn.: Xxxxx Xxxxxx and Xxxxx Xxxxxxx
Mainzer Xxxxxxxxxxx 00
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Fax: +49 - 69 - 00 00 0000.
21. GOVERNING LAW; JURISDICTION
21.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Germany.
21.2 JURISDICTION
The courts in and for Frankfurt am Main, Germany, shall have exclusive
jurisdiction for any dispute arising under or in connection with this
Agreement.
22. MISCELLANEOUS
22.1 ENTIRE AGREEMENT
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This Agreement constitutes the entire agreement, and supersedes and
replaces all prior agreements and understandings, whether written or
oral, among the parties with respect to the subject matter hereof,
including, without limitation, the Term Sheet.
22.2 INTERPRETATION
22.2.1 The headings of the sections and subsections contained herein
are for convenience and reference purposes only and shall not
affect the meaning or construction of any of the provisions
hereof.
22.2.2 Except as expressly otherwise provided herein, any reference
in this Agreement to a "Section" or "Sections" shall be
construed so as to refer to the Sections of this Agreement.
22.3 PURCHASER 1'S ELECTION RIGHT
If any Purchaser is under this Agreement entitled to any claim against
Seller or the Guarantor, Purchaser 1 may at its sole discretion,
request payment to any Bally Xxxxx Group Entity.
22.4 LANGUAGE
This Agreement is written in the English language. Any translation of
this Agreement shall be for convenience only, and whenever there is a
discrepancy between the English version and any such translation, the
English version shall prevail. The preceding sentence notwithstanding,
terms to which a German translation has been added shall be interpreted
throughout this Agreement in the meaning assigned to them by the German
translation.
22.5 SEVERABILITY
In the event that any provision of this Agreement is or becomes void or
unenforceable, the remainder of this Agreement shall continue in full
force and effect, and the parties shall promptly agree to replace such
void or unenforceable provision with the valid and enforceable
provision that achieves, to the maximum extent possible, the economic
intent and purpose of such void or unenforceable provision. The
preceding sentence shall also apply if the invalidity or
unenforceability is based on the duration or amount of an obligation
set forth herein.
22.6 WRITTEN FORM
Any amendment or supplement to this Agreement shall be legally binding
only if made in writing or, if required under applicable law, recorded
in a notarial deed.
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IN WITNESS WHEREOF this Deed including the Exhibits has been read aloud to the
persons appearing. The persons appearing then confirmed and approved this Deed
and all Exhibits and signed this Deed in their own hands as set out below. All
this was done at the day here below written in the presence of me, the Notary
Public, who also signed this Deed and affixed my official seal.
Basel, this 30th (thirtieth) day of June 2003 (two thousand and three).
A.Prot. 2003/______
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