Agfa-Gevaert on disputes with AgfaPhoto Holding and AgfaPhoto employees

The German and international press have published varying reports on legal disputes in connection with the divestiture of Agfa-Gevaert’s Consumer Imaging business and the insolvency and dissolution of the independent company AgfaPhoto GmbH and its subsidiaries. Agfa-Gevaert has meritorious positions in current lawsuits and disputes and will prosecute its claims vigorously. Agfa-Gevaert respects confidentiality and will limit its comments on the proceedings accordingly.

Agfa-Gevaert has made relevant disclosures in its annual report on the potential risks associated with the divestiture of the Consumer Imaging business and the insolvency of AgfaPhoto GmbH and its subsidiaries. There have been no adverse developments since the publication of the annual report.

The reported legal disputes with AgfaPhoto Holding concern the use of the AgfaPhoto trademark by AgfaPhoto Holding and the amount of the purchase price for the Consumer Imaging business. Agfa-Gevaert has terminated the trademark license agreement with AgfaPhoto Holding GmbH and its wholly-owned subsidiaries in October 2005 and initiated arbitration proceedings to enforce its rights in this regard. The purchase price, which was determined on the basis of fully audited closing financial statements, is subject to a contractually agreed accounting adjustment procedure, which has recently commenced.

There have been published reports with statements attributed to counsel to the purchaser of the Consumer Imaging Business suggesting that information provided to the purchaser was inadequate or misleading. This suggestion, if accurately reported, is false, and none of the current lawsuits and disputes involve such a claim.

After AgfaPhoto’s insolvency, a number of AgfaPhoto employees has also filed claims against Agfa-Gevaert. Agfa-Gevaert is convinced that all employees were provided with correct and complete information upon their transfer to AgfaPhoto and Agfa-Gevaert has acted strictly in accordance with the requirements of applicable labor laws.