EXECUTION COPY
AMENDMENT NO. 1 TO
STOCK PURCHASE AGREEMENT
dated as of November 25, 1998
among
VIACOM INTERNATIONAL INC.,
XXXXXXX plc
and
XXXXXXX INC.
AMENDMENT NO. 1, dated as of November 25, 1998 (this "Amendment"),
to the Stock Purchase Agreement, dated as of May 17, 1998 (the "Stock Purchase
Agreement"), among VIACOM INTERNATIONAL INC., a Delaware corporation (the
"Seller"), PEARSON INC., a Delaware corporation (the "Purchaser"), and XXXXXXX
plc, a corporation organized under the laws of the United Kingdom that is the
indirect holder of all of the outstanding capital stock of the Purchaser (the
"Parent").
W I T N E S S E T H :
WHEREAS, the Seller, the Purchaser and the Parent desire to amend
the Stock Purchase Agreement in certain respects to provide for, among other
things, (i) the designation of additional direct or indirect Subsidiaries of the
Seller as Publishing Subsidiaries, Directly Acquired Publishing Subsidiaries,
Directly Acquired B&P and Reference Publishing Subsidiaries (as defined herein),
and Directly Acquired Foreign Subsidiaries and of certain assets as Assets; (ii)
the assignment by Parent of its right to purchase the Shares of certain Directly
Acquired Publishing Subsidiaries, Directly Acquired Foreign Subsidiaries,
Directly Acquired B&P and Reference Publishing Subsidiaries (including certain
of the additional Subsidiaries designated herein) and certain other properties
(all such Shares and other properties, including those which Parent or any of
its Affiliates is to purchase, together with all right, title and interest
therein and thereto, collectively, the "Sold Properties"), (x) to Purchaser or
other Subsidiaries of the Parent (each a "Parent Purchaser") or (y) to certain
Parent Purchasers and, if Parent so elects pursuant to Section 2.01(b) hereof,
the Shares of the Directly Acquired B&P and Reference Publishing Subsidiaries
and the covenant not to compete set forth in Section 5.12(c) of the Stock
Purchase Agreement, as amended by this Amendment, to Xxxxx, Muse Xxxxx XXX, a
Delaware limited liability company ("Xxxxx Muse"; the Parent Purchasers,
together with Xxxxx Muse if such election is made, the "Purchasing Entities");
provided, however, that no such assignment shall release the Purchaser or the
Parent from any liability under the Stock Purchase Agreement or delay the
consummation of the purchase and sale of the Sold Property under the Stock
Purchase Agreement; (iii) the manner in which each Sold Property is to be sold
and the consideration to be paid at Closing by each Purchasing Entity for each
Sold Property; and (iv) if Parent makes the election pursuant to Section 2.01(b)
hereof, the execution of the acknowledgment by Seller, Parent and Xxxxx Muse of
the right of Parent to assign the right to purchase the Shares of the Directly
Acquired B&P and Reference Publishing Subsidiaries and the covenant not to
compete set forth in Section 5.12(c) of the Stock Purchase Agreement, as amended
by this Amendment, to Xxxxx Muse (capitalized terms not defined herein have the
meanings ascribed to them in the Stock Purchase Agreement);
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Stock Purchase Agreement. (a) The
defined term "Ancillary Agreements" set forth in Section 1.01 is hereby
deleted in its entirety and replaced with the following:
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""Ancillary Agreements" means the Services Agreements, the
License Agreements, the Sublease Agreement, the S&S Software License
Agreement and the Purchaser Software License Agreement."
(b) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Assets" set forth therein:
""B&P and Reference Publishing Businesses" means, collectively, on
the date hereof, the United States business and professional and reference
publishing businesses included within the publishing segment of Viacom as
reported in the Annual Report on Form 10-K of Viacom for the year ended
December 31, 1997, and specifically excluding the Consumer Business, and
the children's learning, higher education and non-United States business
and professional and reference publishing businesses (other than the
interest in New York Institute of Finance (Holdings) L.D.C.). For the
purposes of this Agreement, "children's learning", "higher education",
"business and professional" and "reference" shall have the meanings
commonly employed by the management of Simon & Xxxxxxxx on the date of
this Agreement, "reference" specifically includes "reference", "library
reference", "Macmillan Computer Publishing" and "Macmillan Publishing"
(and any other variation on the term "Macmillan", other than in connection
with Macmillan College Publishing, but specifically excluding any consumer
titles listed in Schedule D attached to the Purchaser to Consumer
Trademark License Agreement) and "business" refers to businesses managed
as a unit, without regard to the specific legal entity that conducts such
business."
(c) The defined term "Base Price" set forth in Section 1.01 is hereby
deleted in its entirety and replaced with the following:
""Base Price" means $4,620,000,000."
(d) The defined term "Consumer Business" set forth in Section 1.01 is
hereby deleted in its entirety and replaced with the following:
""Consumer Business" means the consumer/trade publishing business
that is included within the publishing segment of Viacom as reported in
the Annual Report on Form 10-K of Viacom for the year ended December 31,
1997 and the Learning Products Group. For the purposes of this Agreement,
"consumer" and "trade" shall have the meanings commonly employed by the
management of Simon & Xxxxxxxx on the date of this Agreement."
(e) The defined term "Closing Net Assets" set forth in Section 1.01 is
hereby modified by inserting the following text immediately after the phrase
"total assets" and immediately before the phrase "minus total liabilities":
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"(excluding intangibles, net, consisting of goodwill and publishing
rights)"
(f) The defined term "Closing Net Assets Adjustment Amount" set forth in
Section 1.01 is hereby modified by inserting the following text at the end
thereof:
"(excluding intangibles, net, consisting of goodwill and publishing
rights). For purposes of calculating the Closing Net Assets Adjustment
Amount, the December 31, 1997 Audited Balance Sheet shall be adjusted to
eliminate the total net assets (excluding intangibles, net, consisting of
goodwill and publishing rights) of the Learning Products Group."
(g) The defined term "December 31, 1997 Audited Balance Sheet" set forth
in Section 1.01 is hereby modified by inserting the following sentence
immediately after the first sentence thereof:
"For purposes of computing the Closing Net Assets Adjustment Amount, the
December 31, 1997 Audited Balance Sheet and the Estimated Closing Net
Assets shall be adjusted to exclude intangibles, net, consisting of
goodwill and publishing rights."
(h) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "December 31, 1997 Audited Balance
Sheet":
""Directly Acquired B&P and Reference Publishing Subsidiaries" means
the entities set forth on Schedule 5."
(i) The defined term "Final Net Assets Adjustment Amount" set forth in
Section 1.01 is hereby modified by (i) inserting the phrase "(excluding
intangibles, net, consisting of goodwill and publishing rights)" immediately
after the phrase "total assets" and immediately before the phrase "minus total
liabilities" and (ii) inserting the following sentence to the end thereof:
"For purposes of calculating the Final Net Assets Adjustment Amount, the
December 31, 1997 Audited Balance Sheet shall be adjusted to
eliminate the total net assets (excluding intangibles, net,
consisting of goodwill and publishing rights) of the Learning
Products Group."
(j) The following defined terms are hereby inserted in Section 1.01
immediately following the defined term "Hazardous Materials" set forth therein:
""Xxxxx Muse" means Xxxxx, Muse Xxxxx XXX, a Delaware limited
liability company.
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"Xxxxx Muse Transfer" means the transfer and delivery of all of the
outstanding capital stock of the Directly Acquired B&P and Reference
Publishing Subsidiaries by the Seller or its Affiliates to Xxxxx Muse, if
the Parent elects to assign the right to purchase such capital stock to
Xxxxx Muse pursuant to Section 2.01(b) of this Agreement."
(k) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Law" set forth therein:
""Learning Products Group" means all right, title and interest in
the assets and liabilities comprising the Simon & Xxxxxxxx Learning
Products Group (which shall have the meaning commonly employed by the
management of Simon & Xxxxxxxx on the date of this Agreement), including,
without limitation, all rights to the business known as the "Red Rocket"
website, which includes, without limitation, the domain name (being
"xxxxxxxxx.xxx"), the trademark (being "Red Rocket"), and any third-party
contracts and equipment used exclusively in such business."
(l) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Lien" set forth therein:
""Macmillan Trademark Sharing Agreement" means the agreement,
dated November 8, 1993, between Macmillan, Inc. and Macmillan Limited
relating to names and marks."
(m) The defined term "Permitted Reorganization" set forth in Section 1.01
is hereby deleted in its entirety and replaced with the following:
""Permitted Reorganization" means an internal reorganization of
assets owned and employees employed by the Seller or its Subsidiaries,
including the Restructuring, to be completed prior to the Closing Date (1)
to effect any transfer (a) of Assets and employees to the Publishing
Subsidiaries (or otherwise in connection with an assignment permitted
pursuant to Section 11.08 hereof), (b) of assets and employees from the
Publishing Subsidiaries to the Seller or an Affiliate of the Seller (other
than a Publishing Subsidiary) and (c) of assets and employees from any
Publishing Subsidiary to any other Publishing Subsidiary and (2), at the
election of the Seller, in its sole discretion, to transfer any inactive
Subsidiary to the Seller or one of its Affiliates that is not a Publishing
Subsidiary."
(n) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Purchase Price":
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""Purchaser Software License Agreement" means the Software
License Agreement between Simon & Xxxxxxxx and Silver Xxxxxxx Xxxx Inc.
in the form attached hereto as Exhibit 1.01(d)".
(o) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Purchase Price" set forth therein:
""Restructuring" means the series of transactions effected on
September 30, 1998 whereby the Seller has caused (i) Xxxxxxxx-Xxxx, Inc.,
a Delaware corporation ("PHI"), to contribute to Arco Publishing, Inc.
("Arco"), Executive Reports Corporation, Executive Tax Reports, Inc., and
Xxxxxx X. Xxxxx Co. certain United States business and professional and
reference publishing business assets owned by PHI and (ii) Macmillan,
Inc., a Delaware corporation ("Macmillan"), to contribute to Jossey-Bass,
Inc., Publishers, a California corporation ("Jossey-Bass"), certain United
States business and professional and reference publishing business assets
owned by Macmillan."
(p) The following defined term is hereby inserted in Section 1.01
immediately following the defined term "Simon & Xxxxxxxx":
""Simon & Xxxxxxxx Software License Agreement" means the Software
Licence Agreement between Simon & Xxxxxxxx and Silver Xxxxxxx Xxxx Inc.
in the form attached as Exhibit 1.01(e)".
(q) The defined term "Sublease Agreement" is hereby deleted in its
entirety and replaced with the following:
""Sublease Agreement" means, collectively, (i) the Sublease
Agreement between the Purchaser (or an assignee reasonably acceptable to
the Seller and acceptable to the landlord for such property) and the
Seller and (ii) the Sublease Agreement between the Purchaser, or if Parent
makes the election pursuant to Section 2.01(b) of this Agreement, Xxxxx
Muse (or, in each case, an assignee reasonably acceptable to the Seller
and acceptable to the landlord for such property) on the one hand and the
Seller on the other, in the case of each of clause (i) and (ii) hereof
with respect to 0000 Xxxxxxxx, each substantially in the form attached
hereto as Exhibit 1.01(c) and containing representations and warranties
with respect to subleased property comparable to those contained in
Section 3.19 of this Agreement."
(r) Section 1.02 is hereby amended as follows:
(i) To insert the terms "Competing Computer Business", "Competing
Education Business" and "Competing International Business" and the
section
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references "5.12(c)", "5.12(a)" and "5.12(b)", respectively,
immediately following the term and corresponding section reference
for "COBRA";
(ii) To insert the term "Initial Allocation" and the section
reference "2.02(a)" immediately following the term and corresponding
section reference for "Indemnifying Party";
(iii) To insert the term "Parent Purchaser" and the section
reference "Recitals" immediately following the term and
corresponding section reference for "Parent Board Recommendation";
(iv) To insert the term "Purchasing Entities" and the section
reference "Recitals" immediately following the term and
corresponding section reference for "Purchaser's DC Plan";
(v) To insert the term "Sold Properties" and the section reference
"Recitals" immediately following the term and corresponding
reference for "Shares";
(vi) To delete the term "Competing Business" and the corresponding
section reference;
(vii) To delete the term "Draft Allocation Statement" and the
corresponding section reference; and
(viii) To delete the term "Stock Allocation" and the corresponding
section reference.
(s) Section 2.01 is hereby deleted in its entirety and replaced with the
following text:
"SECTION 2.01 Purchase and Sale (a) On the terms and subject to the
conditions set forth in this Agreement, at the Closing the Seller shall
sell, convey, assign, transfer and deliver to each Purchasing Entity
(and/or cause one or more of its Subsidiaries to sell, convey, assign,
transfer and deliver to such Purchasing Entity) each Sold Property being
acquired by such Purchasing Entity and each Purchasing Entity shall
purchase, acquire and accept from the Seller or such Subsidiaries each
Sold Property, with each Sold Property being sold by the party shown under
the column "Seller" and purchased by the party shown under the column
"Purchaser" on Schedule A. Such transactions shall occur in the following
order, with all such transactions constituting the Closing: all of the
transactions shown under Step I of Schedule A shall be completed first and
prior to any of the transactions shown under Steps II or III of Schedule
A; all of the transactions shown under Step II of Schedule A shall be
completed second and prior to any of the transactions shown under Step III
of Schedule A; all of the transactions shown
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under Step III of Schedule A shall be completed last and after any of the
transactions shown under Steps I and II of Schedule A; and all proceeds
received by a Publishing Subsidiary in connection with any such Step shall
be distributed by such Publishing Subsidiary to a non-Publishing
Subsidiary before the sale of such Publishing Subsidiary pursuant to any
subsequent Step.
(b) Parent shall have the right to elect to assign its right to
purchase the Shares of the Directly Acquired B&P and Reference Publishing
Subsidiaries and the covenant not to compete set forth in Section 5.12(c)
hereof to Xxxxx Muse and/or Xxxxx Muse's Affiliates. In order for such
election to be effective, (i) Parent must notify Seller in writing of such
election at least five days prior to the Closing and (ii) such notice
shall have attached to it an original of a parallel notice from Xxxxx Muse
to Parent whereby Xxxxx Muse notifies Parent of its intent to consummate
the purchase of the Shares of the Directly Acquired B&P and Reference
Publishing Subsidiaries and the covenant not to compete set forth in
Section 5.12(c) hereof, as contemplated by the Stock Purchase Agreement,
dated July 2, 1998, among Purchaser, Parent and Xxxxx Muse, as such
agreement may be amended, and as further set forth in this Agreement."
(t) The first sentence of Section 2.02(a) is hereby deleted in its
entirety and replaced with the following text:
"Each Purchasing Entity shall pay that portion of the Purchase Price
relating to each Sold Property as is specified in the Purchase Price
Notice (in accordance with the amounts shown under the column "Purchase
Price" in Schedule A next to each such Sold Property (the "Initial
Allocations"); the Initial Allocation with respect to Xxxxxxxx-Xxxx, Inc.
shall be increased or decreased from the amount listed on Schedule A, as
the case may be, to reflect the portion of the Closing Net Assets
Adjustment Amount required to be taken into account pursuant to Section
2.05(a)), in cash to the "Seller" shown next to such Sold Property in
Schedule A at the Closing, as provided in Section 2.05(a). Parent and
Purchaser agree that the Initial Allocations shall be the maximum amounts
allocated with respect to each Sold Property other than Xxxxxxxx-Xxxx,
Inc., and, notwithstanding anything else contained herein, such Initial
Allocations to each Sold Property other than Xxxxxxxx-Xxxx, Inc. shall not
be adjusted upward at any time. In addition, Parent and Purchaser agree
that at the Closing if any Purchasing Entity is for any reason unwilling
or unable to so pay or for any reason fails to pay such portion of the
Purchase Price so specified in the Purchase Price Notice, Parent and
Purchaser shall be liable and shall pay such portion of the Purchase Price
at Closing."
(u) The following text is hereby inserted at the end of Section 2.02(a):
"Notwithstanding the foregoing, no assignment of rights and
obligations to any Purchasing Entity shall release the Purchaser or Parent
from any liability hereunder. In
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the event that Parent has previously elected to assign the rights to
purchase certain Sold Property to Xxxxx Muse and/or one or more of its
Affiliates pursuant to Section 2.01(b) hereof, and Xxxxx Muse and/or such
Affiliates fail to perform at the Closing, then the Closing shall proceed
as though such election was not made, and such Sold Property shall be sold
directly to Parent and certain of Parent's Affiliates at the Closing."
(v) The first sentence of Section 2.02(b) is hereby deleted in its
entirety. The second sentence of Section 2.02(b) is hereby amended by
substituting the phrase "IBD Holdings" for the phrase "Viacom Holdings [name to
be changed]", deleting the word "and" before the phrase "at least $300 million,"
and adding at the end of such sentence the phrase "and, in the aggregate, $708
million to the Directly Acquired B&P and Reference Publishing Subsidiaries and
the covenant set forth in Sections 5.12(c), with the aggregate amount allocated
to all the Sold Properties with respect to the Base Price in all events not to
exceed the Base Price." The fifth sentence of Section 2.02(b) is hereby deleted
in its entirety and replaced with the following text:
"Within 75 days after the Closing Date, the Seller shall notify the
Purchaser either (i) that it consents to the Initial Allocations as set
forth in Schedule A or (ii) that it disagrees with the Initial
Allocations."
(w) The sixth sentence of Section 2.02(b) is hereby amended by
substituting the phrase "Initial Allocations," for the phrase "Draft Allocation
Statement,".
(x) Following the last sentence of Section 2.02(b), the following sentence
shall be added:
"If the resolution of any dispute regarding the Initial Allocations
results in a different amount of consideration being allocated to the
purchase of any Sold Property, the excess of any Initial Allocation paid
by the party listed in Schedule A as "Purchaser" over the amount of any
final allocation determined under this Section 2.02(b) shall be deemed
paid by such party on behalf of the actual "Purchaser" of Xxxxxxxx-Xxxx,
Inc. and received by the "Seller" of Xxxxxxxx-Xxxx, Inc."
(y) The first sentence of Section 2.02(c) is hereby deleted in its
entirety and replaced with the following text:
"The Seller, the Parent and the Purchaser shall, and, if applicable,
the Parent and the Purchaser shall cause Xxxxx Muse to, report the
federal, state, local and foreign Tax consequences of the transactions
contemplated by this Agreement in a manner consistent with the
transactions and order and timing of steps described in Section 2.01(a)
and the Initial Allocations, revised as agreed by the Seller, the Parent
and the Purchaser or as determined by the Independent Accounting Firm, as
the case may be."
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(z) The second sentence of Section 2.02(c) is hereby amended by
substituting for the phrase "Stock Allocations" the phrase "transactions, order
and timing of steps and Initial Allocations, as so revised,"
(aa) The final sentence of Section 2.03 shall be amended by inserting the
following text at the start thereof:
"Except as otherwise contemplated by the sequence of steps set forth in
Section 2.01(a),"
(bb) Section 2.04 is hereby deleted in its entirety and replaced with the
following text:
"SECTION 2.04. Closing Deliveries by the Seller. At the
Closing, the Seller shall deliver or cause to be delivered to each
Purchasing Entity (or Parent, on behalf of Parent, Purchaser and, if
applicable, Xxxxx Muse):
(i) stock certificates evidencing all of the shares of capital
stock acquired by such Purchasing Entity of (A) the Directly
Acquired Publishing Subsidiaries, (B) the Directly Acquired Foreign
Subsidiaries and (C) the Directly Acquired B&P and Reference
Publishing Subsidiaries, duly endorsed in blank or accompanied by
stock powers and transfer forms duly executed in blank;
(ii) receipts for the portion of the Purchase Price as is
specified in the Purchase Price Notice relating to each Sold
Property;
(iii) the Ancillary Agreements required to be delivered
pursuant to Section 8.02; and
(iv) any required stock transfer tax stamps."
(cc) Section 2.05 is hereby amended by substituting for the phrase "Parent
and the Purchaser shall deliver to the Seller" the phrase "each Purchasing
Entity shall deliver to the "Seller" noted opposite its name on Schedule A with
respect to each Sold Property being purchased by such Purchasing Entity" and by
inserting after the words "wire transfer" in Section 2.05(a) the words "or
intra-bank transfer".
(dd) Section 2.06(e) is hereby amended by substituting for the phrase "the
Parent and the Purchaser" the phrase "Xxxxxxx XX" and for the word "Seller" the
phrase "Paramount Communications Acquisitions Corp.", and inserting in the first
sentence of such Section 2.06(e) after the word "excess" the phrase ",which
amount shall be deemed to be paid in respect of the Shares of Xxxxxxxx-Xxxx,
Inc.,"
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(ee) Section 2.07 is hereby amended by inserting after the words "wire
transfer" the words "or intra-bank transfer."
(ff) Section 3.03 is hereby amended by inserting the following text
immediately after the phrase "Directly Acquired Publishing Subsidiaries":
", the Directly Acquired B&P and Reference Publishing Subsidiaries"
(gg) Section 3.12 is hereby amended by inserting the following text
immediately after the Section heading "Intellectual Property" and immediately
before clause (a):
"Except to the extent caused by (i) the direct sale of additional
Publishing Subsidiaries pursuant to this Amendment, (ii) the series of
transactions contemplated by clauses (i) and (ii) of the defined term
"Restructuring" set forth in Section 1.01 hereof or (iii) the Xxxxx Muse
Transfer (but, in the case of the Xxxxx Muse Transfer, only to the extent
that any inaccuracy or breach of the representations or warranties set
forth in this Section 3.12 would not have occurred had the transactions
contemplated by the Stock Purchase Agreement as in effect prior to this
Amendment been consummated in the manner set forth therein);"
(hh) Section 3.13(a) of the Stock Purchase Agreement is hereby amended by
adding the following sentence to the end thereof:
"Anything in this Section 3.13(a) to the contrary notwithstanding,
no individual currently or formerly employed in the Learning Products
Group, which individuals are listed on Section 3.13(a)(iv) of the
Disclosure Schedule, shall be a "Business Employee" or a "Former Business
Employee" for any purpose under this Agreement.
(ii) Section 3.13(a)(iv) is hereby added to the Disclosure Schedule in the
form attached to this Amendment.
(jj) Section 5.04(d) is hereby amended by inserting the following text
immediately after the phrase "consents and approvals" and immediately before the
phrase "that may be required":
"(including, without limitation, any consents, approvals, authorizations
or other actions or filings or notifications that are the responsibility
of Parent and Purchaser pursuant to Section 5.04(e); provided, however,
that in no event shall Seller or its Affiliates be liable under this
Agreement or otherwise for the failure to obtain any such consents,
approvals, authorizations or other actions or filings or notifications,
which shall be the sole responsibility of Parent and Purchaser pursuant to
Section 5.04(e))".
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(kk) Section 5.04 is hereby amended by inserting the following text
immediately after Section 5.04(d):
"(e) The Parent and the Purchaser shall be solely responsible, to
the extent not previously obtained, for (i) obtaining any consents,
approvals, authorizations or other action of or by, or making any filing
with or notification to, any Governmental Authority, including, but not
limited to, trademark or copyright filings, and (ii) obtaining any
consents, approvals, waivers, authorizations or other actions or giving
(or instructing the Seller to give) any notice under or pursuant to any
bond, note, Contract, Real Property Lease, license, permit, franchise or
other instrument to which the Seller or any B&P and Reference Publishing
Subsidiary is a party or by which any shares or assets of any B&P and
Reference Publishing Businesses may be bound or affected, arising from or
made necessary by, in the case of each of clause (i) and (ii), the direct
sale of additional Publishing Subsidiaries pursuant to this Amendment, the
Restructuring or the Xxxxx Muse Transfer. The Parent and the Purchaser
hereby acknowledge and agree that neither the Seller nor its Affiliates
shall have any liability to the Parent or the Purchaser in connection with
any Losses arising from the failure to obtain or to give any notice on the
consents, approvals, authorizations or other matters set forth in this
Section 5.04(e) including, without limitation, any change in the rights
granted to Macmillan, Inc. under the Macmillan Trademark Sharing
Agreement."
(ll) The first sentence of Section 5.08 is hereby deleted in its entirety
and replaced with the following text:
"Prior to the Closing Date, the Seller shall, and shall cause its
Subsidiaries to, effect the Permitted Reorganization."
(mm) Section 5.12 is hereby deleted in its entirety and replaced with
the following:
"SECTION 5.12. Non-Competition. (a) The Seller acknowledges that
reasonable limits on its ability to engage in activities competitive with
the Purchaser are warranted to protect the Purchaser's substantial
investment in acquiring the Shares, the Assets and the Businesses.
Accordingly, the Seller hereby covenants and agrees that during the period
commencing with the Closing Date and ending on the third anniversary of
the Closing Date, Viacom and the Seller shall not, and shall cause their
direct and indirect Subsidiaries not to (subject, in the case of its
existing Subsidiaries that are not wholly owned, to its fiduciary duties
to holders of minority interests), for the Seller's own account or jointly
with any other Person, publish or produce textbooks intended for use
primarily in instruction in academic institutions of higher learning in
the United States (a "Competing Education Business"); provided, however,
that the foregoing shall not be breached as a result of (a) the ownership
or other right to acquire by Viacom or the Seller (or any of their
Subsidiaries) of not more than an aggregate of 10% of any class of stock
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of a Person engaged, directly or indirectly, in a Competing Education
Business; (b) the acquisition of, holding by, operation of, or disposition
by Viacom or the Seller (or any of their Subsidiaries) of an interest in
any Person whose primary business is not a Competing Education Business;
(c) the licensing or sale of any of the Seller's or its Subsidiaries'
intellectual property for use in connection with any Competing Education
Business; (d) any activity relating to the publication of fiction or
non-fiction (other than in the subject matter of computer applications and
operation systems) sold primarily into the consumer retail channel; or (e)
any activity relating to any book or category of books presently published
by Simon & Xxxxxxxx'x Consumer division or similar in genre to any such
book or category.
"(b) The Seller acknowledges that reasonable limits on its ability
to engage in activities competitive with the Purchaser are warranted to
protect the Purchaser's substantial investment in acquiring the Shares,
the Assets and the Businesses. Accordingly, the Seller hereby covenants
and agrees that during the period commencing with the Closing Date and
ending on the third anniversary of the Closing Date, Viacom and the Seller
shall not, and shall cause their direct and indirect Subsidiaries not to
(subject, in the case of its existing Subsidiaries that are not wholly
owned, to its fiduciary duties to holders of minority interests), for the
Seller's own account or jointly with any other Person, publish or produce
(i) textbooks intended for use primarily in instruction in academic
institutions of higher learning outside of the United States or (ii) any
branded series of tutorial reference books in the computer applications
and operating systems categories outside of the United States (a
"Competing International Business"); provided, however, that the foregoing
shall not be breached as a result of (a) the ownership or other right to
acquire by Viacom or the Seller (or any of their Subsidiaries) of not more
than an aggregate of 10% of any class of stock of a Person engaged,
directly or indirectly, in a Competing International Business; (b) the
acquisition of, holding by, operation of, or disposition by Viacom or the
Seller (or any of their Subsidiaries) of an interest in any Person whose
primary business is not a Competing International Business; (c) the
licensing or sale of any of the Seller's or its Subsidiaries' intellectual
property for use in connection with any Competing International Business;
(d) any activity relating to the publication of fiction or non-fiction
(other than in the subject matter of computer applications and operation
systems) sold primarily into the consumer retail channel; or (e) any
activity relating to any book or category of books presently published by
Simon & Xxxxxxxx'x Consumer division or similar in genre to any such book
or category.
"(c) The Seller acknowledges that reasonable limits on its ability
to engage in activities competitive with the Purchaser are warranted to
protect the Purchaser's substantial investment in acquiring the Shares,
the Assets and the Businesses. Accordingly, the Seller hereby covenants
and agrees that during the period commencing with the Closing Date and
ending on the third anniversary of the Closing Date, the Seller shall not,
and shall cause their direct and indirect Subsidiaries not to (subject, in
the case
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of its existing Subsidiaries that are not wholly owned, to its fiduciary
duties to holders of minority interests), for the Seller's own account or
jointly with any other Person, publish or produce any branded series of
tutorial reference books in the computer applications and operating
systems categories in the United States (a "Competing Computer Business");
provided, however, that the foregoing shall not be breached as a result of
(a) the ownership or other right to acquire by the Seller (or any of their
Subsidiaries) of not more than an aggregate of 10% of any class of stock
of a Person engaged, directly or indirectly, in a Competing Computer
Business; (b) the acquisition of, holding by, operation of, or disposition
by the Seller (or any of their Subsidiaries) of an interest in any Person
whose primary business is not a Competing Computer Business; (c) the
licensing or sale of any of the Seller's or its Subsidiaries' intellectual
property for use in connection with any Competing Computer Business; (d)
any activity relating to the publication of fiction or non-fiction (other
than in the subject matter of computer applications and operation systems)
sold primarily into the consumer retail channel; or (e) any activity
relating to any book or category of books presently published by Simon &
Xxxxxxxx'x Consumer division or similar in genre to any such book or
category."
(nn) The following text is hereby inserted immediately following Section
5.13:
"SECTION 5.14. Harvard Medical School Publishing Program. (a)
Each party hereto agrees to cooperate in obtaining the consent of the
President and Fellows of Harvard College ("Harvard") under the agreement,
dated as of September 24, 1996, between Simon & Xxxxxxxx and Harvard
regarding the Harvard Medical School Publishing Program (the "Harvard
Agreement") in connection with the division of the rights granted to Simon
& Xxxxxxxx under the Harvard Agreement as between the Business and the
Consumer Business in connection with (i) the sale by Seller of the
Business as contemplated by this Agreement and the Ancillary Agreements
and (ii) the possible sale by Parent and Purchaser, or Affiliates thereof,
of the B&P and Reference Publishing Business following the Closing. Such
consent and division of rights, including, without limitation, any related
amendment to the Harvard Agreement, shall be in a form reasonably
satisfactory to the Seller and the Parent.
(b) Seller represents and warrants to Parent and Purchaser that as
of November 25, 1998, (i) $1,993,332 has been paid to Harvard as advances
under the Harvard Agreement ("Advances"), of which $1,160,000 has been
internally allocated to the Consumer Business, $166,666 to the B&P and
Reference Publishing Business and $666,666 to the "education business" (as
commonly used by the management of Simon & Xxxxxxxx on the date of this
Agreement) and (ii) $4,006,668 in Advances remains to be paid. Commencing
from the Closing Date and ending on the date which is the earlier of (x)
the termination of the Harvard Agreement or (y) such time as all Advances
have been paid, each milestone comprising all of the remaining Advances
shall be payable as between Seller or its Affiliates on the one hand and
Parent and/or Purchaser or their
14
Affiliates on the other hand, in a ratio of 58.33% by the Seller or its
Affiliates and 41.67% by Parent and/or Purchaser or their Affiliates. To
the extent that there are any reductions in the Advances payable to
Harvard from those payable under the Harvard Agreement on the date hereof,
the Advances payable by Seller or its Affiliates on the one hand and by
Parent and/or Purchaser on the other hand shall be reduced by a
proportionate amount of such reduction equal to the proportionate amount
of all remaining Advances payable by each party, as set forth in the
preceding sentence.
As used in this Agreement (i) "Consumer Business Advance Amount"
means (x) $3.5 million plus (y) any Budget amounts (as the term "Budget"
is defined in the Harvard Agreement) expended from the date hereof by the
Seller or its Affiliates minus (z) any reduction in remaining Advances
payable by Seller or its Affiliates and (ii) "Business Advance Amount"
means (x) $2.5 million plus (y) any Budget amounts (as the term "Budget"
is defined in the Harvard Agreement) expended from the date hereof by
Parent and/or Purchaser or their Affiliates minus (z) any reduction in
remaining Advances payable by Parent and/or Purchaser or their Affiliates.
(c) Any royalties owed under the Harvard Agreement in connection
with books, imprints, titles and the like published thereunder
("Royalties") relating to (i) the Consumer Business, up to the Consumer
Business Advance Amount, shall be the property of and paid over to Seller
or its Affiliates and (ii) the Business, up to the Business Advance
Amount, shall be the property of and paid over to Purchaser or its
Affiliates, in each case as a recoupment against the Consumer Business
Advance Amount or the Business Advance Amount, as the case may be. If at
any xxxx Xxxxxx or its Affiliates has recouped the Consumer Business
Advance Amount and Purchaser or its Affiliates has not recouped the
Business Advance Amount, then from such time all Royalties relating to the
Consumer Business shall be the property of and paid over to Purchaser or
its Affiliates until Purchaser or its Affiliates has recouped the Business
Advance Amount. Similarly, if at any time Purchaser or its Affiliates has
recouped the Business Advance Amount and Seller or its Affiliates has not
recouped the Consumer Business Advance Amount, then from such time all
Royalties relating to the Business shall be the property of and paid over
to Seller or its Affiliates until Seller or its Affiliates has recouped
the Consumer Business Advance Amount. At such time as Seller or its
Affiliates has recouped the Consumer Business Advance Amount and Purchaser
or its Affiliates has recouped the Business Advance Amount, all Royalties
shall be paid to Harvard in accordance with the Harvard Agreement.
(d) Each party hereto agrees to cooperate with each other party in
sharing all information in its possession from time to time relating to
the Harvard Agreement necessary for the calculation of the Royalties and
all amounts advanced in respect of Consumer Business Advance Amounts and
Business Advance Amounts, as the case may be, and any further information
which the parties reasonably believe is necessary or
15
desirable for the proper administration of their mutual relationship under
the Harvard Agreement and as set forth in this Section 5.14.
(e) In the event that the consents described in Section 5.14(a) are
not obtained or are only partially obtained, each party hereto agrees to
negotiate in good faith to reach an agreement as between them that
accomplishes the same economic result as is set forth in Sections 5.14(b)
and (c) hereof."
(oo) Section 6.02(a) of the Stock Purchase Agreement is hereby deleted in
its entirety and replaced with the following:
"SECTION 6.02. Retirement Plans. (a) It is agreed by both parties
that the Seller or one of its Affiliates will continue to maintain the VPP
and the Viacom Excess Pension Plan, with the benefit accruals of the
Business Employees under such plans ceasing as of the Closing Date and
Seller shall retain all liabilities thereunder. The Seller shall cause the
Business Employees to be fully vested in their accrued benefits in each
such plan as of the Closing Date."
(pp) Section 6.02(b) of the Stock Purchase Agreement is hereby amended by
inserting the following text at the end of the fifth full sentence thereof:
"and Seller shall retain all other liabilities under the VIP.
Notwithstanding anything to the contrary in this Section 6.02(b), in the
event that the Parent makes the election pursuant to Section 2.01(b) of
this Agreement, the Seller shall transfer and deliver the VIP account
balances of Business Employees and Former Business Employees designated in
writing by the Parent and the Purchaser, and the Seller shall also
transfer and deliver to Xxxxx Muse, or, if so directed by the Parent and
the Purchaser, cause the trustee of the VIP to transfer and deliver to the
trustee of a Xxxxx Muse defined contribution plan designated in writing by
the Parent and the Purchaser or Xxxxx Muse, if applicable, an amount equal
to the aggregate account balances of Business Employees and Former
Business Employees of the B&P and Reference Publishing Businesses so
designated by the Parent and the Purchaser."
(qq) Section 6.02(b) of the Stock Purchase Agreement is hereby further
amended by adding the following text to the end thereof:
"Notwithstanding anything to the contrary in this Section 6.02(b), in the
event that the Parent makes the election pursuant to Section 2.01(b) of
this Agreement, then (i) the Seller shall, (A) prior to Closing, establish
a separate non-qualified deferred compensation plan (the "HM EIP") with
terms, benefits and commitments identical to those provided under the VEIP
for the benefit of participating Business Employees and Former Business
Employees of the B&P and Reference Publishing Businesses designated
16
in writing by the Parent and the Purchaser and (B) at Closing, transfer
the HM EIP to Xxxxx Muse, (ii) the HM EIP shall assume responsibility for
all account balances and earnings thereon of such designated individuals
under the VEIP (it being understood that the S&S EIP shall not assume any
responsibility for the VEIP account balances and earnings thereon with
respect to such individuals) and (iii) the Parent and the Purchaser shall
cause Xxxxx Muse to assume the HM EIP at Closing and to honor the terms of
any elections previously made by participants under the VEIP. The
Purchaser and the Parent acknowledge that no assets will be transferred to
Xxxxx Muse in connection with the establishment of the HM EIP and the
assumption thereof by Xxxxx Muse."
(rr) Section 6.02(e) of the Stock Purchase Agreement is hereby amended by
(i) inserting the phrase "as soon as practicable, after the Closing,"
immediately after the phrase "and the Seller shall" in the first sentence
thereof and (ii) adding the following text to the end thereof:
"Notwithstanding anything to the contrary in this Section 6.02(e), in the
event that the Parent makes the election pursuant to Section 2.01(b) of
this Agreement, then (i) the Seller shall, (A) prior to Closing, (I)
establish a separate non-qualified deferred compensation plan (the "HM
DCP") providing for the payment of deferred benefits to participating
Business Employees and Former Business Employees of the B&P and Reference
Publishing Businesses designated in writing by the Parent and the
Purchaser who have previously deferred the settlement of performance
awards under the terms of the Paramount DCP and (II) transfer assets, if
any, and liabilities related to each designated individual's account
balance in the Paramount DCP, including all earnings thereon, into the HM
DCP (it being understood that no assets or liabilities related to any such
individual's account balance in the Paramount DCP will be transferred to
the S&S DCP) and (B) at Closing, transfer of the HM DCP to Xxxxx Muse and
(ii) the Parent and the Purchaser shall cause Xxxxx Muse to assume the HM
DCP at Closing and to honor the terms of the distribution election
previously made by the designated individuals, subject to the terms of the
HM DCP."
(ss) The following sentence is hereby inserted at the end of Section
6.03:
"For the avoidance of doubt, the Purchaser and the Seller
acknowledge that the term "Former Business Employees" for all purposes under
this Agreement shall mean all individuals who were at any time employed in a
publishing business other than the Consumer Business, including but not limited
to former employees of those businesses previously disposed of and set forth on
Schedule 8 attached hereto."
(tt) Section 6.05(a) of the Stock Purchase Agreement is hereby amended by
inserting the text "(other than severance liability arising from any claim by
any Business Employee for the disputed severance benefits described in Schedule
7)" at the end of clauses (ii), (v) and (vii) thereof.
17
(uu) Section 6.05(b) of the Stock Purchase Agreement is hereby amended by
inserting the following text at the beginning thereof:
"Except as may be otherwise agreed by a Business Employee and
Purchaser,"
(vv) Section 6.05 of the Stock Purchase Agreement is hereby amended by
inserting the following text immediately following Section 6.05(b):
"(c) Subject to Section 6.09, the Purchaser acknowledges that it
shall make all required stay bonus and cash severance payments to Business
Employees under the plans, programs, arrangements and agreements referred
to in Sections 3.13(a)(i)(A)(I)(13), (A)(I)(14) and (A)(III)(1) of the
Disclosure Schedule (as such plans, programs, arrangements and agreements
may be amended by the Purchaser and, with respect to the agreements
referenced in Section 3.13(a)(i)(A)(III)(1) of the Disclosure Schedule,
with the consent of the Business Employees) and shall not look to the
Seller for the cash payment of any amounts required to be paid
thereunder."
(ww) The following text is hereby inserted immediately following
Section 6.07:
"SECTION 6.08. Transition Period. During the period between the
Closing and December 31, 1998, the Seller shall maintain the benefits of
the Business Employees and Former Business Employees under each of the
Viacom Plans listed on Schedule 6 attached hereto. Purchaser or Parent
shall promptly reimburse Seller for Seller's direct out-of-pocket expenses
for maintaining such Viacom Plans upon transmission to Purchaser or Parent
of a statement of such expenses in relation thereto.
SECTION 6.09. Enhanced Severance and Retention Agreements. The
Seller agrees to reimburse the Parent and the Purchaser for any severance
payment that the Parent or the Purchaser becomes obligated to make to any
Business Employee who received an Enhanced Severance and Retention
Agreement pursuant to the claim of any Business Employee described on
Schedule 7 attached hereto; provided, however, that the Parent and the
Purchaser agree (i) to notify the Seller promptly and in writing of any
such claim brought against the Parent, the Purchaser or any of the
Publishing Subsidiaries on or after the Closing Date and (ii) not to
settle any such claim without approval of the Seller, such approval not to
be unreasonably withheld or delayed; and, provided, further, that the
Parent and the Purchaser have not amended the employment agreement and/or
the Enhanced Severance Retention Agreement with the Business Employee in a
manner that adversely impacts Seller's ability to defend the claim of such
Business Employee. Seller shall notify Parent and Purchaser promptly after
receiving the notice described in clause (i) whether or not it intends to
defend such claim and, if no such notice is received by Parent or
Purchaser within thirty days after such receipt, Seller shall be deemed to
intend
18
not to defend. The Parent and the Purchaser agree that the Seller shall be
entitled to assume and control the defense of any such claim through
counsel of its choice, reasonably acceptable to Parent and Purchaser, and
that, in the event the Seller undertakes any such defense, the Parent and
the Purchaser shall, and shall cause the Publishing Subsidiaries to,
cooperate with the Seller in such defense (or, if related to the claim in
question, in making a counterclaim or any cross-complaint) and make
available to the Seller all witnesses, records materials and information
in the possession or under the control of the Parent, the Purchaser or any
of the Publishing Subsidiaries as is reasonably requested by the Seller.
SECTION 6.10. Business Employee. Notwithstanding any other
provision of this Agreement to the contrary, including any Schedules or
Exhibits attached hereto, each of the parties hereto agrees that Xxxxxxxx
Xxxxxxx shall not be considered a Business Employee or Former Business
Employee for purposes of this Agreement."
(xx) Section 7.07 is hereby amended by adding at the end of such Section
the following sentence:
"The party responsible under local law for filing the Tax Return
with respect to each such Tax shall file such return, pay such Tax and
notify the other party of the amount of such Tax, and the other party
shall promptly pay to such party 50% of the amount of such Tax."
(yy) Section 7.09 is hereby amended by adding at the end of such Section
the following phrase:
"or, at the Parent or the Purchaser's request, a certificate that
one or more of the Publishing Subsidiaries being sold pursuant to this
Agreement and identified in such request is not a "United States real
property holding company" within the meaning of Section 897 of the Code."
(zz) Section 7.10(b) is hereby amended by inserting "(i)" immediately
following the phrase "except for" and by inserting "and (ii) the indemnity
contained in Section 10.01(a)(iv) of this Agreement" immediately following the
phrase "Section 3.14 of this Agreement".
(aaa) Section 7.10(d) is hereby amended by adding at the end of such
Section the following sentence:
"Notwithstanding the preceding sentence, any foreign Publishing
Subsidiary that receives any proceeds pursuant to Section 2.01(a) shall
distribute such proceeds as provided in Section 2.01(a), and Xxxxxxxx-Xxxx
Hispanoamericana, S.A. will, at and in accordance with the request of
Parent or Purchaser, if agreed to by Seller, distribute
19
before the Closing an amount reflecting its "CUFIN" account, as determined
for Mexican tax law purposes."
(bbb) Section 10.01(a) is hereby amended by deleting the word "or" at the
end of paragraph (ii), by inserting the text"; or" at the end of paragraph (iii)
and by inserting the following text immediately thereafter:
"(iv) any claim or cause of action against any Seller Indemnified
Party or as to which any Seller Indemnified Party is otherwise involved
(through discovery, as a witness or otherwise) by or through Xxxxx Muse or
any of its Affiliates relating to or arising out of (A) the assignment
contemplated by Section 11.08(b)(i) or (B) the direct sale to Xxxxx Muse
or any of its Affiliates of any Directly Acquired B&P and Reference
Publishing Subsidiaries, the business or operations of the B&P and
Reference Publishing Businesses, this Agreement or the transactions
contemplated hereby or any assignment to Xxxxx Muse or any of its
Affiliates contemplated by Section 11.08(b)(ii) of this Agreement, other
than any claim or cause of action by or through Xxxxx Muse or any of its
Affiliates with respect to the Ancillary Agreements to which any of them
may be a party or to the transactions contemplated thereby; provided that
nothing contained in this clause (iv) shall preclude the Parent or
Purchaser from asserting any claim against any Seller Indemnified Party,
to the extent otherwise permitted by and subject to the applicable terms
and conditions of this Agreement, with respect to the Directly Acquired
B&P and Reference Publishing Subsidiaries, the business or operations of
the B&P and Reference Publishing Business, this Agreement or the
transactions contemplated hereby."
(ccc) Section 11.08 is hereby amended by deleting subsection (b) thereof
in its entirety and substituting the following phrase therefor:
"each of the Parent and the Purchaser may assign any or all of its
rights and obligations under this Agreement (but with respect to clauses
(i) and (ii) below, Parent and Purchaser may only assign the right to
purchase the Shares of the Directly Acquired B&P and Reference Publishing
Subsidiaries and the covenant not to compete set forth in Section 5.12(c)
hereof) (i) in connection with the sale by the Parent or the Purchaser or
any wholly-owned Subsidiary of the Parent or the Purchaser, as the case
may be, to Hicks, Muse, Xxxx and Xxxxx Incorporated (and/or any Affiliate
thereof) of certain Sold Property; provided that Hicks, Muse, Xxxx and
Xxxxx Incorporated shall execute, and the effectiveness of such assignment
shall be conditional upon such execution, the form of Acknowledgment and
Covenant Not to Xxx attached hereto as Exhibit 11.08(b)(i), (ii) if Parent
makes the election pursuant to Section 2.01(b) of this Agreement, to
Hicks, Muse, Xxxx and Xxxxx Incorporated (and/or any Affiliate thereof);
provided that Hicks, Muse, Xxxx and Xxxxx Incorporated shall execute, and
the effectiveness of such assignment shall be conditional upon such
execution, the form of Acknowledgment and Covenant Not to Xxx attached
hereto as Exhibit 11.08(b)(ii) and (iii) to any Subsidiary of the Parent;
20
provided that no such assignment pursuant to clauses (i), (ii) and (iii)
of this Section 11.08(b) shall release the Parent or the Purchaser from
any liability hereunder or delay the consummation of the purchase and sale
of the Sold Properties hereunder; provided, further, that no assignment
shall be permitted by this sentence that would result in the sale by the
Seller or the Seller's Subsidiaries at the Closing of any assets or Shares
to any party other than the Parent, any wholly-owned Subsidiary of the
Parent or the Purchaser, or Xxxxx Muse, Xxxx and Xxxxx Incorporated
(and/or any Affiliate thereof)"
(ddd) Schedule A is hereby added to the Stock Purchase Agreement in the
form attached to this Amendment.
(eee) Schedule 2 of the Stock Purchase Agreement is hereby deleted in its
entirety and replaced with the Schedule 2 attached to this Amendment.
(fff) Schedule 2A of the Stock Purchase Agreement is hereby deleted in its
entirety and replaced with the Schedule 2A attached to this Amendment.
(ggg) Schedule 3 of the Stock Purchase Agreement is hereby modified by
deleting the following subsidiaries from the list captioned "Inactive
Domestic"and adding them to the list captioned "Domestic":
"Arco Publishing, Inc., Executive Reports Corporation, Executive Tax
Reports, Inc. and Xxxxxx X. Xxxxx Co.".
(hhh) Schedule 5 is hereby added to the Stock Purchase Agreement in the
form attached to this Amendment.
(iii) Schedule 6 is hereby added to the Stock Purchase Agreement in the
form attached to this Amendment.
(jjj) Schedule 7 is hereby added to the Stock Purchase Agreement in the
form attached to this Amendment.
(kkk) Schedule 8 is hereby added to the Stock Purchase Agreement in the
form attached to this Amendment.
(lll) Exhibit 1.01(a) of the Stock Purchase Agreement is hereby deleted in
its entirety and replaced with the Exhibit 1.01(a) attached to this Amendment.
(mmm) Exhibit 1.01(b) of the Stock Purchase Agreement is hereby deleted in
its entirety and replaced with the Exhibit 1.01(b) attached to this Amendment.
21
(nnn) Exhibit 1.01(c) of the Stock Purchase Agreement is hereby deleted in
its entirety and replaced with the Exhibit 1.01(c) attached to this Amendment.
(ooo) Exhibit 1.01(d) is hereby added to the Stock Purchase Agreement in
the form attached to this Amendment.
(ppp) Exhibit 1.01(e) is hereby added to the Stock Purchase Agreement in
the form attached to this Amendment.
(qqq) Exhibit 11.08(b)(i) is hereby added to the Stock Purchase Agreement
in the form attached to this Amendment.
(rrr) Exhibit 11.08(b)(ii) is hereby added to the Stock Purchase Agreement
in the form attached to this Amendment.
(sss) Section 5.07 of the Disclosure Schedule is hereby amended to delete
the Standby Letters of Credit listed in items (i) and (ii) thereto.
SECTION 2. Representations and Warranties; Indemnity. (a) The Parent
and the Purchaser each agree and acknowledge that the Seller shall have no
liability as a result of the inaccuracy of any representations and warranties
made by the Seller in the Stock Purchase Agreement if such representations and
warranties were accurate when made and in light of the form of transaction
contemplated by the Stock Purchase Agreement prior to this Amendment but are
inaccurate as of the Closing Date as a result of the direct sale of any
additional Publishing Subsidiaries pursuant to this Amendment, the Restructuring
or the Xxxxx Muse Transfer. In addition, the Parent and the Purchaser each agree
and acknowledge that the inaccuracy of any representations and warranties
arising under the circumstances set forth in the preceding sentence shall not
(i) relieve the Parent and the Purchaser from their respective obligations to
consummate the transactions contemplated by the Stock Purchase Agreement, as
amended by this Amendment, pursuant to Section 8.02(a) thereof or (ii) give the
Parent the right to terminate the Stock Purchase Agreement, as amended by this
Amendment, prior to Closing pursuant to Section 9.01(d) thereof.
(b) The Parent and the Purchaser agree, jointly and severally, to
indemnify and hold harmless the Seller Indemnified Parties for any Losses that
any Seller Indemnified Party may at any time suffer or incur, or become subject
to, as a result of any claim or cause of action by any third party against any
Seller Indemnified Party for any matter that is the subject of a representation
or warranty made by the Seller in the Stock Purchase Agreement if such
representation or warranty was accurate when made and in light of the form of
transaction contemplated by the Stock Purchase Agreement prior to this Amendment
but is inaccurate as of the Closing Date as a result of the direct sale of any
additional Publishing Subsidiaries pursuant
22
to this Amendment, the Restructuring or the Xxxxx Muse Transfer, including,
without limitation, any losses related to or arising under that certain
Macmillan Trademark Sharing Agreement.
SECTION 3. No Contractual Relationship with Xxxxx Muse. The Parent
and the Purchaser each acknowledge and agree neither (i) the agreement by the
Seller to transfer and deliver the Shares of the Directly Acquired B&P and
Reference Publishing Subsidiaries to Xxxxx Muse pursuant to Section 2.01(a) of
the Stock Purchase Agreement, if the Parent so elects pursuant to Section
2.01(b) of the Stock Purchase Agreement, in each case as amended by this
Amendment nor (ii) any assignment by the Parent and the Purchaser permitted by
Section 11.08(b)(i) of any or all of its rights and obligations under this
Agreement in connection with the sale by the Parent or the Purchaser or any
wholly owned Subsidiary of the Parent or the Purchaser, as the case may be, to
Hicks, Muse, Xxxx and Xxxxx Incorporated, or any Affiliate thereof, of certain
Sold Property, is intended to create, and does not in any way create, a
contractual relationship between the Seller or any of its Affiliates on the one
hand and Xxxxx Muse, or any Affiliates thereof, on the other, except as
otherwise provided in any of the Ancillary Agreements.
SECTION 4. Effect of Amendments. Except as and to the extent
expressly modified by this Amendment, the Stock Purchase Agreement shall remain
in full force and effect in all respects.
SECTION 5. Acknowledgment and Covenant Not to Xxx. (a) If Parent
makes the election pursuant to Section 2.01(b) of the Stock Purchase Agreement,
as amended by this Amendment, each of Seller, Parent, Purchaser and Xxxxx Muse,
simultaneously with the execution hereof, shall execute and deliver to the other
the Acknowledgment and Covenant Not to Xxx attached as Exhibit 11.08(b)(ii).
(b) Seller, Parent and Purchaser acknowledge and agree that in the
event of any sale of Sold Property following the Closing contemplated by Section
11.08(b)(i), Seller, Parent, Purchaser and Xxxxx Muse shall execute and deliver
to the other the Acknowledgment and Covenant Not to Xxx attached
as Exhibit 11.08(b)(i).
SECTION 6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the Laws of the State of New York, and, for
greater certainty, the provisions set forth in Section 11.12 of the Stock
Purchase Agreement are incorporated herein by reference and made a part hereof.
SECTION 7. Counterparts. This Amendment may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this
23
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed as of the date first written above by its respective
officer thereunto duly authorized.
VIACOM INTERNATIONAL INC.
By
-----------------------------
XXXXXXX INC.
By
-----------------------------
XXXXXXX PLC
By
-----------------------------
