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EXHIBIT 2.2
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STOCK PURCHASE AGREEMENT
AMONG
GETTY IMAGES INC.,
XXXX XXXXX ASSOCIATES GMBH,
UNITED BUSINESS INFORMATION B.V.,
LUDGATE HOLDINGS GMBH
AND
UNITED NEWS & MEDIA PLC
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DATED AS OF MARCH 21, 2000
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THIS AGREEMENT SHALL BE KEPT CONFIDENTIAL PURSUANT TO THE
TERMS OF THE CONFIDENTIALITY AGREEMENT BETWEEN
UNITED NEWS & MEDIA PLC AND GETTY IMAGES INC.
DATED DECEMBER 9, 1999.
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TABLE OF CONTENTS
SUMMARY OF TRANSACTION...........................................................1
ARTICLE I........................................................................2
CERTAIN DEFINITIONS AND TERMS....................................................2
1.1 Specific Definitions.....................................................2
1.2 Other Terms..............................................................6
1.3 Other Definitional Provisions............................................6
ARTICLE II.......................................................................7
PURCHASE AND SALE OF BAVARIA SHARES..............................................7
2.1 Basic Transaction........................................................7
2.2 Purchase Price...........................................................7
2.3 [Intentionally Omitted]..................................................7
2.4 Closing; Deliveries; Payment.............................................7
ARTICLE III......................................................................8
REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION........................8
3.1 Representations and Warranties of Unicorn, Holdings and UBIBV............8
(a) Organization.......................................................9
(b) Execution; Authorization of Transaction............................9
(c) Brokers' Fees......................................................9
(d) Bavaria Shares....................................................10
(e) Litigation Regarding Bavaria Shares...............................10
3.2 Representations and Warranties of the Buyer.............................10
(a) Organization......................................................10
(b) Execution; Authorization of Transaction...........................11
(c) Brokers' Fees.....................................................11
(d) Investment........................................................11
ARTICLE IV......................................................................11
REPRESENTATIONS AND WARRANTIES OF HOLDINGS CONCERNING THE BAVARIA ENTITIES......12
ARTICLE V.......................................................................12
PRE-CLOSING COVENANTS...........................................................12
5.1 General.................................................................12
5.2 Press Releases and Public Announcements.................................12
5.3 Disclosure..............................................................12
5.4 Operation of Business...................................................13
5.5 Notices; HSR............................................................15
5.6 Assistance..............................................................17
5.7 Issuance of Securities..................................................17
5.8 Other Changes...........................................................17
5.9 [Intentionally Omitted].................................................17
5.10 Bonuses.................................................................17
ARTICLE VI......................................................................18
POST-CLOSING COVENANTS..........................................................18
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6.1 Further Actions Regarding Transfer......................................18
6.2 Confidentiality.........................................................18
6.3 Covenants...............................................................18
6.4 Access to Information...................................................19
6.5 Removal of Trademarks, Etc..............................................20
6.6 Certain Taxes...........................................................20
6.7 Tax Returns; Utilization of Tax Losses..................................21
6.8 Leases..................................................................23
6.9 Indemnifying Party......................................................23
6.10 Share Options...........................................................24
ARTICLE VII.....................................................................26
CONDITIONS TO OBLIGATION TO CLOSE...............................................26
7.1 Conditions to Obligation of Buyer and Xxxx Xxxxx........................26
(a) Performance of Obligations of Holdings and UBIBV..................26
(b) Closing Documentation.............................................26
(c) Approval of Legal Matters.........................................27
(d) No Litigation.....................................................27
(e) Xxxx-Xxxxx-Xxxxxx Waiting Period..................................27
(f) Laws..............................................................27
(g) Financial Capacity................................................27
7.2 Conditions to Obligation of Unicorn, Holdings and UBIBV.................27
(a) Performance of Obligations of Buyer and Xxxx Xxxxx................28
(b) Closing Documentation.............................................28
(c) Approval of Legal Matters.........................................28
(d) No Litigation.....................................................29
(e) Xxxx-Xxxxx-Xxxxxx Waiting Period..................................29
ARTICLE VIII....................................................................29
REMEDIES FOR BREACHES OF THIS AGREEMENT.........................................29
8.1 Survival of Representations and Warranties..............................29
8.2 Indemnification Provisions for Benefit of Buyer and Xxxx Xxxxx..........30
8.3 Indemnification Provisions for Benefit of UBIBV and Holdings............31
8.4 Matters Involving Third Parties.........................................31
8.5 Sole Remedy.............................................................33
8.6 Unlimited Claims........................................................33
ARTICLE IX......................................................................34
TERMINATION.....................................................................34
9.1 Termination of Agreement................................................34
9.2 Effect of Termination...................................................34
9.3 Liquidated Damages......................................................34
ARTICLE X.......................................................................35
MISCELLANEOUS...................................................................35
10.1 Entire Agreement........................................................35
10.2 No Third-Party Beneficiaries............................................35
10.3 Succession and Assignment...............................................35
10.4 Counterparts............................................................35
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10.5 Headings................................................................36
10.6 Notices.................................................................36
10.7 Governing Law...........................................................36
10.8 Return of Information...................................................37
10.9 Amendments and Waivers..................................................37
10.10 Severability............................................................37
10.11 Expenses................................................................37
10.12 Construction............................................................38
10.13 Incorporation of Exhibits, Annexes, and Schedules.......................38
10.14 Specific Performance....................................................38
10.15 Submission to Jurisdiction..............................................38
10.16 Fulfillment of Obligations..............................................39
10.17 Schedules...............................................................39
10.18 Definition of "ordinary course".........................................39
10.19 Attorney's Fees.........................................................39
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DISCLOSURE SCHEDULE
SCHEDULE SECTION HEADING
I Intercompany Debt
S Subsidiaries
Section 3.1 Representations and Warranties (Seller Side)
Section 3.2 Representations and Warranties (Buyer Side)
Section 5.4(g) Operation of Business
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Section 4.1 Interest in Related Entities
Section 4.3 Bavaria Entities Capitalization
Section 4.4 Investments
Section 4.5 No Violations
Section 4.6 Title to Assets; Encumbrances
Section 4.7 Possession
Section 4.8 Personal Property
Section 4.10(a) Intellectual Property
Section 4.10(b) Infringement by Bavaria Entities
Section 4.10(d) Validity
Section 4.10(e) Claims
Section 4.10(f) Infringement against Bavaria Entities
Section 4.10(m) Registered Marks
Section 4.10(n) Owned Images
Section 4.10(q) Licensed Images
Section 4.10(s) Storage/Handling Contracts
Section 4.10(v) Photographer Contracts
Section 4.11 Environmental Protection
Section 4.13 Certain Changes and Events
Section 4.14 Absence of Changes
Section 4.15 Tax Matters
Section 4.16 Compliance with Laws
Section 4.17 Litigation regarding Bavaria Entities
Section 4.18 Permits
Section 4.19 Employees; Labor Relations
Section 4.20(a) Employee Benefit Plans
Section 4.20(c) Qualification; Compliance
Section 4.22 Agreements
Section 4.24 Insurance
EXHIBITS
Exhibit A Form of Joint Press Release
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STOCK PURCHASE AGREEMENT
Agreement entered into as of March 21, 2000, by and among United
Business Information B.V., a corporation organized pursuant to the laws of The
Netherlands ("UBIBV"), Ludgate Holdings GmbH, a corporation organized under the
laws of Germany ("Holdings"), United News & Media plc, an English limited
company ("Unicorn"), Xxxx Xxxxx Associates GmbH, a corporation organized under
the laws of Germany ("Xxxx Xxxxx"), and Getty Images Inc., a Delaware
corporation ("Buyer"). Buyer, UBIBV, Holdings and Unicorn are referred to
collectively herein as the "Parties" and each individually as a "Party".
SUMMARY OF TRANSACTION
WHEREAS, Holdings is the legal and beneficial owner of all of shares of
the common stock divided into one share (Geschaeftsanteil) having a par value of
DM250,000 (the "Bavaria Shares"), of VCG Deutschland GmbH, a corporation
organized under the laws of Germany ("Bavaria"), which comprise all of the
issued stock or share capital of Bavaria;
WHEREAS, Bavaria holds the aggregate nominal stated capital in the
amount of DM50,000 of Bavaria Bildagentur Verwaltungsgesellschaft mbH, a limited
liability company established and existing under the laws of Germany, registered
in the Commercial Register at the Lower Court of Munich under HRB 113725 and
having its registered office in Gauting, Germany (hereinafter "General
Partner"), and Bavaria also holds a limited partnership interest of DM100,000
being the sole Limited Partner in the limited partnership with the firm named
Bavaria Bildagentur GmbH & Co. KG, a limited partnership formed under the laws
of Germany, registered in the Commercial Register at the Lower Court of Munich
under HRA 71332 with registered offices in Gauting, Germany (hereinafter
"Bavaria KG"). The limited partnership interest which is identical in amount
with the liability capital ("Hafteinlage") is fully paid in. The General Partner
does not participate in the capital of Bavaria KG;
WHEREAS, the General Partner holds the aggregate nominal stated capital
in the amount of EURO 25,000 of its wholly-owned subsidiary iSwoop GmbH, a
limited liability company established and existing under the laws of Germany,
registered in the Commercial Register at the Lower Court of Munich under
HRB128120 and having its registered office in Gauting, Germany (hereinafter
"iSwoop GmbH");
WHEREAS, Xxxx Xxxxx desires to purchase, and Holdings desires to sell,
all of the Bavaria Shares, upon the terms and subject to the satisfaction of the
conditions set forth in this Agreement; and
NOW, THEREFORE, to effect such transactions and in consideration of the
mutual covenants, representations, warranties and agreements hereinafter set
forth and
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other good and valuable consideration, the receipt of which is hereby
acknowledged by each Party, and intending to be legally bound hereby, the
Parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS AND TERMS
1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth or as referenced below:
"Adverse Consequences" shall mean actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" shall mean with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under common control with, such
other Person at the time at which the determination of affiliation is made. As
used in this definition, the term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as applied
to any Person, means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or other ownership interests, by
contract or otherwise. (When used in relation to Buyer or Xxxx Xxxxx, the term
"Affiliate" shall include the Bavaria Entities after the Closing and when used
in relation to a Bavaria Entity the term "Affiliate" shall include Buyer and
Xxxx Xxxxx after the Closing.)
"Agreement" shall mean this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Approved Images" shall have the meaning set forth in Section 4.10.
"Authorizations" shall have the meaning set forth in Section 4.18.
"Assets" means the assets of the Bavaria Entities, including all real
and personal property owned or leased by the Bavaria Entities.
"Bavaria" shall have the meaning set forth in the recitals.
"Bavaria Entities" shall mean Bavaria and each of its Subsidiaries.
"Bavaria Financial Statements" shall have the meaning set forth in
Section 4.12.
"Bavaria Shares" shall have the meaning set forth in the recitals.
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"Benefit Plans" shall have the meaning set forth in Section 4.20.
"Books and Records" shall mean all books, ledgers, files, reports, plans
and operating records of, or maintained by or for, the Bavaria Entities.
"Business" shall mean the business of the Bavaria Entities, taken
together as a group, comprised of the licensing of still photography images to
persons in the advertising, design, publishing and corporate markets.
"Business Day(s)" shall mean any day or days other than a Saturday, a
Sunday or a United States federal holiday or a state holiday in the State of New
York.
"Buyer" shall have the meaning set forth in the recitals.
"Chosen Courts" shall have the meaning set forth in Section 10.15.
"Closing" shall mean the closing of the transactions contemplated by
this Agreement.
"Closing Date" shall have the meaning set forth in Section 2.4(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" shall mean the Agreement dated December 9,
1999 between Unicorn and Buyer.
"Contracts" shall mean any agreements, contracts, leases, purchase
orders, arrangements, commitments and licenses, whether oral or written.
"Damages" shall mean any and all costs, damages, liabilities, fines,
fees, penalties, interest obligations, deficiencies, losses, Taxes and expenses
(including, without limitation, amounts paid in settlement, interest, court
costs, costs of investigation, reasonable fees and expenses of attorneys,
accountants, actuaries, and experts, and other reasonable expenses of litigation
or mediation of any claim, default, or assessment), and diminution in value,
including incidental and consequential damages, whether or not involving a third
party claim.
"Disclosure Schedule" shall have the meaning set forth in Article IV.
"Employees" shall mean all current and former employees of the Bavaria
Entities.
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"Encumbrances" shall mean any and all mortgages, pledges, assessments,
security interests, leases, subleases, liens, adverse claims, tribal claims,
levies, charges, options, warrants, assignments, rights to possession, rights of
others or restrictions (whether on voting, sale, transfer, disposition or
otherwise) or other encumbrances of any kind, whether imposed by agreement,
understanding, law or equity, or any conditional sale contract, title retention
contract, or other contract to give or refrain from giving any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"GAAP" shall mean German generally accepted accounting standards applied
on a basis consistent with the prior practices of the Bavaria Entities.
"Governmental Authority" shall mean any court (including a court of
equity), any federal, provincial, state, county, municipal or other government
or governmental department, ministry, commission, board, bureau, agency or
instrumentality, any securities commission, stock exchange or other regulatory
or self regulatory body, any arbitrator or arbitration tribunal and any other
tribunal, whether domestic or foreign.
"Governmental Authorizations" shall mean all licenses, permits,
certificates and other authorizations and approvals required (i) with respect to
Buyer, Xxxx Xxxxx, UBIBV, Holdings or a Bavaria Entity to perform their
respective obligations hereunder and (ii) with respect to the Bavaria Entities,
to carry on its business as currently conducted or presently proposed to be
conducted under applicable laws, ordinances or regulations of any Governmental
Authority.
"Holdings" shall have the meaning set forth in the recitals.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Image" shall have the meaning set forth in Section 4.10.
"Indemnified Parties" shall have the meaning set forth in Section
8.4(a).
"Indemnifying Party" shall have the meaning set forth in Section 8.4(a).
"Intellectual Property" shall have the meaning set forth in Section
4.10.
"Intercompany Debt"shall mean the sum of $3,417,365.37 owing to Bavaria
by United Finance Limited.
"Knowledge of Seller" shall mean knowledge of at least one of the
directors and executive officers of UBIBV or at least one of the following
directors and executive officers of Visual Communications Group (VCG) B.V., a
corporation organized under
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the laws of The Netherlands: Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxx Xxxxxx (with respect only to Section 4.15) and Xxxxx Xxxxx and
Xxxxxxx Xxxxxx (with respect only to Section 4.10) and Xxxxx Xxxxxxxxx (with
respect only to Section 4.10). "Knowledge of Seller" shall include the knowledge
that any of such persons would have had if he or she had made due inquiry.
"Laws" shall mean any federal, state, foreign, or local law, statute,
ordinance, rule, regulation, order, judgment or decree.
"Leases" shall have the meaning set forth in Section 4.9.
"Licensed Images" shall have the meaning set forth in Section 4.10.
"Licensed Intellectual Property" shall have the meaning set forth in
Section 4.10.
"Listed Intellectual Property" shall have the meaning set forth in
Section 4.10.
"Material Adverse Effect" shall mean a material adverse effect on the
validity or enforceability of this Agreement, on the ability of a particular
Party to perform its obligations under this Agreement, or on the business,
operations, assets, liabilities, condition (financial or otherwise) or results
of operations of such Party.
"Material Agreement" shall have the meaning set forth in Section 4.22.
"Merger" shall have the meaning set forth in Section 4.23.
"Notarial Deed" shall have the meaning set forth in Section 2.4(b).
"Owned Images" shall have the meaning set forth in Section 4.10.
"Owned Intellectual Property" shall have the meaning set forth in
Section 4.10.
"Person" shall mean an individual, a corporation, a partnership, an
association, a limited liability company, a trust or other entity or
organization.
"Regulatory Law" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign, if any, statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are designed
or intended to prohibit, restrict or regulate (i) mergers, acquisitions or other
business combinations, (ii) foreign investment or (iii) actions having the
purpose or effect of monopolization or restraint of trade or lessening
competition.
"Returns" shall mean all information, notices, accounts, computations,
returns, declarations, reports, estimates, information returns and statements of
any nature regarding Taxes.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
"UBIBV" shall have the meaning set forth in the recitals.
"Software" shall have the meaning set forth in Section 4.10.
"Subsidiaries" shall mean any corporation, company, partnership or other
entity the majority of the voting equity or other ownership interests of which
is owned, directly or indirectly, by the entity in connection with which the
term is employed, and shall include, in the case of a partnership, any
partnership whose general partner is the entity in connection with which the
term is employed (when referring to Bavaria, "Subsidiaries" shall include
without limitation each of the entities set forth on Schedule S attached
hereto).
"Taxes" shall mean all federal, state, local or foreign taxes, charges,
duties, fees, imposts, levies or other assessments, in all cases in the nature
of taxation, including, but not limited to income, gross receipts, windfall
profits, capital, net worth, profits, corporate value added, capital duty,
severance, real property, personal property, inheritance, gift, production,
sales, use, license, excise, franchise, employment, withholding, transfer, ad
valorem, inventory, capital stock, social security, national insurance, payroll,
unemployment, severance, stamp, occupation or similar taxes, customs duties,
fees, assessments and charges of any kind whatsoever, in each case: (i) whether
computed on a separate, consolidated, combined, unitary or any other basis
(including pursuant to a statutorily imposed transferee liability); and (ii)
together with any interest, additions or penalties with respect thereto and any
interest in respect of such additions or penalties.
"Taxing Authority" shall mean the Internal Revenue Service and any other
domestic or foreign governmental authority responsible for the administration of
any Taxes.
"Xxxx Xxxxx" shall have the meaning set forth in the recitals.
"Unapproved Images" shall have the meaning set forth in Section 4.10.
"Unicorn" shall have the meaning set forth in the recitals.
1.2 OTHER TERMS. Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have the meaning
specifically ascribed to such terms wherever such terms appear elsewhere in this
Agreement.
1.3 OTHER DEFINITIONAL PROVISIONS.
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(a) References in this Agreement to "Sections," "Articles,"
"Exhibits," "Annexes" and "Schedules" are to sections, articles, exhibits,
annexes and schedules herein and hereto unless otherwise indicated. Unless
otherwise set forth herein, references in this Agreement to any document,
instrument or agreement (including, without limitation, this Agreement) (i)
shall include all exhibits, annexes, schedules and other attachments thereto,
(ii) shall include all documents, instruments or agreements issued or executed
in replacement thereof and (iii) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified or
supplemented from time to time in accordance with its terms and in effect at any
given time.
(b) Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular or plural.
(c) The words "hereof", "herein", and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(d) References to any statute or statutory provision shall be
construed as a reference to such statute or statutory provision as in force at
the date of this Agreement and as respectively subsequently amended, re-enacted
or consolidated.
ARTICLE II
PURCHASE AND SALE OF BAVARIA SHARES
2.1 BASIC TRANSACTION. On the terms and subject to the conditions of
this Agreement, and in reliance upon the representations and warranties of the
Parties herein, at the Closing, Xxxx Xxxxx agrees to purchase from Holdings, and
Holdings agrees to sell, transfer and convey to Xxxx Xxxxx, all of the Bavaria
Shares for the consideration specified in Section 2.2 hereof.
2.2 PURCHASE PRICE. At the Closing, as the Purchase Price to be paid by
Xxxx Xxxxx for the Bavaria Shares, Xxxx Xxxxx shall pay to Holdings the
aggregate sum of $17,000,000 plus the amount of Intercompany Debt (the "Purchase
Price").
2.3 [INTENTIONALLY OMITTED]
2.4 CLOSING; DELIVERIES; PAYMENT.
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Xxxxxx, Xxxxxxx & Xxxxxxx at
Two Wall Street, New York, New York, commencing at 10:00 a.m. local time on
March 26, 2000, or at such other, or such additional, time and place as the
Parties hereto may mutually agree (the "Closing Date"). The Closing shall be
deemed to have occurred at 12:01 a.m. local time, on the Closing Date.
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(b) At Closing, Holdings and Xxxx Xxxxx shall cause a notary capable
and authorized to execute a notarial deed of transfer of the Bavaria Shares (the
"Notarial Deed") between Holdings and Xxxx Xxxxx, whereas Holdings will in such
deed, as sole shareholder of Bavaria grant its approval to the share transfer to
Xxxx Xxxxx. Furthermore, the parties will request the notary to inform the
management of Bavaria about the share transfer. Simultaneously to the signing of
this Agreement UBIBV and Holdings will sign powers of attorney in the required
legal form to enable Xxxx Xxxxx to acquire the Bavaria Shares on the basis of
the notarial transfer deed in the agreed form. The Bavaria Shares shall be
delivered to Xxxx Xxxxx free and clear of all liens, pledges, encumbrances,
claims, security interests, charges, voting trusts, voting agreements, other
agreements, rights, options, warrants or restrictions or claims of any kind,
nature or description, other than pursuant to this Agreement. At the Closing,
UBIBV and Holdings shall also deliver such certificates, instruments, and
documents as are required of UBIBV under the terms and provisions of this
Agreement, all of which shall be in form and substance reasonably satisfactory
to Buyer and Xxxx Xxxxx.
(c) At the Closing, Xxxx Xxxxx shall pay the Purchase Price to
Holdings for the Bavaria Shares in immediately available funds by wire transfer
to such account(s) as shall be designated by Holdings in writing at least two
(2) full Business Days prior to the Closing. Buyer and Xxxx Xxxxx shall deliver
such certificates, instruments and documents as are required of Buyer and Xxxx
Xxxxx under the terms and provisions of this Agreement, all of which shall be in
form and substance reasonably satisfactory to Holdings.
(d) On the Closing Date, Holdings will cause United Finance Limited
to settle the Intercompany Debt and shall put United Finance Limited in funds to
do so in an amount equal to the Intercompany Debt. If and to the extent that
following payment of all Intercompany Debt any amount is or may become payable
by any of the Bavaria Entities to Holdings or any Affiliate of Holdings (other
than a Bavaria Entity), or by Holdings or any Affiliate of Holdings to any
Bavaria Entity, the occurrence of Closing shall take effect as a waiver by UBIBV
and Holdings, each for itself and on behalf of each of their Affiliates, of any
amount so payable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE TRANSACTION
3.1 REPRESENTATIONS AND WARRANTIES OF UNICORN, HOLDINGS AND UBIBV.
Unicorn, Holdings and UBIBV jointly and severally represent and warrant to Buyer
and Xxxx Xxxxx that the statements contained in this Section 3.1 are correct and
complete with respect to itself as of the February 27, 2000 and will be correct
and complete with respect to itself as of the Closing Date (as though made then
and as though the Closing
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Date were substituted for the date of this Agreement throughout this Section
3.1), except as set forth in Section 3.1 of the Disclosure Schedule attached
hereto.
(a) Organization. Each of Unicorn, Holdings and UBIBV is a company
duly organized and validly existing under the laws of its jurisdiction of
organization and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
(b) Execution; Authorization of Transaction. Each of Holdings, UBIBV
and Unicorn has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, subject to the receipt of
the approvals, consents and authorizations contemplated hereby. This Agreement
has been duly and validly authorized, executed and delivered by each of
Holdings, UBIBV and Unicorn and constitutes a legal, valid and binding
obligation of Holdings, UBIBV and Unicorn, enforceable against each of them in
accordance with its terms and conditions, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. Except for filings, permits, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the HSR Act and
as otherwise set forth in Section 3.1 to the Disclosure Schedule, no filing with
or notice to, and no permit, authorization, consent or approval of, any
Governmental Authority is necessary for the execution and delivery by each of
Holdings, UBIBV and Unicorn of this Agreement or the consummation by each of
them of the transactions contemplated hereby, except where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings or
give such notice do not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither the
execution, delivery and performance of this Agreement by each of Holdings, UBIBV
and Unicorn nor the consummation by them of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
respective articles of association or bylaws (or similar governing documents) of
Holdings, UBIBV, Unicorn or any of the Bavaria Entities, or (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or lien) under, any of the terms, conditions or
provisions of any Law applicable to Holdings, UBIBV, Unicorn or any of the
Bavaria Entities or any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which Holdings, UBIBV,
Unicorn or any of the Bavaria Entities is a party or by which any of them or any
of their respective properties or assets may be bound, except in the case of
violations, breaches or defaults which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(c) Brokers' Fees. None of Holdings, UBIBV or Unicorn has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
the Bavaria Entities or Buyer or Xxxx Xxxxx could become liable or obligated.
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(d) Bavaria Shares. Holdings is the legal and beneficial owner of
all of the Bavaria Shares, free and clear of any restrictions on transfer (other
than any restrictions under the Securities Act, state securities laws and
restrictions on transfer set forth in the Articles of Association of Bavaria),
Taxes, Encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Holdings is not a party to any option, warrant,
purchase right, or other contract or commitment that could require Holdings to
sell, transfer, or otherwise dispose of any capital stock of Bavaria (other than
this Agreement). Holdings is not a party to any trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of Bavaria. The
Bavaria Shares owned by Holdings constitute 100% of the outstanding voting
capital of Bavaria. No dividends or other distributions of cash or property have
been declared on the Bavaria Shares to any person which are due and/or have
remained unpaid.
(e) Litigation Regarding Bavaria Shares. There are no actions,
suits, claims, investigations or legal or administrative or arbitration (or
other binding alternative dispute resolution) proceedings pending or, to the
Knowledge of Seller, threatened by or against: (I) Holdings, relating to the
Bavaria Shares owned by Holdings, or (II) UBIBV or Holdings relating to this
Agreement and/or the transactions contemplated hereby, before any court,
governmental agency or other body, and no judgment, order, writ, injunction,
decree or other similar command of any court or governmental agency or other
body has been entered against or served upon: (I) Holdings, relating to the
Bavaria Shares owned by Holdings, or (III) UBIBV or Holdings relating to this
Agreement and/or the transactions contemplated hereby.
3.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyer represents and
warrants to Holdings and UBIBV that the statements contained in this Section 3.2
are correct and complete as of February 27, 2000 and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section
3.2), except as set forth in Section 3.2 of the Disclosure Schedule attached
hereto.
(a) Organization. Each of Buyer and Xxxx Xxxxx is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
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(b) Execution; Authorization of Transaction. Each of Buyer and Xxxx
Xxxxx has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, subject to the receipt of
the approvals, consents and authorizations contemplated hereby. This Agreement
has been duly and validly authorized, executed and delivered by Buyer and Xxxx
Xxxxx and constitutes a legal, valid and binding obligation of Buyer and Xxxx
Xxxxx, enforceable in accordance with its terms and conditions, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. Except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the HSR Act and as otherwise set forth in Section 3.2 to the
Disclosure Schedule, no filing with or notice to, and no permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery by Buyer and Xxxx Xxxxx of this Agreement or the
consummation by Buyer and Xxxx Xxxxx of the transactions contemplated hereby,
except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings or give such notice do not or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Neither the execution, delivery and performance of this
Agreement by Buyer and Xxxx Xxxxx nor the consummation by Buyer and Xxxx Xxxxx
of the transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the articles of incorporation or bylaws (or similar
governing documents) of Buyer or Xxxx Xxxxx, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or lien) under, any of the terms, conditions or provisions of any
Law applicable to Buyer or Xxxx Xxxxx or any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Buyer or Xxxx Xxxxx is a party or by which Buyer, Xxxx Xxxxx or any of their
properties or assets may be bound, except in the case of violations, breaches or
defaults which do not or would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(c) Brokers' Fees. Neither Buyer nor Xxxx Xxxxx has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Holdings,
UBIBV or Bavaria could become liable or obligated.
(d) Investment. Xxxx Xxxxx is acquiring the Bavaria Shares solely
for the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act. Buyer and
Xxxx Xxxxx acknowledge that the Bavaria Shares are not registered under the
Securities Act or any applicable state securities law, and that such Bavaria
Shares may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulation as applicable.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
OF HOLDINGS CONCERNING THE BAVARIA ENTITIES
Holdings represents and warrants to Buyer and Xxxx Xxxxx, as of February
27, 2000 and as of the Closing Date (except that representations and warranties
that are made as of a specific date need to be true only as of such date), as
provided in Annex A hereto, subject to and except as disclosed in the Disclosure
Schedule delivered by Holdings to Buyer and Xxxx Xxxxx and initialed by the
Parties (the "Disclosure Schedule"). For purposes of this Agreement the
disclosure of any matter in any Section of the Disclosure Schedule shall serve
as sufficient disclosure for purposes of all of the representations and
warranties contained in Annex A hereto as to which the descriptive nature of the
disclosure provides sufficient notice of the materials, facts or items described
therein to indicate such disclosure's relevancy to other representations and
warranties.
ARTICLE V
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
5.1 GENERAL. Each of the Parties will use its commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Article VII below).
5.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue or
cause to be issued any press release or make or cause to be made any public
announcement relating to the subject matter of this Agreement prior to the
Closing (except for the joint press release to be made on or about the Closing
Date in the form attached hereto as Exhibit A), without the prior written
approval of the other Parties; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law, as a
result of being listed on an exchange or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its best efforts to advise the other Parties prior to making the
disclosure). The provisions of this Section 5.2 shall supersede any conflicting
provision contained in the Confidentiality Agreement.
5.3 DISCLOSURE. All information delivered to Buyer and Xxxx Xxxxx by
UBIBV, Holdings or the Bavaria Entities, or to which Buyer and Xxxx Xxxxx have
been provided access by UBIBV, Holdings or the Bavaria Entities or in connection
with this Agreement and the transactions contemplated hereby shall be subject to
the terms of the
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Confidentiality Agreement, which Confidentiality Agreement shall survive the
Closing or any termination of this Agreement.
5.4 OPERATION OF BUSINESS. Except as contemplated by this Agreement,
Holdings shall procure that each of the Bavaria Entities, shall conduct its
operations in the ordinary and usual course of business consistent with past
practice and, to the extent consistent therewith, with no less diligence and
effort than would be applied in the absence of this Agreement, use their
commercially reasonable efforts: (i) to preserve intact its current business
organizations, and (ii) to keep available the service of its current officers
and employees and to preserve its relationships with customers, suppliers and
others having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired at the Closing Date. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or in the Disclosure Schedule, prior to the Closing Date no Bavaria
Entity will, without the prior written consent of Buyer and Xxxx Xxxxx:
(a) amend its certificate of incorporation or bylaws (or other
similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including, without limitation, any stock
options or stock appreciation rights);
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire any of its securities or any securities of any of its
subsidiaries;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of itself or any of its subsidiaries;
(e) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any subsidiary;
(f) (i) incur or assume any long-term or short-term debt or issue
any debt securities, except for borrowings under existing lines of credit in the
ordinary and usual course of business consistent with past practice and in
amounts not material to the Bavaria Entities taken as a whole; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of
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any other person, except in the ordinary and usual course of business consistent
with past practice and in amounts not material to the Bavaria Entities, taken as
a whole, and except for obligations of the wholly-owned Subsidiaries of Bavaria;
(iii) make any loans, advances or capital contributions to, or investments in,
any other person (other than to the wholly-owned Subsidiaries of Bavaria or
customary loans or advances to employees in the ordinary and usual course of
business consistent with past practice and in amounts not material to the maker
of such loan or advance); (iv) pledge or otherwise encumber shares of capital
stock of any of the Bavaria Entities; or (v) mortgage or pledge any of its
material assets, tangible or intangible, or create or suffer to exist any
material Lien thereupon;
(g) except as may be required by Law or as contemplated by this
Agreement, enter into, adopt or amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation right,
restricted stock, performance unit, stock equivalent, stock purchase agreement,
pension, retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund, award or other arrangement for
the benefit or welfare of any director, officer or employee in any manner, or
(except as set forth in Section 5.4(g) of the Disclosure Schedule, as required
under existing agreements, and hiring and compensation adjustments occurring in
the ordinary course of business consistent with past practices) increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
February 27, 2000 (including, without limitation, the granting of stock
appreciation rights or performance units);
(h) acquire, sell, lease or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to the Bavaria Entities taken as a
whole, enter into any commitment or transaction outside the ordinary and usual
course of business consistent with past practice or grant any exclusive
distribution rights;
(i) except as may be required as a result of a change in Law or in
GAAP, change any of the accounting principles or practices used by it;
(j) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary and usual course of business
consistent with past practice or as required by GAAP;
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(k) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement, other than in the ordinary and usual course of business consistent
with past practice, or amend in any material respect any of the Material
Agreements (iii) authorize any new capital expenditure or expenditures which,
individually, are in excess of $60,000 or, in the aggregate, are in excess of
$250,000 or (iv) enter into or amend any contract, agreement, commitment or
arrangement providing for the taking of any action that would be prohibited
hereunder; provided that notwithstanding the foregoing each Bavaria Entity shall
continue to make any capital expenditure in accordance with any capital
expenditure plan in existence at February 27, 2000;
(l) make or revoke any Tax election, or settle or compromise any Tax
liability or change (or make a request to any taxing authority to change) any
aspect of its method of accounting for Tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction contemplated by
this agreement or in the ordinary and usual course of business consistent with
past practice of liabilities reflected or reserved against in the consolidated
financial statements of Bavaria and its Subsidiaries, or otherwise incurred in
the ordinary and usual course of business consistent with past practice, or
waive the benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which any of the Bavaria Entities is a party;
provided that each Bavaria Entity shall continue to pay its creditors as they
fall due in the period up to the Closing Date consistent with past practices;
(n) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(o) enter into any agreement or arrangement that limits or otherwise
restricts the Bavaria Entities or any successor thereto or that could, after the
Closing Date, limit or restrict the Bavaria Entities or any successor thereto,
from engaging or competing in any line of business or in any geographic area;
(p) commit to any new expenditure in respect to iSwoop; or
(q) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.4(a) through 5.4(p) or any action
which would make any of the representations or warranties of Holdings contained
in this Agreement (i) which are qualified as to materiality untrue or incorrect
or (ii) which are not so qualified untrue or incorrect in any material respect.
5.5 NOTICES; HSR. (a) Each of the Parties will give any notices to, make
any filings with, and use its reasonable commercial efforts (in the case of
Buyer, subject to
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the provisions of Section 5.5(c) below) to obtain any authorizations, consents,
and approvals of governments and governmental agencies in connection with the
matters referred to in Section 3.1(b) and Section 3.2(b) above. Without limiting
the generality of the foregoing, each of the Parties (or appropriate Affiliates)
have filed the Notification and Report Forms and related material were required
to be filed with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice (the "DOJ") under the HSR
Act, and each of the Parties will make (and UBIBV and Holdings will cause their
appropriate Affiliates to make) any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith. Any filing fees
required in connection with filings under the HSR Act shall be borne by Buyer.
(b) Each of Bavaria and Buyer shall use its reasonable efforts to
(i) cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to the DOJ, the FTC or any other Governmental Authority and of any material
communication received or given in connection with any proceeding by a private
party, in each case regarding any of the transactions contemplated hereby, and
(iii) consult with each other in advance to the extent practicable of any
meeting or conference with the DOJ, the FTC or any such other Governmental
Authority or, in connection with any proceeding by a private party, with any
other Person, and to the extent permitted by the DOJ, the FTC or such other
applicable Governmental Authority or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenant of Buyer
set forth in Sections 5.5(a) and (b) above, if any administrative or judicial
action or proceeding, including any proceeding by a private party, is instituted
(or threatened to be instituted) challenging any transaction contemplated by
this Agreement as violative of any Regulatory Law, or if any statute, rule,
regulation, executive order, decree, injunction or administrative order is
enacted, entered, promulgated or enforced by a Governmental Authority which
would make this Agreement or the other transactions contemplated hereby illegal
or would otherwise prohibit or materially impair or delay the consummation of
this Agreement or the other transactions contemplated hereby, Buyer shall use
its best efforts, including without limitation, selling, holding separate or
otherwise disposing of or conducting its business in a specified manner, or
agreeing to sell, hold separate or otherwise dispose of or conduct its business
in a specified manner or permitting the sale, holding separate or other
disposition of, any assets of Buyer or its Subsidiaries or Affiliates or the
conducting of their business in a specified manner, to vigorously contest and
resist any such action or proceeding and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents or
restricts the consummation of this Agreement or the other transactions
contemplated hereby and to have such statute, rule, regulation, executive order,
decree, injunction or
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administrative order repealed, rescinded or made inapplicable so as to permit
the consummation of the transactions contemplated by this Agreement.
5.6 ASSISTANCE. Subject to Section 5.3 hereof, UBIBV and Holdings shall
provide Buyer and Xxxx Xxxxx with such assistance as they may reasonably request
and shall generally assist Buyer with respect to the introduction of Buyer and
Xxxx Xxxxx, and their representatives and agents, to appropriate governmental
agencies or officials having regulatory jurisdiction over the Business and shall
cooperate generally with Buyer and Xxxx Xxxxx in all reasonable respects,
including, with limitation, communications with employees, customers and
suppliers.
5.7 ISSUANCE OF SECURITIES. Except as otherwise contemplated hereby
neither UBIBV nor Holdings shall permit any of the Bavaria Entities to (i) issue
any debt or equity security or any options or warrants, (ii) enter into any
subscriptions, agreements, plans or other commitments pursuant to which any of
the Bavaria Entities is or may become obligated to issue any shares of its
capital stock or any securities convertible into shares of its capital stock,
(iii) otherwise change or modify its capital structure, (iv) make interim
distributions, (v) engage in any reorganization or similar transaction, or (vi)
agree to take any of the foregoing actions.
5.8 OTHER CHANGES. Holdings and/or the Bavaria Entities may (i) make
capital expenditures of an emergency nature required to avoid imminent material
damage to or shutdown of the Business, or reasonably necessary for safety
reasons, (ii) take such actions as may be required by law, (iii) change, for any
Employee who is not exempt from the overtime provisions of the Fair Labor
Standards Act, the method of calculating the regular rate of pay for overtime
pay calculation purposes to using a weighted average of the different rates
earned by the Employee during the workweek.
5.9 [INTENTIONALLY OMITTED]
5.10 BONUSES. At the Closing Date, Holdings shall procure that no
amounts in the nature of bonus payments will remain payable by any Bavaria
Entity to any of its employees or former employees (i) for the calendar year
ended December 31, 1999, or (ii) in the nature of "stay or loyalty bonuses"
payable to any employee of a Bavaria Entity in connection with the transactions
contemplated by this Agreement.
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ARTICLE VI
POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing:
6.1 FURTHER ACTIONS REGARDING TRANSFER. From and after the Closing, each
Party hereto shall, if reasonably requested by any other Party, execute and
deliver such further instruments of conveyance and transfer and take such other
reasonable action as may be necessary or desirable to provide more effectively
the sale and transfer of the Bavaria Shares to Xxxx Xxxxx.
6.2 CONFIDENTIALITY. For a period of three years after the Closing,
UBIBV, Holdings, Unicorn and their Affiliates shall not divulge, furnish or make
available, to anyone (other than Buyer, UBIBV, Holdings, Unicorn and their
respective Affiliates) any knowledge or information with respect to any
proprietary information of the Bavaria Entities. This Section 6.2 shall not
apply to any such proprietary information which (i) shall have entered the
public domain or become available to the public through no act or omission of
UBIBV, Holdings, Unicorn or any Affiliate of the foregoing, (ii) shall have
become available to UBIBV, Holdings, Unicorn or any Affiliate of the foregoing
from a third party whom UBIBV, Holdings, Unicorn or such Affiliate of the
foregoing reasonably believes is not obligated to the Bavaria Entities or Buyer
or Xxxx Xxxxx to keep such proprietary information confidential, or (iii) shall
be required by law to be disclosed.
6.3 COVENANTS. Each of UBIBV, Holdings, Unicorn and their Affiliates
undertakes with the Buyer and Xxxx Xxxxx that, without the prior written consent
of Buyer it will not and it will procure that none of their respective
Affiliates will:
(a) for the period of 3 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any person
carry on or be engaged, concerned or interested (directly or indirectly and
whether as principal, shareholder, agent, consultant, partner or otherwise) in
carrying on the Business, provided, however, that the provisions of this Section
6.3(a) shall in no way be construed to restrict UBIBV, Holdings, Unicorn and
their Affiliates that are currently engaged in an activity that competes with
the Business from continuing to engage in such activity at levels which are not
materially greater than the levels at which such activity is currently
conducted; or
(b) for the period of 3 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any other
person, solicit or endeavor to entice away from any Bavaria Entity, with a view
to obtaining its business in relation to the business, any person who is (and
was at the Closing Date) a customer of a Bavaria Entity; or
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(c) for the period of 3 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any person,
employ, solicit or endeavor to entice away from any Bavaria Entity any person
employed or engaged by any Bavaria Entity in an executive or managerial
capacity, whether or not such person would commit a breach of contract by reason
of leaving service or office, except for Xxx Xxxxxxx and Xxxxxx Xxxxx. For
purposes of this section 6.3(c), bona fide public advertisements shall not be
deemed to constitute "solicitation" or "enticement" in violation of the
provisions hereof; or
(d) Notwithstanding the foregoing, none of UBIBV, Holdings, Unicorn
and their Affiliates shall, either on its own account or in conjunction with or
on behalf of any person, employ solicit or endeavour to entice Xxxxxxx Xxxxxxx
away from Buyer or Buyer's Affiliates for so long as Xx Xxxxxxx is employed by
Buyer or one of Buyer's Affiliates, provided, however, that the foregoing
restriction shall not apply in the event that, by the Closing Date, Xx Xxxxxxx
has not agreed to become an employee of Buyer or one of Buyer's Affiliates
following the Closing Date.
6.4 ACCESS TO INFORMATION.
(a) In order to facilitate the resolution of any third-party claims
made by or against or incurred by or indemnified by UBIBV prior to or after the
Closing, upon reasonable notice, Buyer and Xxxx Xxxxx shall, after the Closing:
(i) afford the officers, employees and authorized agents and representatives of
UBIBV and Holdings reasonable access, during normal business hours, to the
offices, properties, books and records of Buyer, Xxxx Xxxxx and the Bavaria
Entities with respect to the Business for the period prior to the Closing; (ii)
furnish to the officers, employees and authorized agents and representatives of
UBIBV and Holdings such additional financial and other information regarding the
Business for the period prior to the Closing as Buyer, Xxxx Xxxxx or any Bavaria
Entity has in its possession and UBIBV and Holdings may from time to time
reasonably request; and (iii) make available to UBIBV and Holdings, the
employees of Buyer, Xxxx Xxxxx and the Bavaria Entities whose assistance,
testimony or presence is necessary to assist UBIBV and Holdings in evaluating
any such claims and in defending such claims, including the presence of such
persons as witnesses in hearings on trials for such purposes; provided, however,
that such investigation shall not unreasonably interfere with the businesses or
operations of Buyer, Xxxx Xxxxx or any of their Affiliates; and provided,
however, that Buyer and Xxxx Xxxxx shall not be obligated to disclose any
information which they or any of their Affiliates holds under a legally binding
obligation of confidentiality or which is protected by any privilege.
(b) In order to facilitate the resolution of any third-party claims
made by or against or incurred by Buyer or Xxxx Xxxxx after the Closing, upon
reasonable notice, UBIBV and Holdings and, with respect to Taxes, Unicorn shall,
after the Closing: (i) afford the officers, employees and authorized agents and
representatives of Buyer and Xxxx Xxxxx reasonable access, during normal
business hours, to the offices, properties, books and records of UBIBV and
Holdings (and, as regards Taxes, of Unicorn) with
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respect to the Business and the Assets for the period prior to the Closing; (ii)
furnish to the officers, employees and authorized agents and representatives of
Buyer and Xxxx Xxxxx such additional financial and other information regarding
the Business and the Assets for the period prior to the Closing as Buyer and
Xxxx Xxxxx may from time to time reasonably request; and (iii) make available to
Buyer and Xxxx Xxxxx the employees of UBIBV and Holdings (and, as regards Taxes
of any Bavaria Entity, of Unicorn) whose assistance, testimony or presence is
necessary to assist Buyer in evaluating any such claims and in defending such
claims, including the presence of such persons as witnesses in hearings or
trials for such purposes; provided, however, that such investigation shall not
unreasonably interfere with the businesses or operations of UBIBV, Holdings,
Unicorn or any of their Affiliates; and provided, however, that neither UBIBV
nor Holdings nor Unicorn shall be obligated to disclose any information which it
or any of its Affiliates holds under a legally binding obligation of
confidentiality or which is protected by any privilege.
6.5 REMOVAL OF TRADEMARKS, ETC. As promptly as practicable after the
Closing, and in no event later than ninety (90) days after the Closing Date,
Buyer and Xxxx Xxxxx agree to (and will cause the Bavaria Entities to) cease use
of and to delete, remove or otherwise obliterate from the Assets, and from all
packaging, advertisements, marketing and promotional materials and other
materials used by the Bavaria Entities, all trade names and trademarks of UBIBV,
Holdings and their Affiliates, including, but not limited to, references to
"United News & Media" "UNM" and derivatives thereof, and logos associated
therewith, provided, however, that for a period of six months following the
Closing Date, Buyer, Xxxx Xxxxx and their Affiliates shall be permitted to
dispose of inventory included in the Assets on the Closing Date which bears the
trade names or trade-marks of UBIBV, Holdings and their Affiliates, and provided
further that Buyer, Xxxx Xxxxx and their Affiliates may, following the Closing
Date, ship, deliver and display catalogs bearing such trade names or trademarks
which have been produced prior to the Closing Date.
6.6 CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
registration and other similar taxes and fees (including any penalties and
interest, but excluding taxes imposed on income) incurred in connection with
this Agreement, shall, whether imposed upon UBIBV, Holdings, Buyer, Xxxx Xxxxx
or any Bavaria Entity, be borne by Buyer or Xxxx Xxxxx. UBIBV and Holdings will
file all necessary Returns and other documentation with respect to all such
taxes, and, if required by applicable law, Buyer and Xxxx Xxxxx will, and will
cause the Bavaria Entities to, join in the execution of any such Returns and
other documentation. All costs and expenses incurred in connection with UBIBV's
and Holdings' filing of Returns hereunder shall be borne by Buyer or Xxxx Xxxxx.
Buyer, Xxxx Xxxxx and each of UBIBV and Holdings further agree (and each shall
cause the Bavaria Entities to), upon request, to use their best efforts to
obtain any certificate or other document from any governmental authority or any
other Person as may be necessary to mitigate, reduce or eliminate any such tax
that could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).
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6.7 TAX RETURNS; UTILIZATION OF TAX LOSSES.
(a) In respect of any Tax accounting period of any Bavaria Entity
ending on or before the Closing Date, Holdings and such of Holdings' Affiliates
as are legally competent to do so ("the Surrendering Companies") shall be
entitled (but not required) to surrender and Buyer and Xxxx Xxxxx shall procure
that the relevant Bavaria Entity shall cooperate with the Surrendering Companies
to accept, receive or utilize some or all Tax losses of the relevant
Surrendering Company so as to reduce or extinguish any pre-Closing Tax liability
of the Bavaria Entity.
(b) To the extent that a Tax loss surrendered in accordance with
paragraph (a) above reduces or eliminates a Tax liability for any 1999 Tax
accounting period that was provided for in the Bavaria Financial Statements,
Buyer and Xxxx Xxxxx shall cause the relevant Bavaria Entity to pay as
consideration to the relevant Surrendering Company an amount certified by
Bavaria's auditors to be equal to the difference between (i) the Tax otherwise
due and payable absent such surrender and (ii) the Tax due and payable taking
into account such surrender. Any payments that are due to be made by the
relevant Bavaria Entity hereunder shall be made on the date on which the Tax
that is saved by virtue of such surrender would otherwise first have been due
and payable. To the extent that a Tax liability for any 1999 Tax accounting
period is either paid to the relevant Taxing Authority or reduced by reasons of
a Tax loss surrendered by a Surrendering Company that is reimbursed pursuant to
this Section 6.7(b), the accrual or reserve for Taxes in the Bavaria Financial
Statements shall be reduced for purposes of Section 8.2(c) hereof.
(c) To the extent that a Tax loss surrendered in accordance with
Section 6.7(a) reduces or eliminates a Tax liability that was not provided for
in the Bavaria Financial Statements, in respect of a 1999 Tax accounting period,
no payment shall be made therefor by the relevant Bavaria Entity but the full
value or benefit of such surrender to the relevant Bavaria Entity shall be taken
into account when computing the amount of any Adverse Consequences suffered by
any relevant Bavaria Entity.
(d) (i)Holdings, or its duly authorized agents, shall be responsible
for and have the conduct of preparing, submitting and agreeing all Returns of
the Bavaria Entities (and correspondence and other documentation relating
thereto) with respect to Tax accounting periods ending on or before the December
31, 1999, subject to all such Returns being submitted in draft form to Buyer or
to Buyer's duly authorized agent for comment at least 42 days before the same
are due to be submitted to the relevant Taxing Authority. Buyer or Buyer's
agents shall within 21 days of such submission provide written comments thereon
to Holdings and if Holdings shall not have received comments within that period,
Buyer shall be deemed to have approved such draft Returns. Such deemed approval
shall not by itself constitute a waiver of Buyer's other rights, if any, under
this Agreement. If Buyer or Buyer's agents shall have made any written comments
in accordance with the provisions of this Section, Holdings shall not
unreasonably refuse to adopt such comments provided that Holdings and Holdings'
agents shall not be
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obliged to submit any Return to any relevant Taxing Authority unless reasonably
satisfied that it is accurate and complete in all material respects. UBIBV and
Holdings, on the one hand, and Buyer and Xxxx Xxxxx, on the other hand, shall
respectively afford (or procure to be afforded) to the other or to the other's
agents such information and assistance as may reasonably be required to prepare,
submit and agree all relevant Returns.
(ii) Holdings, or its duly authorized agents, shall be responsible
for and have the conduct of preparing, submitting and agreeing to the relevant
fiscal unity Returns of the Bavaria Entities for Tax accounting periods
beginning prior to the Closing Date (and correspondence and other documentation
relating thereto) subject to all such returns being submitted in draft form to
Buyer or to Buyer's duly authorized agent for comment at least 42 days before
the same are due to be submitted to the relevant Taxing Authority. Buyer or
Buyer's agents shall within 21 days of such submission provide written comments
thereon to Holdings and if Holdings shall not have received comments within that
period, Buyer shall be deemed to have approved such draft Returns. Such deemed
approval shall not by itself constitute a waiver of Buyer's other rights, if
any, under this Agreement. If Buyer or Buyer's agents shall have made any
written comments in accordance with the provisions of this Section, Holdings
shall not unreasonably refuse to adopt such comments provided that Holdings and
Holdings' agents, shall not be obliged to submit any Return to any relevant
Taxing Authority unless reasonably satisfied that it is accurate and complete in
all material respects. UBIBV and Holdings, on the one hand, and Buyer, on the
other hand, shall respectively afford (or procure to be afforded) to the other
or to the other's agents such information and assistance as may reasonably be
required to prepare, submit and agree all relevant Returns.
(iii) Except as provided in Section 6.7(d)(ii), Buyer, or its duly
authorized agents, shall be responsible for and have the conduct of preparing,
submitting and agreeing all Returns (and correspondence and other documentation
relating thereto) of Bavaria Entities for Tax accounting periods beginning on or
after January 1, 2000, subject to all such Returns for which Buyer will seek
indemnification under Section 8.2(c) hereof being submitted in draft form to
UBIBV or to UBIBV's duly authorized agent for comment at least 42 days before
the same are due to be submitted to the relevant Taxing Authority. UBIBV or
UBIBV's agents shall within 21 days of such submission provide written comments
thereon to Buyer and if Buyer shall not have received comments within that
period, UBIBV shall be deemed to have approved such draft Returns. Such deemed
approval shall not by itself constitute a waiver of UBIBV's other rights, if
any, under this Agreement. If UBIBV or UBIBV's agents shall have made any
written comments in accordance with the provisions of this Section, Buyer shall
not unreasonably refuse to adopt such comments provided that Buyer and Buyer's
agents shall not be obliged to submit any Return to any relevant Taxing
Authority unless reasonably satisfied that it is accurate and complete in all
material respects. UBIBV and Buyer shall respectively afford (or procure to be
afforded) to the other or to the other's agents such information and assistance
as may reasonably be required to prepare, submit and agree all relevant Returns.
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(e) (i) To the extent that it does not result in more than nominal
Adverse Consequences to any of them, Buyer shall procure that all Bavaria
Entities shall cause the agreed Returns referred to in Section 6.7(d) and,
subject to Section 6.7(a) above, all such claims, disclaimers, surrenders and
elections as may be directed by UBIBV relating to all such Returns of all
Bavaria Entities for Tax accounting periods ending on or before the Closing Date
to be authorized, signed and returned to UBIBV for submission to the Taxing
Authority as soon as is reasonably practicable. UBIBV and Holdings shall submit
such claims, disclaimers, surrenders and elections to the relevant Bavaria
Entity for such signature sufficiently in advance of the required filing date
for the relevant Bavaria Entity to adequately review such claim, disclaimer,
surrender or election.
(ii) Buyer shall, and shall procure that all Bavaria Entities,
cooperate with UBIBV and Holdings, and their agents, as and to the extent
reasonably requested by UBIBV or Holdings, in connection with UBIBV's or
Holdings' exercise of their rights and responsibilities under this Section 6.7.
Such cooperation shall include retention and (upon UBIBV's or Holdings' request)
the provision of records and information which are reasonably relevant to such
exercise, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. UBIBV and Holdings shall reimburse Buyer and the Bavaria Entities for
any reasonable out of pocket expenditures incurred by them by reason of such
cooperation.
6.8 LEASES. Buyer shall indemnify Holdings and its Affiliates, in the
manner and subject to the limitations set forth in Article VIII, from and
against any and all claims and Adverse Consequences arising from the Leases for
all periods after the Closing Date.
6.9 INDEMNIFYING PARTY In the event that the net worth of UBIBV shall,
at any time during the period for which UBIBV is obligated to indemnify Buyer
pursuant to Section 8.1 and 8.2 hereof, be less than $650,000,000, Unicorn shall
cause one of its Affiliates having a net worth of not less than $650,000,000
execute such agreement(s) as may be reasonably requested by Buyer including
legal opinions or other assurances as to the enforceability of such agreements
to provide for the assignment by UBIBV and the assumption by such Affiliate of
UBIBV's indemnification obligations pursuant to such Section, provided that in
no event shall such indemnification obligations be expanded or increased beyond
the limitations set forth in such Section.
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6.10 SHARE OPTIONS
(a) Definitions
the "SCHEMES" the
Sharesave Plan, the
1994 International Scheme,
the 1994 UK Scheme and the
1994 XXXX and any other
share option schemes adopted
and operated by UBIBV;
the "THE 1994
INTERNATIONAL SCHEME"
the Unapproved 1994
International Executive
Share Option Scheme;
the "1994 XXXX"
the Approved 1994 UK
Executive Share Option
Scheme;
the "SHARESAVE PLAN"
the 1997 Unapproved
United News & Media plc
International Sharesave
Plan;
the "OPTION"
an option over shares
in the issued ordinary share
capital of Unicorn, the
terms of which are as
determined by the applicable
Scheme;
"RELEVANT
EMPLOYEE" a person who
is an employee of any one or
more Bavaria Entities on or
after Closing and who
currently has or may in the
future have any rights under
any of the Schemes, which
expression shall include the
personal representatives of
such individual and any
other person deriving rights
under any such Scheme from
such individual;
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"RETAINED
GROUP" UBIBV and any
subsidiary or subsidiary
undertaking or any holding
company for the time being
of UBIBV, or any subsidiary
or subsidiary undertaking of
such holding company other
than the Bavaria Entities;
"SCHEME RIGHTS"
the right of a
Relevant Employee under the
Schemes to exercise any
Option under the Schemes on
or in consequence of Closing
in favor of such Relevant
Employee.
(b) UBIBV's Obligations
Where Scheme Rights confer upon any Relevant Employee any legal
or contractual right to exercise any outstanding Option under any Scheme and any
Relevant Employee elects to exercise any outstanding Option under any Scheme in
accordance with such legal or contractual right, then UBIBV shall or shall
procure that all relevant shares or securities are issued to the Relevant
Employee in satisfaction of such exercise.
(c) Buyer's Obligations
Buyer shall co-operate with UBIBV to ensure that, following
Closing, it shall, at the request of UBIBV, take such steps as shall be
reasonably necessary or desirable to enable the Retained Group to efficiently
administer the Schemes in an effective and timely manner in relation to the
Relevant Employees (including enabling the Retained Group to utilize the payroll
services of the Bavaria Entities to effect any payment and any consequential
deductions therefrom in respect of income tax, social security or the like
required to be made as a result of UBIBV acquitting its responsibilities under
paragraph 2 above.). In particular, and without prejudice to the generality of
the foregoing, Buyer shall procure that neither they nor any of the Bavaria
Entities grant or purport to grant any rights or entitlements under any Scheme
nor does nor purports to do anything pursuant to any Scheme. For the avoidance
of doubt, as between the Parties, Buyer shall be responsible for any relevant
Taxes occurring upon exercise of Scheme Rights as employer of the Relevant
Employees.
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ARTICLE VII
CONDITIONS TO OBLIGATION TO CLOSE
7.1 CONDITIONS TO OBLIGATION OF BUYER AND XXXX XXXXX. The obligations of
Buyer and Xxxx Xxxxx under this Agreement and the consummation by Buyer and Xxxx
Xxxxx of the transactions contemplated hereby are subject to the satisfaction at
or prior to the Closing of the following conditions, unless waived by Buyer and
Xxxx Xxxxx in writing:
(a) Performance of Obligations of Holdings and UBIBV. Each of
Holdings and UBIBV shall have materially performed all obligations required to
be performed by it under this Agreement, and materially complied with all
covenants for which compliance by it is required under this Agreement, prior to
or at the Closing.
(b) Closing Documentation. Buyer and Xxxx Xxxxx shall have received
the following documents, agreements and instruments from UBIBV and Holdings:
(i) Duly executed Notarial Deeds, stock powers and stock
transfer forms, together with share certificates, if applicable, for the Bavaria
Shares described in Section 2.4(b) hereof in forms mutually agreeable to the
parties;
(ii) Certificates signed by an officer or director of each of
Holdings and UBIBV certifying as to the matters set forth in Section 7.1(a)
above with respect to Holdings and UBIBV;
(iii) An opinion of Xxxxxx, Xxxxxxx & Xxxxxxx, counsel for
Holdings and UBIBV, dated the date of the Closing and addressed to Buyer and
Xxxx Xxxxx, in form and substance reasonably acceptable to Buyer and Xxxx Xxxxx,
together with such opinions of Xxxxx & XxXxxxxx, or other counsel reasonably
acceptable to Buyer and Xxxx Xxxxx, as shall be required;
(iv) [Intentionally Omitted]
(v) [Intentionally Omitted]
(vi) A certified excerpt from the commercial register of the
Lower Court Dusseldorf regarding Holdings not older than 14 days certifying that
the persons acting on behalf as Holding as its managing directors are the
recorded managing directors of Holdings jointly authorized to represent the
company.
(vii) Signed resignation letters of all directors and officers
of the Bavaria Entities requested by Buyer and Xxxx Xxxxx prior to Closing (or
actions of the Shareholders and Board of Directors of Bavaria removing such
persons as directors and officers); and
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(viii) All other instruments and documents required by this
Agreement to be delivered by Holdings or UBIBV to Buyer and Xxxx Xxxxx on or
before the Closing.
(c) Approval of Legal Matters. The form of all instruments,
certificates and documents to be executed and delivered by Holdings or UBIBV to
Buyer and Xxxx Xxxxx pursuant to this Agreement shall be reasonably satisfactory
to Buyer and its counsel, none of whose approval shall be unreasonably withheld
or delayed.
(d) No Litigation. Except with respect to matters relating to
antitrust laws including the HSR Act which, for purposes of this Section 7.1 are
addressed exclusively in Section 7.1(e) below:
(i) No action, suit or other proceeding shall be pending or
threatened before any court, tribunal or governmental authority seeking or
threatening to restrain or prohibit the consummation of the transactions
contemplated by this Agreement or seeking to obtain substantial damages in
respect thereof, or involving a claim that consummation thereof would result in
the violation of any law, decree or regulation of any governmental authority
having appropriate jurisdiction; provided, however, that no such action, suit or
proceeding commenced or threatened by a private person or entity shall
constitute failure of a condition to Buyer's obligations under this Agreement;
and
(ii) No order, decree or ruling of any governmental authority or
court shall have been entered prohibiting, restraining or otherwise preventing
the consummation of the transactions contemplated hereby.
(e) Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting periods
under the HSR Act shall have expired without any indication by the Department of
Justice or the Federal Trade Commission that either of them intends to challenge
the transactions contemplated hereby, provided, however, that nothing in this
Section 7.1(e) shall be construed to constitute a modification of Buyer's
obligations as set forth in Section 5.5 hereof.
(f) Laws. No statute, rule, regulation or order shall have been
adopted or promulgated which materially adversely affects the Business, the
Assets of the Bavaria Entities taken together as a whole.
(g) Financial Capacity. Buyer shall have obtained sufficient funds
to purchase the Bavaria Shares on the terms and conditions contemplated by this
Agreement after using its reasonable commercial efforts to obtain such funds.
7.2 CONDITIONS TO OBLIGATION OF UNICORN, HOLDINGS AND UBIBV. The
obligations of Unicorn, Holdings and UBIBV under this Agreement and the
consummation by Unicorn, Holdings and UBIBV of the transactions contemplated
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hereby are subject to the satisfaction at or prior to the Closing of the
following conditions, unless waived by Unicorn, Holdings and UBIBV in writing:
(a) Performance of Obligations of Buyer and Xxxx Xxxxx. Each of
Buyer and Xxxx Xxxxx shall have performed all obligations required to be
performed by it under this Agreement, and complied with all covenants for which
compliance by it is required under this Agreement, prior to or at the Closing.
(b) Closing Documentation. Holdings and UBIBV shall have received
the following documents, agreements and instruments from Buyer and Xxxx Xxxxx:
(i) Payment of the Purchase Price pursuant to Section 2.2 hereof
and duly executed Notarial Deed for the Bavaria Shares described in Section
2.4(b) hereof, each in forms mutually agreeable to the parties;
(ii) A certificate signed by an officer of each of Buyer and
Xxxx Xxxxx certifying as to the matters set forth in Section 7.2(a) above;
(iii) An opinion of Weil, Gotshal & Xxxxxx, LLP, counsel for
Buyer, dated the date of the Closing and addressed to Holdings and UBIBV, in
form and substance reasonably acceptable to UBIBV;
(iv) Copies of all consents, approvals and notices referred to
in Section 3.2(b) hereof;
(v) A certificate of the Secretary or an Assistant Secretary of
each of Buyer and Xxxx Xxxxx dated the Closing Date certifying (A) that attached
thereto are true, complete and correct copies of resolutions, as in effect on
the date of such certification, duly adopted by the Board of Directors of Buyer
and Xxxx Xxxxx, or a duly authorized committee thereof, approving the
transactions contemplated hereby and authorizing the execution, delivery and
performance by Buyer and Xxxx Xxxxx of this Agreement and the purchase and
acquisition by Xxxx Xxxxx of the Bavaria Shares in accordance herewith, and (B)
as to the incumbency and signatures of the officers of Buyer and Xxxx Xxxxx
executing this Agreement and all instruments or other documents delivered in
connection with this Agreement; and
(vi) All other instruments and documents required by this
Agreement to be delivered by Buyer and Xxxx Xxxxx to UBIBV and Holdings on or
before the Closing.
(c) Approval of Legal Matters. The form of all instruments,
certificates and documents to be executed and delivered by Buyer and Xxxx Xxxxx
to UBIBV and Holdings pursuant to this Agreement shall be reasonably
satisfactory to UBIBV, Holdings and their counsel, none of whose approval shall
be unreasonably withheld or delayed.
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(d) No Litigation
(i) No action, suit or other proceeding shall be pending or
threatened before any court, tribunal or governmental authority seeking or
threatening to restrain or prohibit the consummation of the transactions
contemplated by this Agreement or seeking to obtain substantial damages in
respect thereof, or involving a claim that consummation thereof would result in
the violation of any law, decree or regulation of any governmental authority
having appropriate jurisdiction; provided, however, that no such action, suit or
proceeding commenced or threatened by a private person or entity shall
constitute failure of a condition to Holdings' or UBIBV's obligations under this
Agreement; and
(ii) No order, decree or ruling of any governmental authority or
court shall have been entered prohibiting, restraining or otherwise preventing
the consummation of the transactions contemplated hereby.
(e) Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting periods
under the HSR Act, shall have expired without any indication by the Department
of Justice or the Federal Trade Commission that either of them intends to
challenge the transactions contemplated hereby.
ARTICLE VIII
REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding any
otherwise applicable statute of limitations, all of the representations and
warranties of Unicorn, UBIBV and Holdings contained in Section 3.1 and all of
the representations and warranties of Holdings contained in Sections 4.1 - 4.24
of Annex A hereto, or in any certificate, annex or Schedule to this Agreement or
prepared by UBIBV or Holdings in connection with this Agreement (including the
Disclosure Schedule) shall survive the Closing hereunder and continue in full
force and effect for the period specified below:
(a) for the representations and warranties contained in Sections 4.6
- 4.14 and 4.16-4.24 of Annex A, until the 18 month anniversary of the Closing
Date;
(b) notwithstanding Section 8.1(a) above, for claims in relation to
the lost Licensed Images or model consents with releases (or lack thereof)
within the Knowledge of Seller prior to February 27, 2000 ("Media Claims"),
until the 5 year anniversary of the Closing Date; and
(c) for all other representations, warranties and covenants of the
parties, until the expiration of the applicable statute of limitations,
including extensions thereof.
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Any Party entitled to receive indemnification pursuant to this Article
VIII shall use commercially reasonable efforts to seek recovery (including both
cost of defense and indemnity) under applicable insurance policies with respect
to any Adverse Consequences. In determining the amount payable hereunder there
shall be taken into account the dollar amount of any insurance as other net
proceeds actually received by (or paid for the benefit of) the party claiming
indemnification hereunder with respect to the events giving rise to a claim
hereunder. In the event that a Party (a "Collecting Party") receives payment
under this Article VIII from another Party (a "Paying Party"), and then
subsequently receives insurance proceeds with respect to the matter for which
such Collecting Party received indemnification payment from Paying Party,
Collecting Party shall, within two (2) business days of the receipt of such
insurance proceeds, remit such proceeds to Paying Party up to the amount
previously paid by Paying Party.
8.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER AND XXXX XXXXX.
(a) In the event that any of Unicorn, Holdings or UBIBV breach (or
in the event any third party alleges facts that, if true, would mean that any of
Unicorn, Holdings or UBIBV has breached) any of their representations,
warranties, and covenants contained herein, or in any certificate, annex or
Schedule delivered pursuant hereto (except with respect to Media Claims), and,
if there is an applicable survival period pursuant to Section 8.1 above,
provided that Buyer or Xxxx Xxxxx makes a written claim for indemnification
against UBIBV pursuant to Section 10.6 below within such survival period, then
UBIBV agrees to indemnify Buyer, Xxxx Xxxxx and Bavaria from and against the
entirety of any Adverse Consequences any of the foregoing entities may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach), up to, together with Adverse Consequences under
Section 8.2(c), an aggregate maximum amount equal to one-half of the Purchase
Price; provided, however, that UBIBV shall have no obligation to indemnify
Buyer, Xxxx Xxxxx or Bavaria from and against any Adverse Consequence (treating
as a single Adverse Consequence related Adverse Consequences arising out of a
single fact situation) that does not equal or exceed $25,000 ("De Minimis
Claims"); and provided, further, that UBIBV shall have no obligation to
indemnify Buyer, Xxxx Xxxxx or Bavaria until all such Adverse Consequences shall
exceed $2,000,000 in aggregate amount (taken together with any Adverse
Consequences pursuant to the Stock Purchase Agreement of even date herewith
among Buyer, UBIBV, Unicorn and Getty Communications Limited (the "Vermont
Agreement"), and not including, in either case, any Adverse Consequences that
are De Minimis Claims) in aggregate amount at which time UBIBV shall be liable
to Buyer and Bavaria for all Adverse Consequences from the first $1 of such
Adverse Consequences.
(b) [Intentionally Omitted]
(c) Without duplication of any indemnification payments pursuant to
Section 8.2(a), UBIBV and Holdings agree to indemnify Buyer and Xxxx Xxxxx from
and against (i) the Adverse Consequences of any Taxes payable by any Bavaria
Entity for any Tax accounting period ending prior to January 1, 2000 (or, in the
case of a period that
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begins before December 31, 1999 and ends after such date, the portion thereof
through December 31, 1999), and (ii) one-half of the Adverse Consequences of any
income Taxes payable by any Bavaria Entity for the period beginning January 1,
2000 and ending on the Closing Date (the "Stub Period"), up to, together with
Adverse Consequences under Section 8.2(a), an aggregate maximum amount equal to
one-half of the Purchase Price. Whether or not an income Tax accounting period
ends on the Closing Date, income Taxes for the Stub Period for the purposes of
this Section 8.2(c) shall be determined based upon a closing of the books on the
Closing Date; provided, however that income Taxes for the Stub Period shall
exclude any Tax attributable to any extraordinary income or gain that would not
be recognized but for an action of the Buyer or Xxxx Xxxxx after the Closing
Date (including, without limitation, an election under Code Section 338). With
respect to any Taxes payable for the fiscal year ending December 31, 1999 (or
any portion thereof), UBIBV and Holdings shall be liable under the first
sentence of this Section 8.2(c) only to the extent that such Taxes are, in the
aggregate, in excess of the accrual or reserve for Taxes as of December 31, 1999
in the Bavaria Financial Statements. No claim may be brought under this Section
8.2(c) for any single Tax item (or related series of items) which does not
exceed $10,000. Any claim hereunder must be brought within the time limit
specified in Section 8.1(c).
8.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF UBIBV AND HOLDINGS. In the
event Buyer or Xxxx Xxxxx breaches (or in the event any third party alleges
facts that, if true, would mean Buyer or Xxxx Xxxxx has breached) any of its
representations, warranties, and covenants contained herein, or in any
certificate, annex or Schedule delivered pursuant hereto, and, if there is an
applicable survival period pursuant to Section 8.1 above, provided that UBIBV or
Holdings makes a written claim for indemnification against Buyer and Xxxx Xxxxx
pursuant to Section 10.6 below within such survival period, then Buyer and Xxxx
Xxxxx, jointly and severally, agree to indemnify UBIBV and Holdings from and
against any Adverse Consequences any of the foregoing entities may suffer
(including any Adverse Consequences UBIBV or Holdings may suffer after the end
of any applicable survival period) resulting from, arising out of, relating to,
in the nature of, or caused by the breach (or the alleged breach), up to an
aggregate maximum amount equal to one-half of the Purchase Price, provided,
however, that Buyer and Xxxx Xxxxx shall not have any obligation to indemnify
UBIBV or Holdings from and against any Adverse Consequence (treating as a single
Adverse Consequence related Adverse Consequences arising out of a single fact
situation) that does not equal or exceed $25,000 ("De Minimis Claims"); and
provided, further, that Buyer and Xxxx Xxxxx shall not have any obligation to
indemnify UBIBV or Holdings until all such Adverse Consequences shall exceed
$2,000,000 in aggregate amount (taken together with any Adverse Consequences
pursuant to the Vermont Agreement, and not including, in either case, any
Adverse Consequences that are De Minimis Claims) at which time Buyer and Xxxx
Xxxxx shall, jointly and severally, be liable to UBIBV and Holdings for all
Adverse Consequences from the first $1 of such Adverse Consequences.
8.4 MATTERS INVOLVING THIRD PARTIES.
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(a) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Article VIII, then the Indemnified Party shall promptly
notify the Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party thereby is prejudiced.
(b) The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within 15 days after the Indemnified
Party has given notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (ii) the
Indemnifying Party provides the Indemnified Party with evidence acceptable to
the Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice adverse to the continuing business interests of
the Indemnified Party, and (v) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8.4(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (ii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 8.4(b) above is or
becomes unsatisfied, however, (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (iii) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting
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from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this Article VIII.
(e) The Indemnified Party shall (and, in the case of Buyer and Xxxx
Xxxxx, shall cause the Bavaria Entities to) cooperate fully, as and to the
extent reasonably requested by the other Party, in connection with any Third
Party Claim. Such cooperation shall include the retention and (upon the other
Party's request) the provision of records and information which are reasonably
relevant to any such Third Party Claim and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Parties agree (i) to retain, and (in the
case of Buyer and Xxxx Xxxxx) to cause the Bavaria Entities to retain, all books
and records with respect to Tax matters pertinent to the Bavaria Entities
relating to any taxable period beginning before the Closing Date until six
months after the expiration of the statute of limitations (and, to the extent
notified by Buyer or Xxxx Xxxxx or UBIBV or Holdings, any extensions thereof) of
the respective taxable periods, and to abide by all record retention obligations
imposed by law or pursuant to agreements entered into with any Taxing Authority,
and (ii) to give the other Party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other Party so requests, Buyer or Xxxx Xxxxx or UBIBV or Holdings, as the case
may be, shall allow the other Party to take possession of such books and
records.
8.5 SOLE REMEDY. Each Party acknowledges and agrees that the foregoing
indemnification provisions of this Article VIII (including the limitations set
forth herein) are such Party's sole and exclusive remedy against the other
Parties and their Affiliates for any claim with respect to the transactions
contemplated hereby or otherwise relating to any Bavaria Entity, or the Assets
or the Business, and each Party hereby waives and releases any statutory,
equitable or common law remedies which might otherwise be available against the
other Parties and their Affiliates. All indemnification payments under this
Article VIII shall be deemed adjustments to the Purchase Price.
8.6 UNLIMITED CLAIMS.
(a) The proviso contained in Section 8.2 shall not apply to UBIBV's
liability in respect of any breach of the representations and warranties
contained in Section 3.1 or in Sections 4.1, 4.2, 4.3, 4.4 or 4.5 or the final
sentence of Section 4.6 of Annex A, with respect to which such Party's liability
shall not exceed the Purchase Price hereunder.
(b) The proviso contained in Section 8.3 shall not apply to Buyer's
liability in respect of any breach of the representations and warranties
contained in Section 3.2 with respect to which such Party's liability shall not
exceed the Purchase Price hereunder.
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ARTICLE IX
TERMINATION
9.1 TERMINATION OF AGREEMENT. This Agreement may be terminated by the
Parties as provided below:
(a) The Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) Either of Buyer or Xxxx Xxxxx may terminate this Agreement by
giving written notice to each of UBIBV, Holdings and Unicorn at any time prior
to the Closing if the Closing shall not have occurred on or before March 26,
2000, by reason of the failure of any condition precedent under Section 7.1(a) -
(d) and 7.1(f) or (g) hereof (unless the failure results primarily from Buyer or
Xxxx Xxxxx themselves breaching any representation, warranty, or covenant
contained in this Agreement, including, without limitation, Buyer's covenant set
forth in Section 5.5 hereof, or unless the failure otherwise relates to the HSR
Act);
(c) Any of UBIBV, Holdings or Unicorn may terminate this Agreement
by giving written notice to Buyer and Xxxx Xxxxx at any time prior to the
Closing if the Closing shall not have occurred on or before March 26, 2000, by
reason of the failure of any condition precedent under Section 7.2 hereof
(unless the failure results primarily from any of the foregoing themselves
breaching any representation, warranty, or covenant contained in this
Agreement).
9.2 EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 9.1 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
or their respective Affiliates, directors, officers or employees, except for the
obligations of the Parties hereto contained in this Section 9.2, Section 9.3 (if
applicable) and in all other provisions which are stated to survive any
termination of this Agreement, including, without limitation, Sections 5.2, 5.3,
10.6, 10.7, 10.8, 10.9, 10.12, 10.16 and 10.20.
9.3 LIQUIDATED DAMAGES. Notwithstanding any other provision hereof, the
Parties hereby agree that, in the event that the transactions contemplated
hereby are not consummated by March 26, 2000 Buyer shall pay to Holdings, as
liquidated damages and a break-up fee, and not as a penalty, the aggregate
amount of up to $2,000,000, except in the event that the transactions
contemplated are not consummated as a result of the failure of the conditions to
Closing set forth in Sections 7.1(a),(b),(c) (unless Buyer unreasonably
withholds or delays with respect to Section 7.1(c)) or (d) (with respect to
Section 7.1(d) to the extent such litigation does not arise out of the action of
Buyer.)
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ARTICLE X
MISCELLANEOUS
10.1 ENTIRE AGREEMENT. This Agreement (including the Annexes, Exhibits,
Schedules and documents attached hereto or referred to herein) constitutes the
entire agreement among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof, except for the
Confidentiality Agreement which will remain in full force and effect for the
term provided for therein.
10.2 NO THIRD-PARTY BENEFICIARIES.
(a) Except as otherwise expressly provided for in this Agreement,
nothing in this Agreement, express or implied, is intended or shall be construed
to confer upon or give to any employee of UBIBV, Holdings, Buyer, Xxxx Xxxxx,
Bavaria or any Subsidiary of the foregoing, or any other Person, other than the
Parties hereto (and their successors and permitted assigns), any rights,
remedies or other benefits under or by reason of this Agreement.
(b) The Parties hereto agree and acknowledge that after the Closing
Date: Bavaria is an intended third party beneficiary under this Agreement and
are independently entitled to avail itself of all the rights and remedies of
Buyer hereunder and all benefits related thereto.
10.3 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the other Parties, provided, however, that Buyer may assign, without
the approval of the other parties, all or any portion of its rights hereunder to
any entity directly or indirectly owned wholly by Buyer, in which extent Buyer
shall, notwithstanding such assignment, remain wholly and solely liable for the
obligations, representations, warranties and covenants of Buyer hereunder and
under any certificate, schedule, annex or other agreement delivered pursuant
hereto.
10.4 COUNTERPARTS. This Agreement may be executed by exchanging executed
copies or facsimile signatures and in any number of counterparts, and by any
Party on separate counterparts, each of which as so executed and delivered shall
be deemed an original, but all of which together shall constitute one and the
same instrument, and it shall not be necessary in making proof of this Agreement
as to any Party hereto to produce or account for more than one such counterpart
executed and delivered by such Party.
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10.5 HEADINGS. The Article and Section headings, and the table of
contents, contained in this Agreement are inserted for convenience only and
shall not affect in any way the meaning or interpretation of this Agreement.
10.6 NOTICES. All notices, certificates, requests, demands, claims, and
other communications hereunder shall be given in writing and shall be delivered
personally (including by personal courier or delivery service) or sent by
facsimile, telex or telegram or by the registered or certified mail (return
receipt requested), postage prepaid, to the Parties at the following address (or
at such other addresses as the shall be specified by like notice):
IF TO UNICORN,
UBIBV OR HOLDINGS: COPY TO:
c/o United News & Media plc Xxxxxx, Xxxxxxx & Xxxxxxx
Xxxxxxx Xxxxx Xxx Xxxx Xxxxxx
000 Xxxxxxxxxxx Xxxx Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx XX0 0XX, Xxxxxxx
Fax No.: 000-00-000-000-0000 Fax No.: 000-000-0000
Attention: Company Secretary Attention: Xxxxx X. Xxxxxx
IF TO BUYER OR XXXX XXXXX: COPY TO:
Getty Images Inc. Weil, Gotshal & Xxxxxx, LLP
000 Xxxxx 00xx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxx 0000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxxxxxxx 00000
Fax No.: 000-000-0000 Fax No.: 000-000-0000
Attention: Xxxxxxx Page Attention: Xxxxxxx Xxxxx
Getty Images Inc.
c/o PhotoDisc Inc.
000 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: 000-000-0000
Attention: General Counsel
Any notice given personally or by mail or telegram shall be effective when
received. Any notice given by telex or facsimile shall be effective when the
appropriate telex or facsimile answerback is received.
10.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies
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(without giving effect to any choice or conflict of law provision or rule,
whether of the State of New York or any other jurisdiction, that would cause the
application of the laws of any jurisdiction other than the State of New York).
10.8 RETURN OF INFORMATION. If for any reason whatsoever the sale and
purchase of the Bavaria Shares pursuant to this Agreement is not consummated,
Buyer and Xxxx Xxxxx shall promptly return to UBIBV and Holdings all books,
records and documents of UBIBV, Holdings and the Bavaria Entities (including all
copies, if any, thereof) furnished by UBIBV or Holdings or any of their
respective Affiliates, agents, employees, or representatives, and shall not use
or disclose the information contained in such books, records or documents for
any purpose or make such information available to any other entity or person,
except that one copy of all such information may be retained in the files of
Buyer's legal department.
10.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Buyer, Xxxx Xxxxx, Unicorn, Holdings and UBIBV. Any Party hereto may, by written
notice to the other Parties, waive any provision of this Agreement. No waiver by
any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
10.10 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof. If any provision
of this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (i) a suitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision,
and (ii) the remainder of this Agreement and the application of such provision
to other persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
10.11 EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, each of the Parties will bear its own costs and expenses
(including, but not limited to, all compensation and expenses of counsel,
financial advisors, consultants, actuaries and independent accountants) incurred
in connection with this Agreement and the transactions contemplated hereby.
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10.12 CONSTRUCTION. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
10.13 INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof. References herein to "Section 4".x shall refer
to Section 4.x of Annex A.
10.14 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches, or threatened breaches, of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 10.15 below), in addition to any other remedy to which they may
be entitled, at law or in equity.
10.15 SUBMISSION TO JURISDICTION. IF ANY PARTY SHALL HAVE THE RIGHT TO
SEEK RECOURSE TO A COURT WITH RESPECT TO ANY DISPUTE ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS
AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, THEN ANY ACTION
OR PROCEEDING IN RESPECT OF ANY SUCH DISPUTE SHALL BE BROUGHT EXCLUSIVELY IN THE
SUPREME COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW YORK ( THE "CHOSEN
COURTS") AND (I) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN
COURTS FOR SUCH PURPOSES, (II) WAIVES ANY OBJECTION TO LAYING VENUE IN ANY SUCH
ACTION OR PROCEEDING IN THE CHOSEN COURTS, (III) WAIVES ANY OBJECTION THAT THE
CHOSEN COURTS ARE AN INCONVENIENT FORUM OR DO NOT HAVE JURISDICTION OVER ANY
PARTY HERETO AND (IV) AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH
ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH
SECTION 10.6 OF THIS AGREEMENT. EACH
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PARTY AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SO BROUGHT SHALL
BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW OR AT EQUITY. EACH PARTY ALSO AGREES NOT TO BRING ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY OTHER COURT. EACH
OF BUYER AND XXXX XXXXX IRREVOCABLY DESIGNATES GETTY IMAGES INC.'S NEW YORK
OFFICE AS ITS AGENT AND ATTORNEY-IN-FACT FOR THE ACCEPTANCE OF SERVICE OF
PROCESS ON ITS BEHALF IN ANY SUCH CLAIM OR PROCEEDING AND TAKING ALL SUCH ACTS
AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO CONFER JURISDICTION OVER IT UPON
THE CHOSEN COURTS AND EACH OF BUYER AND XXXX XXXXX STIPULATES THAT SUCH CONSENT
AND APPOINTMENT IS IRREVOCABLE AND COUPLED WITH AN INTEREST. EACH OF UBIBV,
HOLDINGS AND UNICORN IRREVOCABLY DESIGNATES C.T. CORPORATION AS ITS AGENT AND
ATTORNEY-IN-FACT FOR THE ACCEPTANCE OF SERVICE OF PROCESS AND MAKING AN
APPEARANCE ON ITS BEHALF IN ANY SUCH CLAIM OR PROCEEDING AND TAKING ALL SUCH
ACTS AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO CONFER JURISDICTION OVER IT
UPON THE CHOSEN COURTS AND EACH OF UBIBV, HOLDINGS AND UNICORN STIPULATES THAT
SUCH CONSENT AND APPOINTMENT IS IRREVOCABLE AND COUPLED WITH AN INTEREST.
10.16 FULFILLMENT OF OBLIGATIONS. Any obligation of any Party to any
other Party under this Agreement, which obligation is performed, satisfied or
fulfilled by an Affiliate of such Party, shall be deemed to have been performed,
satisfied or fulfilled by such Party.
10.17 SCHEDULES. The inclusion of any matter in any schedule to this
Agreement shall be deemed to be an inclusion for all purposes of this Agreement,
including each representation and warranty to which it may relate, but inclusion
thereon shall expressly not be deemed to constitute admission by either Party,
or otherwise imply, that any such matter is material or create a measure for
materiality for the purposes of this Agreement.
10.18 DEFINITION OF "ORDINARY COURSE". For purposes of this Agreement,
the term "ordinary course" as it relates to the Business prior to the Closing
means in a manner substantially the same as that normally employed by UBIBV in
the ordinary course with respect to businesses it holds with a view towards
operating and maintaining such businesses rather than a view towards the sale of
such businesses to a third party.
10.19 ATTORNEY'S FEES. In any proceeding brought by any Party hereto to
enforce this Agreement, the prevailing Party shall be entitled to reasonable
attorneys' fees incurred by the prevailing Party in connection therewith, plus
court costs and experts' fees.
**************
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[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, UBIBV, Holdings, Unicorn, Xxxx Xxxxx and Buyer have
each executed or caused this Agreement to be executed by their duly authorized
officers, as the case may be, each as of the date first above written.
GETTY IMAGES INC.
By: ________________________________
Name:
Title:
XXXX XXXXX ASSOCIATES GMBH
By: ________________________________
Name:
Title:
UNITED BUSINESS INFORMATION B.V.
By:_________________________________
Name:
Title:
LUDGATE HOLDINGS GMBH
By:_________________________________
Name:
Title:
UNITED NEWS & MEDIA PLC
By:_________________________________
Name:
Title:
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ANNEX A
4.1 INTEREST IN RELATED ENTITIES. Except as set forth in Section 4.1 of
the Disclosure Schedule, neither UBIBV, Holdings nor any Affiliate of UBIBV or
Holdings (i) has any direct or indirect interest in any person or entity which
is a lessor of assets or properties to, material supplier of, or provider of
services to any Bavaria Entity, (ii) has a direct or indirect interest in or is
a party to any contract or agreement to which any Bavaria Entity is a party, or
(iii) owns directly or, to the Knowledge of Seller, indirectly, any tangible or
intangible property which any Bavaria Entity uses in the conduct of the
Business, or (iv) has any outstanding indebtedness to any Bavaria Entity. For
purposes of this Section, any investment by UBIBV, Holdings or any Affiliate of
UBIBV or Holdings in any company whose stock is listed on a national securities
exchange or actively traded in the over-the-counter market, which investment
represents no more than 5% of the outstanding voting power of such company,
shall be deemed not to constitute a direct or indirect interest in such company.
4.2 ORGANIZATION; QUALIFICATION; POWER. Bavaria is a corporation duly
organized and validly existing in good standing under the laws of Germany. Each
of the Subsidiaries of Bavaria is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize such concept) under the
laws of its jurisdiction of domicile. The Bavaria Entities have all requisite
corporate power and authority to own, lease and operate the Assets and to carry
on the Business as it is now being conducted, except to the extent any failure
to be so empowered or authorized does not have a Material Adverse Effect. Prior
to the Closing, UBIBV and Holdings shall have delivered to Buyer and Xxxx Xxxxx
true, complete and correct copies of the Articles of Association or other
organizational document (including all amendments thereto) and the By-Laws, as
currently in effect, of each of the Bavaria Entities. Each of the Bavaria
Entities is duly qualified or licensed and in good standing (with respect to
jurisdictions that recognize such a concept) to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary. The
information contained in the Excerpt from the Commercial Register at the Lower
Court of Dusseldorf under number HRB 37832 dated __________, 2000 in regard to
Bavaria is true, correct and, with regard to the information which has to be
registered, complete.
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4.3 CAPITALIZATION. All of the Bavaria Shares are duly authorized,
validly issued, fully paid and non-assessable. No depository certificates of
shares in the share capital of Bavaria have been issued. Section 4.3 of the
Disclosure Schedule sets forth a list of all of the Bavaria Entities, the number
of shares of each such entities' authorized capital stock and the number and
class of shares thereof duly issued and outstanding or, if the entity is a
limited partnership, the partnership's capital and the capital contributions
including their respective amounts. Each outstanding share of capital stock of
each of the Bavaria Entities is duly authorized, validly issued fully paid and
non-assessable. The capital contributions of Bavaria Entities being limited
partnerships have been duly taken over, fully paid and are non-assessable.
Bavaria owns directly or indirectly all of the outstanding shares of capital
stock or all of the capital contributions of the partnership capital of each
Bavaria Entity (other than Bavaria) free and clear of all Encumbrances. There
are no pre-emptive rights, whether at law or otherwise, to purchase any of the
securities of Bavaria and there are no outstanding options, warrants,
subscriptions, agreements, plans or other commitments pursuant to which any
Bavaria Entity is or may become obligated to sell or issue any security.
4.4 INVESTMENTS. Except as set forth in Section 4.4 of the Disclosure
Schedule, as of the Closing Date, no Bavaria Entity owns or maintains, directly
or indirectly, any capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust, joint venture or
other entity.
4.5 NO VIOLATIONS. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the performance by
UBIBV and Holdings of their respective obligations hereunder and under the
agreements to be executed and delivered pursuant hereto, do not and will not
conflict with or violate any of the terms of the Articles of Association,
By-Laws or other organizational documents of UBIBV, Holdings or any Bavaria
Entity.
4.6 TITLE TO ASSETS; ENCUMBRANCES; DEBT. The Bavaria Entities own, lease
or have the legal right to use all of the material Assets, including, without
limitation, real and personal property, presently used in the conduct of the
Business of the Bavaria Entities, or which is otherwise owned, leased or used by
the Bavaria Entities and, with respect to contract rights, enjoys the right to
the benefits of all material Contracts. The Bavaria Entities have good and
marketable title to the Assets (except with respect to the Intellectual Property
included in such Assets, with respect to which, to the Knowledge of Seller, the
Bavaria Entities have good and marketable title), free and clear of all
Encumbrances, except those specified in Section 4.6 of the Disclosure Schedule,
liens for taxes not yet due and payable, and Encumbrances that do not in the
aggregate have a Material Adverse Effect on the value or use by the Bavaria
Entities of the Assets and the Intellectual Property, as currently used. At the
Closing, and following repayment of all Intercompany Debt, the Bavaria Entities
shall be free of all debt of whatever kind or nature, except for debts between
the Bavaria Entities, accounts payable and other liabilities arising in the
ordinary course of business.
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4.7 POSSESSION. Except as set forth in Section 4.7 of the Disclosure
Schedule, no other Person has a right of possession or, to the Knowledge of
Seller, claims possession of any material part of the Assets, except for the
rights of lessors over (a) the leased Personal Property identified in Section
4.8 of the Disclosure Schedule and (b) the leased Real Property identified in
Section 4.9 of the Disclosure Schedule.
4.8 PERSONAL PROPERTY.
(a) Set forth in Section 4.8(a) of the Disclosure Schedule is a list
of all material machinery and equipment, apparatus, motor vehicles, furniture,
furnishings and fixtures owned or leased by the Bavaria Entities (the "Personal
Property").
(b) Each lease of Personal Property is valid and in full force and
effect, and none of the Bavaria Entities is in default on any of their material
obligations under such leases and there is no event or condition that with the
giving of notice or the passage of time, or both, would create such a default
other than defaults that in the aggregate would not result in a Material Adverse
Effect. To the Knowledge of Seller, (i) no lessor under any of such leases is in
default of any of its obligations thereunder and (ii) there is no event or
condition that with the giving of notice or the passage of time, or both, would
create a default by any such lessor under any such lease. The Personal Property
has been maintained in good operating condition (in each case taking into
account the age of such Personal Property) a manner consistent with the ordinary
course of the Business.
4.9 REAL PROPERTY.
(a) No Owned Real Property. The Bavaria Entities do not own any real
property.
(b) Leased Real Property. Section 4.9 of the Disclosure Schedule
sets forth all leases, subleases and other agreements under which any Bavaria
Entity uses or occupies or has the legal right to use of occupy, now or in the
future, any real property (the "Leases").
(c) Compliance with Leases. Each of the Leases and each lease of
real property identified in Section 4.22 of the Disclosure Schedule is valid and
in full force and effect, and the Bavaria Entities are not in default on any of
their obligations under such Leases and, to the Knowledge of Seller, there is no
event or condition that the giving of notice or the passage of time, or both,
would create such a default other than, in each case, defaults that in the
aggregate would not have a Material Adverse Effect. To the Knowledge of Seller,
(i) no lessor under any of such leases is in default of any of its obligations
thereunder and (ii) there is no event or condition that with the giving of
notice or the passage of time, or both, would create a default by any such
lessor under any such lease.
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4.10 INTELLECTUAL PROPERTY.
(a) Section 4.10 (a) of the Disclosure Schedule sets forth a true
and complete list of all (i) patents and patent applications, trademark and
service xxxx registrations, trademark and service xxxx applications and, to the
knowledge of UBIBV, all material common law trademarks and service marks,
registered copyrights and copyright applications, and Internet domain names, in
each case owned by a Bavaria Entity and material to the business of the Bavaria
Entities ("Listed Intellectual Property"), (ii) Software (as defined herein),
and (iii) licenses, sublicenses, and other agreements pertaining to Intellectual
Property, Software or Images (as defined herein) to which a Bavaria Entity is a
party, including agreements with major Internet service providers and major
Internet portals, in each case that are material to the business of the Bavaria
Entities ("Licensed Intellectual Property"). For purposes hereof, "Intellectual
Property" means any and all of the following, but excluding Images: (i) United
States, international, and foreign patents, patent applications and statutory
invention registrations, (ii) trademarks, service marks, intent to use
registrations, trade names, trade dress, slogans, logos, and Internet domain
names, including registrations and applications for registration thereof, (iii)
copyrights, including registrations and applications for registration thereof
and (iv) confidential and proprietary information. For purposes hereof, "Owned
Intellectual Property" means Listed Intellectual Property and any copyright,
confidential proprietary information including trade secrets and knowhow, owned
by a Bavaria Entity and, to the knowledge of UBIBV, material to the business of
the Bavaria Entity, "Image" means a reproduction of any artwork, photograph,
illustration, font, video, clip art, map art, film, animation or any other type
of image. For purposes hereof, "Software" means all material computer software
developed by or on behalf of a Bavaria Entity, or used by a Bavaria Entity,
including all material computer software and databases operated or used by
Bavaria on their web sites or used by Bavaria in connection with processing
customer orders, storing customer information, storing Image related vendor
information, or storing and archiving Images. For purposes hereof, "Approved
Images" means Images used or held for use by the Bavaria Entities in connection
with their business for which a Bavaria Entity has the right to grant licenses
or sublicenses in writing to third parties. For purposes hereof, "Unapproved
Images" means Images used or held for use by the Bavaria Entities in connection
with their business which are not Approved Images (the Approved Images and
Unapproved Images collectively being "Licensed Images").
(b) To the Knowledge of Seller, the use of the Owned Intellectual
Property, Software, Licensed Images, and Licensed Intellectual Property by the
Bavaria Entities in the ordinary course of business does not infringe upon or
misappropriate the valid Intellectual Property rights of any third party. Except
as set forth in section 4.10(b) of the Disclosure Schedule, no claim has been
received that the use of the Owned Intellectual property, Software, Licensed
Images, or Licensed Intellectual Property in the ordinary course of business
does or may infringe upon or misappropriate the Intellectual Property rights,
right of privacy or right of publicity of any third party.
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(c) The Bavaria Entities are the owner of the entire and
unencumbered right, title and interest in and to each item of Owned Intellectual
Property, and the Bavaria Entities are entitled to use the Owned Intellectual
Property in the ordinary day-to-day conduct of business.
(d) The Owned Intellectual Property and the Licensed Intellectual
Property include all of the material Intellectual Property and Software used in
the ordinary day-to-day conduct of the business of the Bavaria Entities, and
there are no other items of Intellectual Property or Software that are material
to such ordinary day-to-day conduct of such business. Except as set forth in
Section 4.10(d) of the Disclosure Schedule, to the knowledge of UBIBV, the Owned
Intellectual Property and Licensed Intellectual Property, is not subject to any
claim or challenge in relation to subsistence, validity or enforceability and
has not been adjudged invalid or unenforceable in whole or part and, to the
actual knowledge of UBIBV, the Listed Intellectual Property is subsisting, valid
and enforceable.
(e) Except as set forth in Section 4.10(e) of the Disclosure
Schedule, no claims have been made, asserted, are pending, or, to the Knowledge
of Seller, threatened against a Bavaria Entity, and no international agent
licensee of the Owned Intellectual Property or end user of the Owned or Licensed
Intellectual Property has informed UBIBV that any claims have been made,
asserted, are pending or threatened against a Bavaria Entity, (i) based upon or
challenging or seeking to deny or restrict the use, license, sublicense,
distribution, display, copying, performance, marketing or creation of derivative
works by a Bavaria Entity of any of the Owned Intellectual Property or Licensed
Intellectual property, (ii) alleging that any services provided by, processes
used by, licenses by, sublicenses by, distribution by, display by, copying by,
performances by, marketing by or creation of derivative works by or products
manufactured or sold by a Bavaria Entity infringe upon or misappropriate any
Intellectual Property right, right of privacy or right of publicity of any third
party, or (iii) alleging that any Intellectual Property licensed under the
Licensed Intellectual property infringes upon any Intellectual Property right of
any third party or is being licensed or sublicensed in conflict with the terms
of any license or other agreement and to the Knowledge of Seller no such claims
have been made, asserted, are pending, or threatened against any third party
licensor, any licensee, or end user of the Owned Intellectual Property.
(f) Except as set forth in Section 4.10(f) of the Disclosure
Schedule, to the Knowledge of Seller no person is engaging in any activity that
infringes upon the Owned Intellectual Property or any Intellectual Property
Licensed to the Bavaria Entities under the Licensed Intellectual Property. No
Bavaria Entity has granted any license or other right to any third party with
respect to the Owned Intellectual Property or Licensed Intellectual Property on
a free or `pro xxxx' basis without the consent of or a licence from the owner of
such Intellectual Property. The consummation of the transactions contemplated by
this Agreement will not result in the termination or material impairment of any
of the Owned Intellectual Property.
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(g) UBIBV and Holdings have delivered or made available to the Buyer
correct and complete copies of all the material licenses and sublicenses of the
Licensed Intellectual Property (excluding for such purposes all Images included
therein) including all amendments thereto, and all current standard forms of all
model and property releases which are in the custody, or under the control, of
UBIBV, Holdings and the Bavaria Entities. With respect to each such material
license and sublicense:
(i) such license or sublicense is valid and binding and in full
force and effect with respect to the Bavaria Entities and, to the
knowledge of UBIBV, with respect to the relevant counterparty and
represents the entire agreement between the respective licensor and
licensee with respect to the subject matter of such license or
sublicense;
(ii) such license or sublicense will not cease to be valid and
binding and in full force and effect on terms identical to those
currently in effect as a result of the consummation of the transaction
contemplated by this Agreement, nor will the consummation of the
transactions contemplated by this Agreement constitute a breach or
default under such license or sublicense or otherwise give the licensor
or sublicensor other than a Bavaria Entity a right to terminate such
license or sublicense;
(iii) Except as set forth in Section 4.10 of the Disclosure
Schedule, (A) no Bavaria Entity has received any notice of termination
or cancellation under such license or sublicense, (B) no Bavaria Entity
has received any notice of a breach or default under such license or
sublicense, which breach has not been cured, and (C) to the Knowledge of
Seller no Bavaria Entity has granted to any other third party any
rights, adverse or otherwise, under such license or sublicense that
would constitute a breach of such license or sublicense; and
(iv) no Bavaria Entity, nor, to the Knowledge of Seller, any
other party to such license or sublicense is in breach or default in any
material respect, and, to the Knowledge of Seller, no event has occurred
that, with notice or lapse of time would constitute such a breach or
default or permit termination, modification or acceleration under such
license or sublicense.
(h) To the Knowledge of Seller, the Software is as of the Closing
Date free of all viruses, worms, trojan horses and other material known
contaminants, and does not contain any bugs, errors, or problems in each case
which is of a material nature that disrupts its operation or have an adverse
impact on the operation of other software programs or operating systems. The
Bavaria Entities do not import or export from the United States any Software. No
rights in the Software have been transferred to any third party except to the
customers of a Bavaria Entity to whom a Bavaria Entity licensed such Software in
the ordinary course of business.
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(i) The Bavaria Entities have the right to use all software
development tools, library functions, compilers, and other third party software
that is material to the business of the Bavaria Entities, or that is required to
operate or modify the Software in a manner necessary for the ongoing operation
of the business. The Software which the Bavaria Entities purport to own was
either developed (i) by employees of the Bavaria Entities within the scope of
their employment; (ii) by independent contractors who have assigned their rights
to the Bavaria Entities pursuant to enforceable written agreements; or (iii) has
otherwise been rightfully assigned. The source code for such Software is
maintained on the premises of the Bavaria Entities and can be compiled from the
associated source code without undue burden. The Bavaria Entities have copies of
all material documentation which exists relating to use, maintenance and
operation of such Software used in the conduct of the Business.
(j) The Bavaria Entities have taken reasonable steps in accordance
with normal industry practice to maintain the confidentiality of their trade
secrets and other confidential Intellectual Property. To the Knowledge of
Seller: (i) there has been no misappropriation of any material trade secrets or
other material confidential Intellectual Property of any Bavaria Entity by any
person, (ii) no employee, independent contractor or agent of any Bavaria Entity
has misappropriated any material trade secrets of any other person in the course
of such performance as an employee, independent contractor or agent and (iii) no
Employee, independent contractor or agent of any Bavaria Entity is in material
default or breach of any term of any employment agreement, non-disclosure
agreement, assignment of proprietary rights agreement or similar agreement or
contract relating in any way to the protection, ownership, development, use or
transfer of Owned or Licensed Intellectual Property.
(k) To the Knowledge of Seller, the Internal MIS Systems are Euro
Compliant. For purposes hereof, "Internal MIS Systems" means any computer
software and systems (including hardware, firmware, operating system software,
utilities and applications software) used in the ordinary course of the Business
that process financial information and that are material to the operation of the
Business, including, where applicable, payroll, accounting, billing/receivables,
purchasing payables, inventory, asset tracking, customer service, and human
resources. For purposes hereof, "Euro Compliant" means that the Internal MIS
Systems will record, store, process and present currency denominated in Euros,
in the same manner, and with the same functionality, as the Internal MIS Systems
record, store, process and present currencies denominated in U.S. Dollars and
major European currencies.
(l) The Bavaria Entities have obtained the necessary permissions
from the appropriate parties for links on its web sites to third party web sites
and to use third party marks in association with those links.
(m) To the Knowledge of the UBIBV, the Bavaria Entities have
obtained all necessary releases and permissions in writing for the use of any
artists' name, biography, likeness, and Image used in marketing and advertising
materials distributed by
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the Bavaria Entities. Except as set forth in Section 4.10(m) of the Disclosure
Schedule, the Bavaria Entities' registered trademarks and service marks as
listed at Section 4.10(a) of the Disclosure Schedule have been duly registered
with, filed in or issued by, as the case may be, the United States Patent and
Tradesman Office or such other domestic or foreign office of appropriate
jurisdiction, and such registrations, filings, issuances and other actions
remain in full force and effect, are current and unexpired.
(n) Except for public domain imagery as set forth in Section 4.10(n)
of the Disclosure Schedule, the Bavaria Entities validly own or license all
Images used or held for use by a Bavaria Entity which are material to the
operation of the business of any Bavaria Entity as currently conducted. With
respect to each Image owned by a Bavaria Entity ("Owned Images"), the Bavaria
Entity, as applicable, has the right to display, reproduce, distribute, sell,
market, perform, advertise, bundle with other derivative works, create
derivative works, license and sublicense the use of such Image to the extent
required for the continued day-to-day operation of the business in a manner
consistent with past practices. The Owned Images and Licensed Images include all
of the Images used or held for use by the Bavaria Entities which are material to
the day-to-day operation of the business as currently conducted. With respect to
the public domain Images offered by the Bavaria Entities, each Image, to the
Knowledge of Seller, does not require a license or the payment of a fee for the
Bavaria Entities' use in a manner consistent with past practice. Without
prejudice to the generality of the foregoing, nothing in this Section shall be
deemed to be or construed as a representation or warranty with respect to the
Licensor's ownership or license of Images.
(o) To the Knowledge of Seller, (a) no Bavaria Entity has granted
any license, sublicense or other right to any other person with respect to any
Unapproved Images (b) no Bavaria Entity has granted any license, sublicense or
other right to any other person with respect to any Approved Image that would
constitute a breach of any agreement or license pertaining to such Approved
Image, and (c) except as disclosed at Section 4.10 of the Disclosure Schedule no
Bavaria Entity has granted any license, sublicense or other right to any other
person with respect to any Approved Image for which such Bavaria Entity has no
model or property release where such licence, sub-licence or other right would
constitute a breach of a third party's rights without such model or property
release.
(p) To the Knowledge of Seller, (a) the display, sale, marketing,
distribution, bundling with other works, creation of derivative works, copying,
marketing, performance and advertising of the Licensed Images, and the licensing
and sublicensing of Approved Images as done, authorized or agreed to by the
Bavaria Entities does not infringe upon the Intellectual Property right, right
of publicity, or right of privacy of any third party, and (b) the display, sale
marketing, performance, distribution, bundling with other works, creation of
derivative works, copying and advertising of the Licensed Images, and the
licensing and sublicensing of Approved Images, as done, authorized or agreed to
by the Bavaria Entities does not constitute a breach of any agreement or license
to which a Bavaria Entity is a party.
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(q) Except as set forth in Section 4.10(q) of the Disclosure
Schedule, no claims have been made, asserted, are pending, or to the Knowledge
of Seller threatened, against any Bavaria Entity, and no international agent
licensee of the Licensed Images or end user of the Licensed Images has informed
UBIBV that any claims have been made, asserted, are pending or threatened
against a Bavaria Entity, (i) based upon or challenging or seeking to deny or
restrict the display, sale, marketing, performance, distribution, bundling with
other works, creation of derivative works, copying, advertising, licensing or
sublicensing by any Bavaria Entity of any of the Licensed Images, (ii) alleging
that the sale, reproduction, distribution, bundling with other derivative works,
creation of derivative works, copying, advertising, licensing or sublicensing of
the Licensed Images by any Bavaria Entity or in accordance with the terms
granted by any Bavaria Entity does or may infringe upon the Intellectual
Property rights, right of publicity, right of privacy of any third party, (iii)
claiming in respect of loss or damage to Licensed Images, (iv) claiming in
respect of model or property releases (or lack thereof) in respect of the
Licensed Images, (v) challenging the ownership of the Owned Images or the
Bavaria Entities' rights to the Licensed Images, and to the Knowledge of Seller,
no such claims have been made, asserted, are pending, or threatened against any
third party licensor, any licensee, or any end user of a Licensed Images or an
international agent for a Bavaria Entity. Except as set forth in Schedule
4.10(q) of the Disclosure Schedule, no person has requested indemnification from
any Bavaria Entity based on the proper use of an Owned Image or Licensed Image
within the last 24 months.
(r) To the Knowledge of Seller, no person is engaging in any
activity that infringes upon the Licensed Images or upon the rights of any
Bavaria Entity therein. The consummation of the transactions contemplated by
this Agreement will not result in the termination or impairment of any right of
a Bavaria Entity to sell, copy, market, advertise, perform, bundle with other
works, create derivative works of, distribute or sublicense any of the Licensed
Images.
(s) To the Knowledge of Seller, except as set forth in Section
4.10(s) of the Disclosure Schedule, each of the Bavaria Entities has, prior to
any display, bundling, marketing, performance, advertisement, sale,
reproduction, distribution or sublicensing of any Licensed Image, obtained in
writing all such releases and/or other third party consents or authorizations
required by law for such display, bundling, marketing, performance,
advertisement, sale, reproduction, distribution or sublicensing, or taken
reasonable steps to ensure that such releases, consents or authorizations have
been given. Except as set forth in Schedule 4.10(s) of the Disclosure Schedule
the Bavaria Entities have not entered into any contract under which a Bavaria
Entity has assumed any obligation for the storage and handling of Images outside
of the ordinary course of business.
(t) With respect to each material license or agreement by which
Bavaria has obtained the right to display, perform, advertise, market, sell,
reproduce, distribute, bundle with other derivative works, create derivative
works, market copy,
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license or sublicense the Licensed Images or by which Bavaria has granted to any
third party the right to display, sell, reproduce, perform or distribute any
Licensed Images:
(i) such license or agreement is legal, valid, binding and
enforceable and in full force and effect with respect to the Bavaria
Entities and, to the Knowledge of Seller, with respect to the relevant
counterparty and represents the entire agreement between the parties
thereto with respect to the subject matter thereof;
(ii) such license or agreement will not cease to be legal, valid,
binding and enforceable and in full force and effect on terms identical
to those currently in effect as a result of the consummation of the
transactions contemplated by this Agreement, nor will the consummation
of the transactions contemplated by this Agreement constitute a breach
or default under such license or agreement, or otherwise give any party
thereto a right to terminate such license or agreement;
(iii) except as set out in Section 4.10 of the Disclosure
Schedule, with respect to each such license or agreement, (A) no Bavaria
Entity has received any notice of termination or cancellation under such
license or agreement, and no party thereto has any right of termination
or cancellation thereunder except in accordance with its terms (B) no
Bavaria Entity has received any notice of a breach or default under such
license or agreement which breach or default has not been cured, and (C)
to the Knowledge of Seller no Bavaria Entity has granted to any other
person any rights, adverse or otherwise, under such license or agreement
that would constitute a breach of such licence or agreement; and
(iv) none of the Bavaria Entities nor, to the Knowledge of
Seller, any other party to such license or agreement, is in breach or
default thereof in any material respect, and, to the Knowledge of
Seller, no event has occurred that, with notice or lapse of time would
constitute such a breach or default or permit termination, modification
or acceleration under such license or agreement.
(u) No Bavaria Entity has granted to any Person the right to
distribute or sell the Licensed Images except in the ordinary course of
business.
(v) Section 4.10(v) of the Disclosure Schedule identifies each
material contract between Bavaria Entity and a photographer or other content
provider to a Bavaria Entity that has been terminated or revoked since January
1, 1998 that involves the display, reproduction, distribution, creation of
derivative works, bundling with other works, licensing or sublicensing the use
of any Image owned or controlled by such third party.
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(w) All publicly and freely available electronic versions of Owned
Images and Licensed Images with a resolution level at or above "comping
resolution" distributed or made available by the Bavaria Entities on a web site,
contain watermarks or similar protection mechanisms advertising or marketing
material.
4.11 ENVIRONMENTAL PROTECTION.
(a) Except as set forth in Section 4.11 of the Disclosure Schedule:
(i) no notice, notification, demand, request for information,
citation, summons or order has been received by, no complaint has been
filed against, no penalty has been assessed against, and no
investigation, action, claim, suit, proceeding or review is pending or,
to the Knowledge of Seller, threatened, by any person or Governmental
Authority against, any Bavaria Entity with respect to any matters
relating to or arising out of any Environmental Law which, individually
or in the aggregate, would have a Material Adverse Effect;
(ii) to the Knowledge of Seller, no Hazardous Substance has been
discharged, disposed of, dumped, injected, pumped, deposited, spilled,
leaked, emitted or released at, on or under any property now or
previously owned, leased or operated by any Bavaria Entity which
circumstance, individually or in the aggregate, would have a Material
Adverse Effect; and
(iii) there are no Environmental Liabilities that, individually
or in the aggregate, have had or would have a Material Adverse Effect.
(b) For purposes of this Section, the following terms shall have the
meanings set forth below:
(i) "Bavaria Entity" shall include any entity which is, in whole
or in part, a predecessor of any Bavaria Entity;
(ii) "Environmental Laws" means any and all federal, state, local
and foreign law (including common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit, or
governmental restrictions or any agreement with any Governmental
Authority or other third party, relating to human health and safety, the
environment or to pollutants, contaminants, wastes or chemicals or
toxic, radioactive, ignitable, corrosive, reactive or otherwise
hazardous substances, wastes or materials, in each case to the extent in
effect on February 27, 2000;
(iii) "Environmental Liabilities" means any and all liabilities
of or relating to the Bavaria Entities of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise,
which (A) have
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arisen under or relate to matters covered by Environmental Laws and (B)
have arisen from actions occurring or conditions existing on or prior to
the Closing; and
(iv) "Hazardous Substances" means any pollutant, contaminant,
waste or chemical or any toxic, radioactive, corrosive, reactive or
otherwise hazardous substance, waste or material, or any substance
having any constituent elements displaying any of the foregoing
characteristics, including, without limitation, petroleum, its
derivatives, by-products and other hydrocarbons, or any substance, waste
or material regulated under any Environmental Laws.
4.12 FINANCIAL STATEMENTS. Holdings has previously furnished Buyer with
a true and complete copy of the unaudited consolidated balance sheets of Bavaria
as of December 31, 1999 and the related statements of income for the fiscal year
then ended (the "Bavaria Financial Statements"). Subject to the elimination of
transactions and balances between the Bavaria Entities, the Bavaria Financial
Statements present fairly in all material respects the financial position of the
Bavaria Entities results of operations and changes in financial position and the
income of the Business for the period ended on the date thereof in conformity
with generally accepted accounting principles in Germany, applied on a
consistent basis. There are no debts, liabilities or obligations of any kind,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, to the extent required by GAAP to be reflected on
financial statements ("Liabilities") of any Bavaria Entity, other than
Liabilities (i) reflected or reserved against on the Bavaria Financial
Statements or (ii) incurred in the ordinary course of business, consistent with
the past practices of the Bavaria Entities, since December 31, 1999, provided,
however, that to the extent any such Liabilities exist, they shall be offset
against any assets reflected on the Bavaria Financial Statements which are later
determined to have a greater value than as reflected thereon.
4.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 4.13 of the Disclosure Schedule, since the date of the Bavaria Financial
Statements, there has not been any event, change or effect which has had or
would reasonably be expected to have a Material Adverse Effect in the financial
condition, properties, business, results of operations or, to the Knowledge of
Seller, prospects of the Bavaria Entities taken as a whole. None of the Bavaria
Entities are currently in default on any installment or installments on
indebtedness for borrowed money, or on any rental payment on any long-term
lease.
4.14 ABSENCE OF CHANGES. Except as set forth in Section 4.14 of the
Disclosure Schedule, since the date of the Bavaria Financial Statements, the
Business has been operated in the ordinary course, and there has not been
incurred, nor has there occurred:
(a) Any material damage, destruction or loss (whether or not covered
by insurance), adversely affecting the Business or any of the material Assets;
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(b) Any issuance, declaration, setting aside or payment of any
dividend or other distribution of cash or property on any of the capital stock
of any Bavaria Entity, or any direct or indirect redemption, purchase or other
acquisition of any shares of capital stock of any Bavaria Entity or any
agreement or commitment by any Bavaria Entity to do so;
(c) Any strikes, work stoppages or other material labor disputes
involving any Employees;
(d) Any sale, transfer or other disposition of any of the Assets,
except for sales made in the ordinary course of business;
(e) Any amendment, termination, waiver or cancellation of any
Material Agreement included in the Assets, or of any right or claim thereunder;
(f) Any (i) general uniform increase in the compensation of the
Employees of the Bavaria Entities (including, without limitation, any increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment),
other than in the ordinary course of business and consistent with past practice,
(ii) increase in any compensation payable by any Bavaria Entity to any officer,
director, Employee, consultant or agent of any Bavaria Entity, other than in the
ordinary course of business and consistent with past practice, (iii) loan or
commitment therefor made by any Bavaria Entity to any officer, director,
stockholder, Employee, consultant or agent of a Bavaria Entity, (iv) grant of
any severance or termination pay to any director, officer or Employee of any
Bavaria Entity, or (v) entering into any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any director, officer or Employee of any Bavaria Entity.
(g) Any change in the accounting methods, procedures or practices
followed by the Bavaria Entities;
(h) Any material change in policies, operations or practices of the
Bavaria Entities, including, without limitation, with respect to selling
methods, returns, discounts or other terms of sale, as well as payments of
liabilities;
(i) Any sales contracts or commitments which will be materially in
excess of the capacity of the Bavaria Entities as of the Closing Date;
(j) Any purchase contracts or commitments materially in excess of
the requirements of the Business in the ordinary course;
(k) Except as contemplated by clause (i) of Section 5.8 hereof, any
capital appropriation, expenditure or commitment therefor by the Bavaria
Entities;
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(l) Except as contemplated by clauses (ii) and (iii) of Section 5.8
hereof and except with respect to the Severance Plans, any material change in
policies, operations or practices of the Bavaria Entities concerning the
Employees thereof, including, without limitation, with respect to any Employee
fringe Benefit Plans;
(m) Any event, occurrence or development within the control of UBIBV
and the Bavaria Entities which has, or would reasonably be expected to have a
Material Adverse Effect;
(n) Any creation or assumption by any Bavaria Entity of any
Encumbrance on any Asset other than in the ordinary course of business,
consistent with past practice;
(o) Any making of any loan, advance or capital contribution to or
investment in any person by any Bavaria Entity, involving an amount in excess of
Two Hundred Thousand Dollars ($200,000);
(p) Any making or rescission of any material express or deemed
election relating to Taxes, settlement or compromise of any material claim,
action, suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, or except as may be required by applicable law,
made any change to any of its material methods of reporting income or deductions
for federal income tax purposes from those employed in the preparation of its
most recently filed federal and foreign income tax returns; and
(q) Any agreement, whether in writing or otherwise, for any Bavaria
Entity to take any of the actions enumerated in this Section 4.14 or any other
material action outside of the ordinary course of business.
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4.15 TAX MATTERS. Except as will be disclosed not later than March 26,
2000 in a Schedule 4.15:
(a) (i) to the Knowledge of Seller, all Returns required to be filed
by or on behalf of any Bavaria Entity have been timely filed in accordance with
all applicable laws (including allowance for extension of time to file); (ii) to
the Knowledge of Seller, such Returns are true, correct and complete in all
material respects (excluding, however, any inaccuracy the correction of which
would not cause a net Tax deficiency on such Returns); (iii) all Taxes shown on
such Returns as due and payable have been paid; (iv) each Bavaria Entity has
maintained with respect to transfer pricing proper intercompany agreements and
concurrent and supporting documentation as required under OECD guidelines, such
that no transfer pricing amounts will be denied as deductions in any
jurisdiction by reason of a lack of proper agreements or supporting
documentation; (v) there are no agreements or consents currently in effect with
any Taxing Authority for the extension or waiver of the time (A) to file any
Return or (B) for assessment or collection of any Taxes relating to the income,
properties, employees or operations of the Bavaria Entities, or (C) for the
retention of records, documents or Returns; (vi) to the Knowledge of Seller, all
Taxes which the Bavaria Entities are required by law to withhold or collect have
been duly withheld or collected, and have been timely paid over to the
appropriate Taxing Authority to the extent due and payable; and (vii) to the
Knowledge of Seller, no power of attorney with respect to any Tax matter of any
Bavaria Entity is currently in force.
(b) Each Bavaria Entity that is a non-U.S. corporation but is
engaged in trade or business in the United States, has filed all reports and has
created and/or retained all records required under Code Section 6038A with
respect to its ownership by and transactions with related parties. Each related
foreign person required to maintain records under Code Section 6038A with
respect to transactions between such Bavaria Entity and the related foreign
person has maintained such records. All documents that are required to be
created and /or preserved by the related foreign person with respect to
transactions with any such Bavaria Entity are either maintained in the United
States, or such Bavaria Entity is exempt form the record maintenance
requirements of Code Section 6038A with respect to such transactions under
Treasury Regulation Section 1.6038A-1. No such Bavaria Entity is a party to any
record maintenance agreement with the Internal Revenue Service with respect to
Code Section 6038A
(c) There is no action, suit, proceeding, investigation, audit or
claim currently pending or, to the Knowledge of Seller, threatened, regarding
any Taxes relating to the income, properties or operations of the Bavaria
Entities.
(d) (i) No Bavaria Entity has executed or entered into a binding
agreement with a non-U.S. Taxing Authority, similar to a Closing Agreement
pursuant to US Code Section 7121, that is currently in force and will determine
the Tax Liability of such Bavaria Entity for any period ending after the Closing
Date; and (ii) to the Knowledge of Seller, no Bavaria Entity is subject to any
written ruling addressed to it by
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a non-U.S. Taxing Authority, comparable to a private letter ruling of the
Internal Revenue Service, nor has any such ruling been requested.
(e) No Bavaria Entity (i) is treated for any taxation purpose as
resident in a country other than the country of its incorporation or (ii) has
been subject to a claim by a Taxing Authority in a jurisdiction where a Bavaria
Entity does not file Returns that it is or may be subject to taxation by that
jurisdiction.
(f) None of the Bavaria Entities (i) has entered into any tax
sharing or similar agreement or arrangement (whether or not written and
including without limitation any arrangement under which tax losses or tax
reliefs are surrendered or claimed or agreed to be surrendered or claimed)
pursuant to which it will have any obligation to make any payments after the
Closing with respect to any period commencing after December 31, 1999, or (ii)
is liable to taxation chargeable primarily on any other company which is not a
Bavaria Entity.
(g) There are no liens for any Tax on the assets of the Bavaria
Entities except for taxes not yet due and payable.
(h) To the Knowledge of Seller (limited, however, to actual
knowledge), no charge to taxation will arise on, nor will any gain or loss
otherwise be recognized by, any Bavaria Entity by virtue of the entering into
and/or completion of this Agreement (excluding any charge to taxation that would
not arise, and gain or loss that would not be recognized, but for an action of
the Buyer after the Closing Date, including, without limitation, an election
under Code Section 338).
(i) To the Knowledge of Seller, each Bavaria Entity is duly
registered in any country or jurisdiction where it could legally be subject to
the collection or payment of value added Tax ("VAT").
(j) Complete and correct copies of the Returns set forth in Schedule
4.15 (to be provided not later than March 26, 2000) were made available to the
Buyer prior to the date of this Agreement.
(k) There is no contract, agreement, plan or arrangement of any
Bavaria Entity covering any person that, individually or collectively, will give
rise to the payment of any amount that would not be deductible by Buyer or its
Affiliates by reason of Code Sections 280G or 162(m).
(l) None of the Bavaria Entities is or has ever been a "United
States real property holding corporation," a "controlled foreign corporation," a
"personal holding company," a "foreign personal holding company," a "foreign
investment company," or a "passive foreign investment company," as each of those
terms is defined in the U.S. Code. None of the Bavaria Entities would, for 1999,
have constituted a foreign investment company or a passive foreign investment
company had it had U.S. shareholders.
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4.16 COMPLIANCE WITH LAWS, ETC. To the Knowledge of Seller, except with
respect to Environmental Laws, compliance with which is the subject of Section
4.11 hereof: (i) the Bavaria Entities are in compliance with (A) all applicable
Laws and (B) all applicable orders, writs, judgments, injunctions, decrees and
similar commands of Governmental Authorities and all decisions and awards of any
arbitration panel or tribunal, except in each case where noncompliance would
have a Material Adverse Effect; and (ii) except as set forth in Section 4.16 of
the Disclosure Schedule, since the date of the Bavaria Financial Statements, the
Bavaria Entities have not received any notification of any asserted present or
past failure by it to comply with such Laws or such orders, writs, judgments,
injunctions or decrees.
4.17 LITIGATION REGARDING THE BAVARIA ENTITIES. Except as set forth in
Section 4.17 of the Disclosure Schedule, there are no (i) civil or criminal
actions, suits, claims, investigations or legal or administrative or arbitration
(or other binding alternative dispute resolution) proceedings pending or, to the
Knowledge of Seller, threatened against any Bavaria Entity or any of the Assets
that seek damages in excess of $25,000 or which seek equitable relief, or (ii)
orders, writs, judgments, injunctions, decrees, awards or similar commands of
any Governmental Authority, or any arbitration tribunal or panel, applicable to
any Bavaria Entity, except, in each case in this Section 4.17(ii), for those
orders, writs, judgments, injunctions, decrees, awards or similar commands which
would not have Material Adverse Effect.
4.18 PERMITS, ETC. Set forth in Section 4.18 of the Disclosure Schedule
is a list of all material governmental licenses, permits, certificates or
inspection, other authorizations, filings and registrations which are necessary
for the Bavaria Entities to own and operate the Business and Assets as presently
operated in all material respects (collectively, the "Authorizations"). All the
Authorizations have been duly and lawfully secured or made by UBIBV and Holdings
and are in full force and effect and the Bavaria Entities are in material
compliance with all such Authorizations. There are no proceedings pending or, to
the Knowledge of Seller, threatened to revoke or limit any Authorization. None
of UBIBV, Holdings or the Bavaria Entities have received notice of any violation
of any Authorization. Except as set forth in Section 4.18 of the Disclosure
Schedule, none of the transactions contemplated by this Agreement will
terminate, violate or limit the effectiveness of any of the Authorizations. The
Bavaria Entities have made, in a timely manner, all material filings, reports,
notices and other communications with the appropriate Governmental Authority,
and have otherwise taken, in a timely manner, all other action required to be
taken by them, reasonably necessary to secure the renewal of the Authorizations
prior to the dates of their respective expirations.
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4.19 EMPLOYEES; LABOR RELATIONS. (a) Except as set forth in Section 4.19
of the Disclosure Schedule (i) the Bavaria Entities (A) are not delinquent in
the payment to or on behalf of any past or present Employees of the Bavaria
Entities of any wages, salaries, social security premiums, commissions, bonuses,
benefit plan contributions or other compensation (including without limitation
disability compensation) for all periods prior to February 27, 2000 and (B) are
not delinquent in the payment of any amount which is due and payable to any
state or state fund pursuant to any workers' compensation statute, rules or
regulations or any amount which is due and payable to any workers' compensation
claimant or any other party arising under or with respect to a claim that has
been filed under state workers' compensation statutes and approved in the
ordinary course in accordance with the policies of the Bavaria Entities
regarding workers' compensation and/or any applicable state statute or
administrative procedure; (ii) there is no labor strike, slowdown or work
stoppage in progress against any Bavaria Entity; (iii) no collective bargaining
agreement currently exists or is currently being negotiated by any Bavaria
Entity; (iv) to the Knowledge of Seller, there has been no request to any
Bavaria Entity for collective bargaining on behalf of any Employees not
represented currently by a union or from the National Labor Relations Board in
respect of any Employees of any Bavaria Entity; (v) to the Knowledge of Seller,
no union representation or jurisdictional dispute or question exists respecting
any Employees of any Bavaria Entity; (vi) no material dispute exists between any
Bavaria Entity and any of their respective sales representatives or, to the
Knowledge of Seller, between any such sales representatives with respect to
territory, commissions, products or any other terms of their representation; and
(vii) to the Knowledge of Seller, there has been no "mass layoff" or "plant
closing" as defined by WARN with respect to any of the Bavaria Entities within
the six (6) months prior to Closing.
4.20 EMPLOYEE BENEFITS.
(a) Benefit Plans. Section 4.20(a) of the Disclosure Schedule lists
each employee benefit plan (within the meaning of Section 3(3) of ERISA)
consulting or other compensation agreements, incentive, equity or equity-based
compensation, severance pay, sick leave, vacation pay, salary continuation for
disability, retirement benefits scheme (within the meaning of Section 611 of the
UK Income and Corporation Taxes Act 1988 (the "Taxes Act") personal pension
scheme (within the meaning of Section 630 of the Taxes Act) pension or
superannuation arrangement stock purchase plan, stock option plan, fringe
benefit plan, bonus plan and any other deferred compensation agreement or plan
or funding arrangement which covers any Employee immediately prior to Closing
and which is sponsored or maintained or to which contributions are required to
be made by (i) UBIBV, or Holdings or (ii) any other organization which is a
member of a controlled group of organizations (within the meanings of Sections
414(b), (c), (m) or (o) of the Code) or an associated employer (within the
meaning of Section 590A(3) or (4) of the Taxes Act) of which UBIBV or Holdings
is a member (the "Controlled Group"), such plans described in this sentence
being referred to collectively as the "Benefit Plans." Except as set forth on
Section 4.20(a) of the Disclosure Schedule, there are no material employee
plans, arrangements,
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benefit programs or similar plans which cover Employees immediately prior to
Closing. Schedule 4.20(a) separately sets forth each Benefit Plan which is a
multiemployer plan, as defined in Section 3(37) of ERISA ("Multiemployer Plan"),
or is or has been subject to Sections 4063 or 4064 of ERISA ("Multiple Employer
Plans").
(b) Documents Furnished. UBIBV and Holdings have made available to
Buyer and Xxxx Xxxxx a current, accurate and complete copy of each Benefit Plan
specified in Section 4.20(a) of the Disclosure Schedule and, to the extent
applicable, copies of the most recent:
(i) determination letter or outstanding request for a
determination letter with respect to Benefit Plans intended to be
qualified under Section 401(a) of the Code or, as the case may be,
Chapters I or IV Part XIV or the Taxes Act; and
(ii) Form 5500 with respect to all Benefit Plans, as applicable,
for which separate Form 5500's are filed, with all attachments and
schedules thereto.
(c) [Intentionally Omitted]
(d) Except as set forth on Section 4.20(c) of the Disclosure
Schedule, for each Benefit Plan specified below, the following is true:
(i) each such Benefit Plan which is intended to qualify under
Section 401(a) of the Code as the case may be, Chapters I or IV Part XIV
or the Taxes Act has received a favorable determination letter as to its
qualification under the Code or the Taxes Act, and to the Knowledge of
Seller nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification;
(ii) with respect to all Benefit Plans, there are no actions,
suits or claims (other than routine claims for benefits in the ordinary
course) pending, and to the Knowledge of Seller there are no threatened
actions, suits or claims (other than routine claims for benefits in the
ordinary course);
(iii) each of the Benefit Plans is, and its administration is and
has been since inception, in compliance with ERISA and the Code, except
for such failures to comply which could not reasonably be expected to
have a Material Adverse Effect on the Business;
(iv) all contributions and other payments required to be made by
UBIBV, Holdings or any Bavaria Entity to any Benefit Plan under the
terms of such Benefit Plan in respect of Employees for any period ending
on the Closing have been made;
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(v) no employer securities, employer real property or other
employer property is included in the assets of any Benefit Plan;
(vi) [Intentionally Omitted]
(vii) Buyer will not have (x) any obligation to make any
contribution to any Multiemployer Plan under which UBIBV or the Controlled Group
had contribution obligations prior to the Closing Date or (y) any withdrawal
liability from any such Multiemployer Plan under Section 4201 of ERISA;
(viii) there has been no "reportable event" as that term is
defined in Section 4043 of ERISA and the regulations thereunder with respect to
the Benefit Plans which would require the giving of notice or any event
requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA;
(ix) none of UBIBV nor the Controlled Group has terminated any
Benefit Plan, or incurred any outstanding liability under Section 4062 of ERISA
to the PBGC, or to a trustee appointed under Section 4042 of ERISA. All premiums
due to the PBGC with respect to the Benefit Plans have been paid;
(x) neither UBIBV nor the Controlled Group or any organization
to which UBIBV is a successor parent corporation, within the meaning of Section
4069(b) of ERISA, has engaged in any transaction, within the meaning of Section
4069 of ERISA; and
(xi) none of the Benefit Plans which are "welfare benefit plans"
within the meaning of Section 3(1) of ERISA provide for continuing benefits or
coverage for any participant or any beneficiary of a participant
post-termination of employment, except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") or benefits at
the expense of the participant or the participant's beneficiary and each of
UBIBV and the Controlled Group which maintains a "group health plan" within the
meaning of Section 5000(b)(1) of the Code has complied with the notice and
continuation requirements of Section 4980B of the Code, COBRA, Part 6 of
Subtitle B of Title I of ERISA and the regulations thereunder, except for such
failures to comply which could not reasonably be expected to have a Material
Adverse Effect on the Business.
(e) No Changes. Except as set forth in Section 4.20 of the
Disclosure Schedule, on or after February 27, 2000 and before the Closing, no
Benefit Plan as it affects the Employees has been, or will be (i) amended in any
manner which would materially increase the benefits accrued, or which may be
accrued, by any participating or sponsoring employer thereunder or (ii) amended
in any manner which would increase the cost to UBIBV, Holdings, any Bavaria
Entity or Buyer or Xxxx Xxxxx of maintaining such Benefit Plan except to the
extent required by law.
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4.21 POWERS OF ATTORNEY. On the Closing Date, there will be no persons,
firms, associations, corporations or business organizations or entities holding
general or special powers of attorney from any Bavaria Entity.
4.22 AGREEMENTS, ETC. Set forth in Section 4.22 of the Disclosure
Schedule is a list of all of the following contracts, agreements, documents,
instruments, understandings or arrangements, written or oral, included in the
Assets (collectively, the "Material Agreements"):
(a) Contracts involving the expenditure of more than Two Hundred
Thousand Dollars ($200,000) in any instance for the purchase of materials,
supplies, equipment or services, specifying those which are not cancelable on
thirty (30) days notice without penalty;
(b) Collective Bargaining Agreements with labor unions;
(c) Contracts and agreements relating to the leasing (as lessor or
lessee) or to the conditional purchase or sale of any property, real, personal
or mixed in excess of Two Hundred Thousand Dollars ($200,000) per year;
(d) Indentures, mortgages, promissory notes, loan agreements,
capital leases, security agreements, or other agreements or commitments for the
borrowing of money, or the purchase of assets involving deferred payments (in
the latter case, involving payments in excess of Two Hundred Thousand Dollars
per year), or which otherwise evidence indebtedness for borrowing or which
create an Encumbrance on any of the Assets;
(e) Guarantees of the obligations of a third party or agreements to
indemnify third parties;
(f) Individual employment, severance or consulting agreements or
arrangements under which payments were in excess of Two Hundred Thousand Dollars
($200,000) during 1999 or are reasonably projected to exceed Two Hundred
Thousand Dollars ($200,000) in 2000;
(g) Distributor, dealer, sales, advertising, agency, manufacturer's
representative, franchise or similar contracts or any other contract relating to
the payment of a commission under which payments were in excess of Two Hundred
Thousand Dollars ($200,000) during 1999 or are reasonably projected to exceed
Two Hundred Thousand Dollars ($200,000) in 2000;
(h) contracts granting a right of first refusal or first negotiation
with respect to the capital stock of any Bavaria Entity;
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(i) partnership or joint venture agreements with unaffiliated third
parties;
(j) agreements for the acquisition, sale or lease of material
properties or assets of any Bavaria Entity since December 31, 1996 which involve
payments in excess of Two Hundred Thousand Dollars ($200,000) per year;
(k) agreements that purport to limit, curtail or restrict the
ability of any Bavaria Entity to compete in any geographic area or line of
business, except for exclusive distributor or agency agreements pursuant to
which a Bavaria Entity is not the distributor or agent;
(l) agreements between any Bavaria Entity, on the one hand, and
UBIBV, Holdings or Affiliate of UBIBV or Holdings, or any officer, director or
Employee of any Bavaria Entity, on the other hand;
(m) contracts or agreements with any Governmental Authority which
involve payments in excess of Two Hundred Thousand Dollars ($200,000) per year;
and
(n) agreements relating to the license, purchase, right to use or
other supply of still photographic images to any Bavaria Entity which involve
payments in excess of Two Hundred Thousand Dollars ($200,000) per year.
True copies of all written Material Agreements, described on Section
4.22 of the Disclosure Schedule have been furnished to Buyer and Xxxx Xxxxx.
Each of the Material Agreements constitutes a valid and binding obligation of
the Bavaria Entity party thereto, enforceable in accordance with its terms and
is valid and in full force and effect and, except as set forth in Section 4.22
of the Disclosure Schedule, the transactions contemplated hereby will not
require the consent of any party thereto or otherwise adversely affect the
validity and effectiveness thereof. The Bavaria Entities are not in default in
any material respect or alleged to be in default in any material respect under
any Material Agreement nor, to the Knowledge of Seller, is any other party to
any of the Material Agreements in default of any of its obligations thereunder.
4.23 [INTENTIONALLY OMITTED]
4.24 INSURANCE. Section 4.24 of the Disclosure Schedule sets forth a
list of insurance policies (including information on the premiums payable in
connection therewith and the scope and amount of the coverage provided
thereunder) maintained by any Bavaria Entity, which policies have been issued by
insurers which, to the Knowledge of Seller, are reputable and financially sound
and provide coverage for the operations conducted by the Bavaria Entities of a
scope and coverage consistent with customary industry practice.
4.25 ADDITIONAL REPRESENTATIONS OR WARRANTIES. Except as expressly set
forth in Section 3.1 and in Sections 4.1 through 4.24 hereof or in the
certificates, annexes,
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Exhibits and Schedules hereto, UBIBV makes no representations or warranties to
the Buyer or Xxxx Xxxxx (including, without limitation, no representations or
warranties with respect to financial projections), express or implied, and no
representations or warranties by UBIBV, Holdings or Unicorn to Buyer or Xxxx
Xxxxx shall be deemed to arise hereafter except as set forth (i) in this
Agreement and the documents contemplated hereby including any certificates,
annexes or schedules executed and/or delivered at the Closing by UBIBV or
Holdings or (ii) in documents otherwise delivered by UBIBV or Holdings to Buyer
or Xxxx Xxxxx on or after the date of this Agreement that have been executed by
UBIBV or Holdings and which expressly makes representations and warranties to
Buyer or Xxxx Xxxxx.
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