EXHIBIT 7(j)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LIBERTY MEDIA CORPORATION,
LIBERTY TVGIA, INC.,
THE NEWS CORPORATION LIMITED
and
NEWS PUBLISHING AUSTRALIA LIMITED
Dated as of November 27, 2001
TABLE OF CONTENTS
Page
Article I DEFINITIONS .................................................... 1
Section 1.1 Definitions ......................................... 1
Section 1.2 Terms ............................................... 9
Article II THE MERGER .................................................... 10
Section 2.1 The Merger .......................................... 10
Section 2.2 Effective Time of the Merger ........................ 10
Section 2.3 Closing ............................................. 10
Section 2.4 Effects of the Merger ............................... 10
Section 2.5 Certificate of Incorporation and By-Laws. ........... 10
Section 2.6 Directors ........................................... 11
Section 2.7 Officers ............................................ 11
Section 2.8 Role of NPAL ........................................ 11
Section 2.9 Tax Effect .......................................... 11
Article III CONVERSION OF SHARES ......................................... 11
Section 3.1 Conversion of Capital Stock ......................... 11
Section 3.2 Exchange of Certificates ............................ 14
Article IV REPRESENTATIONS AND WARRANTIES OF LMC AND LTVGIA .............. 15
Section 4.1 Organization and Qualifications ..................... 15
Section 4.2 Capitalization; No Liens. ........................... 15
Section 4.3 Authority Relative to This Agreement. ............... 16
Section 4.4 No Conflict; Required Filings and Consents. ......... 16
Section 4.5 Gemstar Shares are LTVGIA's Sole Asset; No LTVGIA
Liabilities ......................................... 17
Section 4.6 Litigation .......................................... 17
Section 4.7 Tax Matters. ........................................ 17
Section 4.8 Brokers ............................................. 18
Article V REPRESENTATIONS AND WARRANTIES OF TNCL ......................... 18
Section 5.1 Organization and Qualifications. .................... 18
Section 5.2 Validity of ADSs and TNCL Shares .................... 18
Section 5.3 Authority Relative to This Agreement. ............... 19
Section 5.4 No Conflict; Required Filings and Consents. ......... 20
Section 5.5 Absence of Certain Changes or Events ................ 21
Section 5.6 Litigation .......................................... 21
Section 5.7 Capitalization ...................................... 21
Section 5.8 Brokers ............................................. 21
Section 5.9 NPAL ................................................ 21
Section 5.10 Foreign Private Issuer .............................. 21
Section 5.11 Disclosure .......................................... 21
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Article VI CONDUCT PENDING THE MERGER .................................... 22
Section 6.1 Prohibited Actions ................................ 22
Section 6.2 TNCL Covenants .................................... 23
Article VII ADDITIONAL COVENANTS ......................................... 23
Section 7.1 Approvals ......................................... 23
Section 7.2 Access to Information ............................. 24
Section 7.3 Further Action .................................... 24
Section 7.4 Public Announcements .............................. 24
Section 7.5 Notification of Certain Matters. .................. 24
Section 7.6 Certain Tax Matters. .............................. 25
Section 7.7 Australian Treasury Matters ....................... 29
Article VIII CONDITIONS TO THE MERGER .................................... 29
Section 8.1 Conditions to Each Party's Obligation to Effect
the Merger ........................................ 29
Section 8.2 Conditions to Obligations of LMC and LTVGIA to
Effect the Merger. ................................ 29
Section 8.3 Conditions to Obligations of TNCL and NPAL to
Effect the Merger. ................................ 31
Article IX TERMINATION, WAIVER, AMENDMENT ................................ 32
Section 9.1 Termination by Mutual Consent ..................... 32
Section 9.2 Termination by either TNCL or LMC ................. 32
Section 9.3 Termination by TNCL ............................... 32
Section 9.4 Termination by LMC ............................... 33
Section 9.5 Effect of Termination and Abandonment ............. 33
Article X INDEMNIFICATION ................................................ 33
Section 10.1 General Indemnification ........................... 33
Section 10.2 Third Party Action Indemnification Procedures ..... 34
Section 10.3 Benefits of Indemnification ....................... 35
Section 10.4 Non-Exclusive Remedy .............................. 35
Section 10.5 Tax Effects of Indemnification. ................... 35
Article XI MISCELLANEOUS ................................................. 36
Section 11.1 Survival of Representations and Warranties ........ 36
Section 11.2 Expenses .......................................... 36
Section 11.3 Counterparts ...................................... 36
Section 11.4 Governing Law; Waiver of Jury Trial. .............. 36
Section 11.5 Specific Performance .............................. 37
Section 11.6 Notices ........................................... 37
Section 11.7 Entire Agreement .................................. 38
Section 11.8 No Third Party Beneficiaries ...................... 38
Section 11.9 Binding Effect; Assignment ........................ 38
Section 11.10 Headings .......................................... 38
Section 11.11 Severability ...................................... 38
Section 11.12 Further Assurances ................................ 39
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EXHIBITS:
A - Certificate of Merger
B - Amended Registration Rights Agreement
C - Tax Certificate
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 27, 2001, by and
among LIBERTY MEDIA CORPORATION, a Delaware corporation ("LMC"), LIBERTY TVGIA,
INC., a Delaware corporation ("LTVGIA"), THE NEWS CORPORATION LIMITED (XXX 000
000 000), x Xxxxx Xxxxxxxxx corporation ("TNCL"), and NEWS PUBLISHING AUSTRALIA
LIMITED, a Delaware corporation ("NPAL").
RECITALS
WHEREAS, TNCL and LMC are parties to the September Letter Agreement,
pursuant to which, among other things, the parties agreed that Sky Global
Networks, Inc. ("SGN") would acquire the Gemstar Shares held by LTVGIA pursuant
to a tax-free merger; provided, that in the event that a Qualified SGN IPO (as
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defined in the September Letter Agreement) did not occur by the date specified
therein (the "Outside Date"), then LMC and SGN would be under no obligation to
consummate the SGN/LTVGIA Transaction (as defined in the September Letter
Agreement) and would instead consummate the transactions contemplated hereby
pursuant to which NPAL will acquire all of the Gemstar Shares held by LTVGIA, in
exchange for American Depositary Shares representing TNCL Shares; and
WHEREAS, the parties acknowledge that the Qualified SGN IPO will not
occur prior to the Outside Date and, thus, it is the intention of the parties
that NPAL shall acquire the Gemstar Shares pursuant to this Agreement in a
tax-free merger of LTVGIA with and into NPAL (the "Merger") on the terms and
conditions contained herein and in accordance with the Delaware General
Corporation Law (the "DGCL") with the separate existence of LTVGIA ceasing and
with NPAL surviving and continuing as a subsidiary of TNCL; and
WHEREAS, the Boards of Directors of TNCL, NPAL, LMC and LTVGIA have
determined that the transactions contemplated by this Agreement including,
without limitation, the Merger, are advisable and in the best interests of their
respective corporations and stockholders, and such Boards of Directors have
approved this Agreement;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1 Definitions. The following words and expressions have
the meanings set forth below:
Additional ADSs: as defined in Section 3.1(c)(ii) hereof.
Additional Merger Consideration: as defined in Section 3.1(a) hereof.
Adjustment: the deemed increase in a Tax, determined
on a transaction-by-transaction basis and
using the assumptions set forth in the
next sentence, resulting from an
adjustment made with respect to any
amount reflected or required to be
reflected on any Return relating to such
Tax. For purposes of determining such
deemed increase in Tax, the following
assumptions will be used: (a) in the case
of any Income Tax, the highest marginal
Tax rate or, in the case of any other
Tax, the highest applicable Tax rate, in
each case in effect with respect to that
Tax for the Taxable period or any portion
of the Taxable period to which the
adjustment relates; and (b) such
determination shall be made without
regard to whether any actual increase in
such Tax will in fact be realized with
respect to the Return to which such
adjustment relates (as a result, for
example, of losses, credits or other
offsets against Tax).
ADRs: American Depositary Receipts issued under
the terms of the Deposit Agreement to
evidence ADSs.
ADSs: American Depositary Shares, each
representing four (4) TNCL Shares as of
the date hereof.
Affiliate: with respect to any Person, any other
Person, directly or indirectly,
Controlling, Controlled by or under
common Control with such first Person.
Agreement: this Agreement and Plan of Merger,
including all Schedules and Exhibits
hereto.
Amended Registration Rights
Agreement: as defined in Section 3.1(b)(ii) hereof.
Applicable Law: any foreign, United States Federal, state
or local law, statute, ordinance, rule,
regulation, order, writ, injunction,
judgment, decree, arbitration award,
license, permit or agency requirement of
any Governmental Entity.
ASIC: the Australian Securities and Investment
Commission.
ASX: the Australian Stock Exchange.
Australia: the Commonwealth of Australia.
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Authorized Agent: as defined in Section 11.4(a) hereof.
Business Day: any day other than a Saturday, a Sunday
or a day on which banking institutions in
Denver, Colorado, or New York, New York
are authorized or obligated by law or
executive order to close.
CBCA: as defined in the recitals hereto.
Capital Stock: any and all shares, interests,
participations, or other equivalents
(however designated) of corporate stock.
Certificate of Merger: as defined in Section 2.2 hereof.
Change in Tax Law: as defined in Section 7.6(k) hereof.
Claims: as defined in Section 10.1(a) hereof.
Closing: as defined in Section 2.3 hereof.
Closing Date: the date on which the Merger is
consummated.
Closing Price: of any security for any day, the last
reported sale price of such security
regular way or, in case no such reported
sale takes place on such day, the average
of the reported closing bid and asked
prices regular way, in either case on the
composite tape, or if such security is
not quoted on the composite tape, on the
principal United States securities
exchange registered under the Exchange
Act on which such security is listed or
admitted to trading, or if such security
is not listed or admitted to trading on
any such exchange, the last reported sale
price (or the average of the quoted
closing bid and asked prices if there
were no reported sales) on The Nasdaq
Stock Market or any comparable quotation
system, or if such security is not quoted
on The Nasdaq Stock Market or any
comparable system, the average of the
closing bid and asked prices as furnished
by any member of the National Association
of Securities Dealers, Inc. selected from
time to time by TNCL for that purpose or,
in the absence of such quotations, such
other method of determining market value
as the Board of Directors shall from time
to time deem, in good faith, to be fair.
Code: the U.S. Internal Revenue Code of 1986,
as amended.
Contractual Obligations: as defined in Section 4.4(a) hereof.
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Control: the power, directly or indirectly, to
direct or cause the direction of the
management and policies of a Person,
whether by the ownership of voting
securities, by contract or otherwise.
Controlled Affiliate: with respect to any Person, an Affiliate
of such Person which such Person
Controls.
Controlled Affiliate Acquirer: as defined in Section 3.1(a) hereof.
Controlled Affiliate Acquirer Notice: as defined in Section 3.1(a) hereof.
Corporations Act: The Corporations Act (Commonwealth of
Xxxxxxxxx), 0000.
Custodian: Citicorp Nominees Pty Limited.
Deposit Agreement: the Amended and Restated Deposit
Agreement, dated as of December 3, 1996,
among TNCL, the Depositary and the
holders from time to time of ADRs.
Depositary: Citibank, N.A., as the depositary
pursuant to the Deposit Agreement.
DGCL: as defined in the recitals hereto.
Effective Time: as defined in Section 2.2 hereof.
Exchange Act: as defined in Section 5.10 hereof.
Ex-Dividend Date: the date on which "ex-dividend" trading
commences for a Qualifying Dividend to
which Section 3.1(c)(ii) applies in the
over-the-counter market or the principal
exchange located in the United States on
which the ADSs are then quoted or listed.
FATA: as defined in Section 8.2(d) hereof.
Final Determination: the final resolution of liability for any
Tax for a taxable period (A) by IRS Form
870 or 870-AD (or any successor forms
thereto), on the date of acceptance by or
on behalf of the taxpayer, or by a
comparable form under the laws of other
jurisdictions; except that a Form 870 or
870-A or comparable form that reserves
(whether by its terms or by operation of
law) the right of the taxpayer to file a
claim for refund and/or the right of the
taxing authority to assert a further
deficiency shall not constitute a Final
Determination; (B) by a
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decision, judgment, decree or other order
by a court of competent jurisdiction,
which has become final and nonappealable;
(C) by a closing agreement or accepted
offer in compromise under Section 7121 or
7122 of the Code, or comparable
agreements under the laws of other
jurisdictions; (D) by any allowance of a
refund or credit in respect of an
overpayment of Tax, but only after the
expiration of all periods during which
such refund may be recovered (including
by way of offset) by the taxing
jurisdiction; (E) by any other final
disposition, including by reasons of the
expiration of the applicable statute of
limitations or by mutual agreement of the
parties.
GAAP: U.S. generally accepted accounting
principles.
Gemstar: Gemstar-TV Guide International, Inc., a
Delaware corporation (formerly known as
Gemstar International Group Limited).
Gemstar Rights Plan: the Second Amended and Restated Rights
Agreement, effective as of July 12, 2000,
by and between Gemstar and American Stock
Transfer and Trust Company, as rights
agent, including the Rights Certificates
that may be issued pursuant thereto.
Gemstar Side Letter: as defined in Section 6.1(d) hereof.
Gemstar Shares: the 16,761,150 shares of Gemstar Stock
held by LTVGIA as of the date hereof, as
adjusted as provided herein.
Gemstar Stock: the Common Stock, par value $.01 per
share, of Gemstar.
Gemstar Stockholders' Agreement: the Stockholders' Agreement, dated as of
October 4, 1999, by and among TNCL, LMC,
Xxxxx X. Xxxx and Gemstar.
Governmental Consent: as defined in Section 4.4(b) hereof.
Governmental Entity: as defined in Section 4.4(b) hereof.
Governmental Filing: as defined in Section 4.4(b) hereof.
HSR Act: as defined in Section 4.4(b) hereof.
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Income Tax: any federal, state, local or foreign
income tax, including any interest,
penalty, or addition thereto.
Indemnified LMC Person: as defined in Section 10.1(a) hereof.
Indemnified Person: as defined in Section 10.2(a) hereof.
Indemnified TNCL Person: as defined in Section 10.1(b) hereof.
Indemnifying Person: as defined in Section 10.2(a) hereof.
Indemnity Payment: as defined in Section 10.5(b) hereof.
Legal Proceedings: as defined in Section 4.6 hereof.
Lien: any security interest, lien, claim,
pledge, charge or other encumbrance of
any nature whatsoever.
LMC: Liberty Media Corporation, a Delaware
corporation.
LMC Excluded Jurisdictions: as defined in Section 4.4(a) hereof.
LMC Material Adverse Effect as defined in Section 8.2(l) hereof.
Losses: as defined in Section 10.1(a) hereof.
LTVGIA: as defined in the preamble hereto.
LTVGIA Certificates: as defined in Section 3.1(a) hereof.
LTVGIA Material Adverse Effect: as defined in Section 4.1 hereof.
LTVGIA Merger Consideration: as defined in Section 3.1(a) hereof.
LTVGIA Shares: as defined in Section 3.1(a) hereof.
Measurement Period: as defined in Section 3.1(c)(ii) hereof.
Merger: as defined in the recitals hereto.
Merger Consideration: as defined in Section 3.1(a) hereof.
Merger Filing: as defined in Section 2.2 hereof.
Non-Return Taxes: as defined in Section 7.6(d)(ii) hereof.
NPAL: as defined in the preamble hereto.
NPAL/LUVSG Merger Agreement: the Agreement and Plan of Merger, dated
as of May 2, 2001, by and among TNCL,
NPAL, LMC and Liberty
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UVSG, Inc.
NYSE: as defined in Section 5.2 hereof.
Outside Date: as defined in the recitals hereto.
Overpayment Rate: as defined in Section 7.6(h) hereof.
Payment Date: as defined in Section 3.1(c)(ii) hereof.
Person: any natural person or a partnership,
corporation or trust, unincorporated
organization, association, limited
liability company or other entity.
Pre-Closing Consolidated Returns: as defined in Section 7.6(d)(i) hereof.
Pre-Closing Non-Consolidated Returns: as defined in Section 7.6(d)(ii) hereof.
Qualifying Dividend: as defined in Section 3.1(c)(ii) hereof.
Representatives: as defined in Section 7.2 hereof.
Restricted Securities Letter
Agreement: as defined in Section 5.2 hereof.
Restrictions: with respect to any capital stock,
partnership interest, membership interest
in a limited liability company or other
security, any voting or other trust or
agreement, option, warrant, preemptive
right, right of first offer, right of
first refusal, escrow arrangement, proxy,
buy-sell agreement, power of attorney or
other contract, any law, rule,
regulation, order, judgment or decree
which, conditionally or unconditionally,
(i) grants to any Person the right to
purchase or otherwise acquire, or
obligates any Person to sell or otherwise
dispose of or issue, or otherwise results
or, whether upon the occurrence of any
event or with notice or lapse of time or
both or otherwise, may result in any
person acquiring, (A) any of such capital
stock or other security; (B) any of the
proceeds of, or any distributions paid or
which are or may become payable with
respect to, any of such capital stock or
other security; or (C) any interest in
such capital stock or other security or
any such proceeds or distributions; (ii)
restricts or, whether upon the occurrence
of any event or with notice or lapse of
time or both or otherwise, is reasonably
likely to restrict the transfer or voting
of, or the exercise of any rights or the
enjoyment of any
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benefits arising by reason of ownership
of, any such capital stock or other
security or any such proceeds or
distributions; or (iii) creates or,
whether upon the occurrence of any event
or with notice or lapse of time or both
or otherwise, is reasonably likely to
create a Lien or purported Lien affecting
such capital stock or other security,
proceeds or distributions.
Return: any return, report, form or similar
statement or document (including, without
limitation, any related or supporting
information or schedule attached thereto
and any information return, claim for
refund, amended return and declaration of
estimated tax) that has been or is
required to be filed with or furnished to
any Governmental Entity with respect to
the determination, assessment or
collection of any Taxes or the
administration of any laws, regulations
or administrative requirements relating
to Taxes.
SEC: the U.S. Securities and Exchange
Commission.
Securities Act: the U.S. Securities Act of 1933, as
amended.
Selling Affiliated Group: as defined in Section 7.6(d)(i) hereof.
September Letter Agreement: the letter agreement,
dated September 27, 2000, by and between
TNCL and Liberty, including the Summary
of Proposed Terms attached thereto, as
supplemented by the letter agreement,
dated as of February 6, 2001, by and
among TNCL, SESLA, Inc., LMC, Liberty
Satellite, LLC and Liberty Multi-Country
DTH, Inc.
Settlement Agreements: as defined in Section 7.6(c) hereof.
SGN: as defined in the recitals hereto.
Subsidiary: with respect to any Person, an entity in
which such Person, directly or
indirectly, through one or more
Subsidiaries, owns a majority (a) of the
voting power of the issued and
outstanding shares of capital stock or
other ownership interests in such entity
entitled to vote generally in the
election or appointment of directors or
members of the governing body of such
entity or (b) of the ownership interests
in such entity.
Surviving Corporation: as defined in Section 2.1 hereof.
Tax: any income, corporation, gross receipts,
profits, gains, capital stock, capital
duty, franchise, business, license,
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payroll, withholding, social security,
unemployment, disability, property,
wealth, welfare, stamp, environmental,
transfer, excise, occupation, sales, use,
value added, alternative minimum,
estimated or other similar tax (including
any fee, assessment or other charge in
the nature of any tax) imposed by any
governmental authority (whether national,
federal, state, local, municipal, foreign
or otherwise) or political subdivision
thereof, and any interest, penalties,
additions to tax or additional amounts in
respect of the foregoing.
Tax Certificate: as defined in Section 7.6(j) hereof.
Third-Party Action: as defined in Section 10.2(a) hereof.
TNCL: as defined in the preamble hereto.
TNCL Adjustment Transaction as defined in Section 3.1(c)(i) hereof.
TNCL Excluded Jurisdictions: as defined in Section 5.4(a) hereof.
TNCL Material Adverse Effect: as defined in Section 5.1 hereof.
TNCL Shares: Preferred Limited Voting Ordinary Shares
of TNCL.
TNCL Registration Rights Agreement: as defined in Section 3.1(b)(ii) hereof.
TNCL Subsidiaries: as defined in Section 5.1 hereof.
Transferred Corporation: shall have the meaning given to such term
in Treasury Regulationss. (S)1.367(a)-
3(d)(2)(ii).
Treasurer Letter: as defined in Section 8.2(e) hereof.
Treasury Regulations the regulations promulgated
under the Code in effect on the date
hereof and the corresponding sections of
any regulations subsequently issued that
amend or supersede such regulations.
20-F: as defined in Section 5.11 hereof.
U.S.: the United States of America.
Section 1.2 Terms. Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. All pronouns (and any variation) will be deemed to
refer to the masculine, feminine or neuter, as the
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identity of the Person may require. The singular or plural includes the other,
as the context requires or permits. The word "include" (and any variation) is
used in an illustrative sense rather than a limiting sense. The words "hereof,"
"herein," "hereunder" and comparable terms refer to the entirety of this
Agreement and not to any particular article, section or other subdivision hereof
or attachment hereto. References to any statute or regulation are to it as
amended and supplemented from time to time, and to any corresponding provisions
of successor statutes or regulations. References to "Article," "Section" or
another subdivision or to an "Exhibit" or "Schedule" are to an article, section
or subdivision hereof or to an exhibit or schedule hereto. All references to the
"the date hereof," "the date of this Agreement" or similar terms (but excluding
references to the date of execution hereof) refer to the date first above
written, notwithstanding that the parties may have executed this Agreement on a
later date. The word day without the qualification "Business" means a calendar
day. If any action or notice is to be taken or given on or by a particular
calendar day, and such calendar day is not a Business Day, then such action or
notice may be taken or given on the next succeeding Business Day.
ARTICLE II
THE MERGER
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Section 2.1 The Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time, in accordance with the DGCL, LTVGIA shall
be merged with and into NPAL in accordance with this Agreement, and the separate
existence of LTVGIA shall cease. NPAL shall be the surviving corporation in the
Merger (hereinafter sometimes referred to as the "Surviving Corporation").
Section 2.2 Effective Time of the Merger. Upon the terms and subject to
the conditions of this Agreement, a certificate of merger in the form of Exhibit
A hereto (the "Certificate of Merger") shall be duly prepared, executed and
acknowledged by the Surviving Corporation and thereafter delivered to the
Secretary of State of the State of Delaware for filing on the Closing Date. The
Merger shall become effective as of the date and at such time as the Certificate
of Merger has been duly filed (the "Merger Filing") with the Secretary of State
of the State of Delaware (the time the Merger becomes effective pursuant to the
DGCL being referred to herein as the "Effective Time").
Section 2.3 Closing. Subject to the satisfaction or waiver of all of the
conditions to the Closing contained in Article VIII hereof, the closing of the
Merger (the "Closing") will take place at 10:00 a.m., New York City time, on
December 3, 2001, at the offices of Squadron Ellenoff Plesent & Xxxxxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date or place is
agreed to in writing by the parties hereto.
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of LTVGIA shall vest in
the Surviving Corporation, and all debts, liabilities and duties of LTVGIA shall
become the debts, liabilities and duties of the Surviving Corporation.
Section 2.5 Certificate of Incorporation and By-Laws.
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(a) The Certificate of Incorporation of NPAL as in effect
immediately prior to the Effective Time shall remain the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with the
terms thereof and with applicable law.
(b) The By-Laws of NPAL in effect at the Effective Time shall
remain the By-Laws of the Surviving Corporation until amended in accordance with
the terms thereof and with applicable law.
Section 2.6 Directors. The directors of NPAL at the Effective Time shall
remain the directors of the Surviving Corporation, each to hold office from the
Effective Time in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation and until his or her successor is duly elected and
qualified.
Section 2.7 Officers. The officers of NPAL at the Effective Time shall
remain the officers of the Surviving Corporation, each to hold office from the
Effective Time in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation and until his or her successor is duly appointed
and qualified.
Section 2.8 Role of NPAL. TNCL and NPAL acknowledge that NPAL has entered
into this Agreement and will perform the transactions required of it by this
Agreement at the direction of TNCL, to assist TNCL in meeting its obligations
under the September Letter Agreement.
Section 2.9 Tax Effect. The parties intend that the Merger shall qualify
as a tax-free reorganization under Section 368(a) of the Code.
ARTICLE III
CONVERSION OF SHARES
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Section 3.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
outstanding shares of Capital Stock of LTVGIA or of the holder of any shares of
Capital Stock of NPAL:
(a) Consideration for LTVGIA Shares. The issued and outstanding
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shares of Capital Stock of LTVGIA (the "LTVGIA Shares") shall be converted into
(i) 1.7179 ADSs for each Gemstar Share held by LTVGIA, for a total of 28,793,980
ADSs (such ADSs, the "LTVGIA Merger Consideration") representing 115,175,920
fully paid and nonassessable TNCL Shares and (ii) that number of ADSs (rounded
to the nearest ADS) (such ADSs, the "Additional Merger Consideration," and
together with the LTVGIA Merger Consideration, the "Merger Consideration")
issuable pursuant to Section 3.1(c)(ii) hereof. The Merger Consideration shall
be issued on the Closing Date to LMC and/or one or more Controlled Affiliates of
LMC (each such Controlled Affiliate of LMC, a "Controlled Affiliate Acquirer")
specified in writing (a "Controlled Affiliate Acquirer Notice") by LMC to TNCL a
reasonable period prior to the Closing, but in no event less than three Business
Days prior to the Closing, with the amount of the Merger Consideration to be
issued to LMC and/or each such Controlled Affiliate Acquirer to be as specified
in the Controlled Affiliate Acquirer Notice (subject to the adjustments provided
herein).
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The LTVGIA Shares, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate that, immediately prior to the Effective Time,
represented outstanding LTVGIA Shares (the "LTVGIA Certificates") shall cease to
have any rights with respect thereto. LTVGIA Shares that are owned by LTVGIA as
treasury stock, if any, shall not convert into ADSs in accordance with this
Section 3.1(a).
All TNCL Shares (and the ADSs representing such TNCL Shares) issued
pursuant to this Agreement will be issued free and clear of any Liens or
Restrictions other than those created by LMC or such Controlled Affiliate
Acquirer, and except for any restrictions on transfer arising under the
Securities Act, state securities laws, the Corporations Act, the Amended
Registration Rights Agreement or the Restricted Securities Letter Agreement.
(b) Registration and Lock-Up of ADSs and TNCL Shares.
------------------------------------------------
(i) The ADSs (and the TNCL Shares underlying such ADSs) to
be issued pursuant to Sections 3.1(a) and 3.1(c)(ii) will be issued without
being registered under the Securities Act. The ADSs (and the TNCL Shares
underlying such ADSs) to be issued to LMC or each such Controlled Affiliate
Acquirer hereunder will be acquired for LMC's or such Controlled Affiliate
Acquirer's own account for investment purposes only, and not with a view to, or
for sale in connection with, any distribution of any such ADSs (or the TNCL
Shares underlying such ADSs) in violation of the Securities Act, any applicable
state securities laws or the Corporations Act. LMC understands and acknowledges
that (A) none of the ADSs (or the TNCL Shares underlying such ADSs) to be issued
as Merger Consideration hereunder have been registered under the Securities Act
or any applicable state securities law and, when issued, will be "restricted
securities" within the meaning of Rule 144 under the Securities Act, and (B) the
ADSs (and the TNCL Shares underlying such ADSs) cannot be sold, transferred or
otherwise disposed of in the U.S. unless such ADSs (and, under certain
circumstances, the TNCL Shares underlying such ADSs) subsequently are registered
under the Securities Act and any applicable state securities laws, or exemptions
from registration thereunder are available.
(ii) Prior to or concurrently with the Closing, TNCL and
LMC shall enter into an amendment and restatement of the TNCL Registration
Rights and Lock-Up Agreement, dated May 2, 2001, between TNCL and LMC (the "TNCL
Registration Rights Agreement"). Such amended and restated TNCL Registration
Rights Agreement shall be in substantially the form set forth in Exhibit B
hereto and is hereinafter referred to as the "Amended Registration Rights
Agreement."
(c) Adjustments to Merger Consideration.
-----------------------------------
(i) All references in this Agreement to the number of ADSs
issuable upon consummation of the Merger shall be subject to appropriate
adjustment (which adjustment shall be made in an equitable manner and in
accordance with applicable ASX Listing Rules in order to provide the parties
with the economic benefits and burdens bargained for hereunder) in the event of
stock splits, eligible bonus issues, combinations, or any recapitalization,
reclassification or similar transaction (a "TNCL Adjustment Transaction")
involving TNCL the effective date or record date for which is on or after
September 27, 2000 and on or before the Closing Date; provided, however, that in
-------- -------
the event any Additional ADSs are
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issuable as part of the Merger Consideration upon the record or effective date
of such TNCL Adjustment Transaction, such adjustment shall be made in respect of
all such Additional ADSs which would have been outstanding had the Effective
Time occurred immediately prior to the record or effective date of the TNCL
Adjustment Transaction. If any spin-off, eligible bonus issue, split-off or
other transaction involving TNCL occurs, or a record date is established for any
such transaction, and the preceding sentence does not provide a proper equitable
adjustment for LMC and its Controlled Affiliate Acquirers with respect to such
transaction, the number of any ADSs or TNCL Shares thereafter deliverable to LMC
and its Controlled Affiliate Acquirers pursuant to this Agreement shall be
adjusted, or shall be delivered together with securities issued or distributed
in such transaction, so as to provide LMC and its Controlled Affiliate Acquirers
with the consideration bargained for in this Agreement and to place them in the
same position as they would have been in if such ADSs or TNCL Shares had been
delivered to them immediately prior to the record date or effective date for
such transaction (which adjustment shall be made in an equitable manner and in
accordance with applicable ASX Listing Rules in order to provide the parties
with the economic benefits and burdens bargained for hereunder). In the event of
any stock split, stock dividend, stock combination, reclassification, share
exchange or similar transaction affecting the Gemstar Shares, which has a
payment date or effective date, as applicable, which is on or after September
27, 2000 and prior to the Closing Date, the number of Gemstar Shares held by
LTVGIA and the number of ADSs issuable per Gemstar Share shall be
correspondingly adjusted.
(ii) In the event that any dividend or other distribution, in
cash, securities or other property (including, but not limited to, any rights,
warrants, options or other securities entitling the holder to purchase TNCL
Shares or ADSs or other securities or property (including ADRs in respect of
such securities), but excluding any dividend or distribution for which an
adjustment is provided in paragraph (i) above) (such dividend or distribution, a
"Qualifying Dividend"), shall be declared, paid or made on or in respect of the
TNCL Shares on or after November 27, 2001, and on or before the Closing Date
(subject to the proviso in the immediately following sentence), then upon each
-------
date on which a Qualifying Dividend on the TNCL Shares is paid or made (each
such date, a "Payment Date"), the Merger Consideration shall be increased by
adding thereto as Additional Merger Consideration a number of ADSs (the
"Additional ADSs") (rounded, for purposes of the following calculations, to the
nearest 1/100th of an ADS) equal to (x) the aggregate amount of (1) cash and (2)
the fair market value of any security or other property (as determined by the
Board of Directors of TNCL in good faith and set forth in a resolution of the
Board of Directors to such effect) payable in respect of the TNCL Shares
underlying the ADSs issuable to LMC and/or the Controlled Affiliate Acquirers as
Merger Consideration (with the number of ADSs constituting the Merger
Consideration to be determined as if (A) the Effective Time had occurred
immediately prior to the record date for or the effective date of such
Qualifying Dividend and (B) the Additional ADSs constituting Additional Merger
Consideration had been issued as of the Payment Date related thereto) divided by
(y) the average of the daily Closing Prices of an ADS for the ten (10)
consecutive trading days ending on the Business Day preceding the Ex-Dividend
Date, or if there is no such Ex-Dividend Date for such Qualifying Dividend, the
date specified for payment of such Qualifying Dividend (such period, the
"Measurement Period"). The adjustments required by this paragraph (ii) shall be
made upon each payment of a Qualifying Dividend made (or having a record date)
on or after November 27, 2001, and on or prior to the Closing Date; provided,
--------
that in the case of any Qualifying Dividend whose record date is on or prior to
the Closing Date but whose payment date is scheduled to be after the Closing
Date, then the amount of Additional
-00-
Xxxxxx Xxxxxxxxxxxxx to be issued to LMC and/or the Controlled Affiliate
Acquirer at the Effective Time shall be increased by the number of Additional
ADSs that LMC and/or the Controlled Affiliate Acquirer would have been entitled
to receive had the Payment Date immediately preceded the Effective Time, subject
to the obligation of LMC (and/or the Controlled Affiliate Acquirers) to deliver
to TNCL any such Additional ADSs issued to LMC (and/or the Controlled Affiliate
Acquirers) in anticipation of the payment or distribution of such Qualifying
Dividend, in the event such payment or distribution is not made. For purposes of
this Section 3.1(c)(ii), the amount of the Qualifying Dividend shall be stated
in terms of United States Dollars, with any portion of such Qualifying Dividend
which is stated in terms of Australian Dollars being converted to United States
Dollars using an exchange rate which is equal to the average of the daily 4:00
p.m. Eastern time exchange rates (as published by The Wall Street Journal (or
-----------------------
such other published exchange rate as the parties may agree)) for each trading
day for which the Closing Price of an ADS is determined during the Measurement
Period.
Section 3.2 Exchange of Certificates.
(a) Depositary. TNCL, pursuant to the terms of the Deposit
----------
Agreement, shall, prior to the Effective Time, (i) deposit with the Custodian
the TNCL Shares underlying the ADSs to be issued in the Merger and (ii) instruct
the Depositary to prepare the requisite ADRs to evidence the ADSs to be issued
in the Merger for exchange in accordance with this Article III.
(b) Exchange Procedures. On the Closing Date, upon surrender of
-------------------
all of the LTVGIA Certificates to TNCL for cancellation, TNCL shall cause to be
delivered to LMC in exchange therefor one or more ADR(s) representing that whole
number of ADSs that LMC and its Controlled Affiliate Acquirers have the right to
receive pursuant to the provisions of this Article III, and the LTVGIA
Certificates so surrendered shall forthwith be canceled. TNCL shall pay any
stamp duties, transfer taxes, and other similar charges (including all fees and
charges of the Depositary, registrar and Custodian for the ADSs) required by
reason of the issuance of the ADSs to LMC or Controlled Affiliate Acquirers of
LMC pursuant to the provisions of this Article III; provided, however, that,
-------- -------
unless otherwise provided by the Deposit Agreement, under no circumstances shall
TNCL pay any stamp duties, transfer taxes, or other similar charges required by
reason of any subsequent transfer or assignment by LMC or Controlled Affiliate
Acquirers of LMC of the ADSs (or the underlying TNCL Shares) or the conversion
by LMC of ADSs into actual TNCL Shares. LMC acknowledges that neither it nor any
of its Controlled Affiliate Acquirers shall acquire any right, title or interest
in the TNCL Shares or the ADSs to be issued pursuant to this Agreement until the
Effective Time and, if the Effective Time does not occur, shall assist TNCL, at
TNCL's sole cost and expense, in canceling, and removing from any register or
exchange references to, the TNCL Shares and the ADSs to be issued pursuant to
this Agreement.
(c) No Further Ownership Rights in LTVGIA Shares. All ADSs issued
--------------------------------------------
upon the surrender for exchange of the LTVGIA Certificates in accordance with
the terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to the LTVGIA Shares, and from and after the Effective Time
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the LTVGIA Shares which are converted pursuant
to the Merger and were outstanding immediately prior to the Effective Time. If,
after
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the Effective Time, LTVGIA Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged for no
consideration.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LMC
-------------------------------------
AND LTVGIA
----------
LMC and LTVGIA hereby, jointly and severally, make the following
representations and warranties to TNCL and NPAL, it being understood and agreed
that references herein to LTVGIA's properties, assets, liabilities, commitments
or business or any of them shall in no event be construed as a representation or
warranty with respect to Gemstar or any of its properties, assets, liabilities,
commitments or businesses, and no such representation or warranty is made:
Section 4.1 Organization and Qualifications. Each of LMC and LTVGIA is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all governmental permits, approvals and other authorizations
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority and governmental
permits, approvals and other authorizations would not, individually or in the
aggregate, have a material adverse effect on (i) the business, assets, financial
or other condition, or results of operations of LTVGIA, or (ii) the ability of
LMC or LTVGIA to consummate the Merger (in either case, an "LTVGIA Material
Adverse Effect").
Section 4.2 Capitalization; No Liens.
(a) LTVGIA. All of the issued and outstanding shares of Capital
------
Stock of LTVGIA are duly authorized, validly issued, fully paid and
nonassessable, and are owned of record as of the date hereof by LMC free and
clear of any Liens and Restrictions (other than any Liens or Restrictions
arising out of or pursuant to this Agreement, the Gemstar Stockholders'
Agreement, the Gemstar Rights Plan, the September Letter Agreement and any
restrictions on transfer arising under the Securities Act or state securities
laws). The LTVGIA Shares constitute all of the issued and outstanding shares of
Capital Stock of LTVGIA. All of the share certificates issued and outstanding
which represent the LTVGIA Shares will be delivered to NPAL on the Closing Date.
No other shares of Capital Stock or other voting securities of LTVGIA are
issued, reserved for issuance or outstanding. There are no options or agreements
relating to the issued or unissued Capital Stock of LTVGIA or obligating LTVGIA
to issue, transfer, grant or sell any shares of Capital Stock of, or other
equity interests in, or securities convertible into or exchangeable for any
Capital Stock or other equity interests in, LTVGIA other than this Agreement and
the September Letter Agreement. There are no outstanding contractual obligations
of LTVGIA to repurchase, redeem or otherwise acquire any shares of Capital Stock
of LTVGIA.
(b) Gemstar Shares. The Gemstar Shares are owned of record as of
--------------
the date hereof by LTVGIA free and clear of any Liens and Restrictions (other
than (i) Liens or Restrictions arising out of or pursuant to this Agreement, the
September Letter Agreement, the
-15-
Gemstar Stockholders' Agreement, or Gemstar Rights Plan and (ii) any
restrictions on transfer arising under the Securities Act or state securities
laws). Upon consummation of the Merger, the Surviving Corporation will hold the
Gemstar Shares, directly or indirectly, free and clear of any Liens and
Restrictions (other than (i) Liens or Restrictions arising out of or pursuant to
the Gemstar Stockholders' Agreement, the Gemstar Rights Plan or this Agreement,
(ii) any Liens or Restrictions created by TNCL or any of its Affiliates and
(iii) any restrictions on transfer arising under the Securities Act or state
securities laws).
Section 4.3 Authority Relative to This Agreement.
(a) Each of LMC and LTVGIA has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger.
(b) The execution and delivery of this Agreement by LMC and LTVGIA
and the consummation by LMC and LTVGIA of the Merger have been duly and validly
authorized by all necessary corporate action on their part, and no other
corporate proceedings on the part of LMC and LTVGIA are necessary to authorize
this Agreement or to consummate the Merger (other than the Merger Filing). This
Agreement has been duly and validly executed and delivered by LMC and LTVGIA
and, assuming the due authorization, execution and delivery hereof by TNCL and
NPAL, constitutes the legal, valid and binding obligation of each of LMC and
LTVGIA, enforceable against each of LMC and LTVGIA in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights generally and by equitable
principles to which the remedies of specific performance and injunctive and
similar forms of relief are subject.
Section 4.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by each of LMC
and LTVGIA do not, and the performance of their respective obligations under
this Agreement and the consummation of the Merger by LTVGIA will not, (i)
conflict with or violate the certificate of incorporation or By-laws of LMC or
LTVGIA; (ii) subject to Section 8.1(a) and to satisfaction of the requirements
set forth in clauses (i) through (v) of Section 4.4(b), conflict with or
constitute a violation by LMC or LTVGIA of any Applicable Law applicable to LMC
or LTVGIA or by which any property or asset of LTVGIA is bound or affected,
except in such instances which would not have an LTVGIA Material Adverse Effect,
and except that no representation or warranty is made herein with respect to
foreign laws, regulations or rules of jurisdictions in which LMC does not,
directly or indirectly, own any assets or conduct any business ("LMC Excluded
Jurisdictions"); or (iii) conflict with or result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss (by LTVGIA) or modification in a manner
materially adverse to LTVGIA of any material right or benefit under, or give to
others any right of termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or result in the creation of
any Lien on any property or asset of LTVGIA pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise, or
other instrument or obligation (collectively, the "Contractual Obligations") to
which LTVGIA is a party or by which LTVGIA or any property or asset of LTVGIA is
bound or affected, except in such instances which would not result in an LTVGIA
Material Adverse Effect, and except that
-16-
no representation is made with respect to the Gemstar Rights Plan, the Gemstar
Stockholders' Agreement, or any agreement or understanding between LMC or any of
its Controlled Affiliates, on the one hand, and TNCL or any of its Controlled
Affiliates, on the other hand.
(b) The execution and delivery of this Agreement by LMC and LTVGIA
do not, and the performance of their respective obligations under this Agreement
and the consummation of the Merger by LMC and LTVGIA will not require any
consent, approval, authorization, waiver or permit of (a "Governmental
Consent"), or filing with or notification to (a "Governmental Filing"), any
federal, state, local or foreign governmental or regulatory agency, authority,
commission or instrumentality (each a "Governmental Entity") (provided, that no
representation or warranty is made by LMC or LTVGIA with respect to Governmental
Consents from, or Governmental Filings with, any Governmental Entity in an LMC
Excluded Jurisdiction), other than (i) the pre-merger notification requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (collectively, the "HSR Act") required to be
satisfied by TNCL, (ii) the requirements under applicable Australian law (other
than with respect to the ASX and the ASIC) that have heretofore been satisfied,
and the filings with the ASX and the ASIC to be made by TNCL following the
Closing, (iii) the pre-merger notification requirements of German merger control
law, which have heretofore been satisfied by TNCL, (iv) the Merger Filing, (v)
the approval of the Brazilian competition authorities, (vi) the entering into of
a gain recognition agreement as contemplated by Section 7.6, and (vii) where the
failure to obtain such consents, approvals, waivers, authorizations or permits,
or to make such filings or provide such notice would not, individually or in the
aggregate, have an LTVGIA Material Adverse Effect.
Section 4.5 Gemstar Shares are LTVGIA's Sole Asset; No LTVGIA Liabilities.
Except as contemplated by this Agreement, (i) the Gemstar Shares are LTVGIA's
sole assets, and (ii) LTVGIA has no liabilities (whether absolute, accrued or
contingent) and has no unfulfilled commitments, in each case, other than
pursuant to the Gemstar Stockholders' Agreement and the Gemstar Rights Plan and
except that no representation or warranty is made with respect to liabilities or
commitments to TNCL or its Affiliates.
Section 4.6 Litigation. There are no actions, suits, arbitrations, legal
or administrative proceedings or investigations ("Legal Proceedings") pending
or, to the knowledge of LTVGIA, threatened against LTVGIA, and neither LTVGIA
nor its assets, properties or business, is subject to any judgment, decree,
order, injunction or writ of any Governmental Entity or arbitrator.
Section 4.7 Tax Matters.
(a) LTVGIA has filed all material Returns that it was required to
file. All such Returns are correct and complete in all material respects. All
material Taxes owed by LTVGIA (whether or not shown on any Return) have been
paid. There are no Liens for material Taxes (other than for current Taxes not
yet due and payable or for items being contested in good faith and for which
there are adequate reserves in accordance with GAAP on the books of LMC or its
applicable Subsidiary) on any of the assets of LTVGIA.
(b) LTVGIA has withheld and paid all material Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor or other third party.
-17-
(c) No material deficiencies for any Taxes have been proposed,
asserted or assessed against LTVGIA that are not adequately reserved for in
accordance with GAAP in all cases applied in a consistent basis with the most
recent LMC balance sheet. None of the Returns of LTVGIA is currently the subject
of an audit.
(d) LTVGIA does not have any current non-contingent liability for
the Taxes of any Person under Treasury Regulation ss. 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(e) If the income of LTVGIA is required under federal, state,
local or foreign Tax rules to be included on a consolidated, unitary, combined
or other such Return which includes LMC or any of its Controlled Affiliates and
which is filed by an entity other than LTVGIA, any such group has filed all
Returns that it was required to file with respect to LTVGIA for each period
during which LTVGIA was a member of such group. All such Returns were correct
and complete in all material respects in so far as they relate to LTVGIA. All
material Taxes owed by such group with respect to LTVGIA (whether or not shown
on a Return) have been paid for each taxable period during which LTVGIA was a
member of its group.
(f) The normal period within which to examine and/or assess Taxes
on the income of LTVGIA has not been extended with respect to any such entity by
waiver of, or agreement to extend, the applicable statute of limitations or
otherwise.
(g) LTVGIA will not be party to any tax sharing or allocation
agreement as of the Effective Time.
Section 4.8 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of LTVGIA.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TNCL
--------------------------------------
TNCL hereby represents and warrants to LMC and LTVGIA as follows:
Section 5.1 Organization and Qualifications. TNCL is duly registered and
validly existing under the Corporations Act. NPAL is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Each of TNCL and NPAL has the requisite power and authority and all
governmental permits, approvals and other authorizations necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or, if
applicable, in good standing, or to have such power, authority and governmental
permits, approvals and other authorizations, would not, individually or in the
aggregate, have a material adverse effect on (i) the business, assets, financial
or other condition, or results of operations of TNCL and the Subsidiaries of
TNCL (the "TNCL Subsidiaries"), taken as a whole, or (ii) the ability of TNCL or
NPAL to consummate the Merger (in either case, a "TNCL Material Adverse
Effect").
Section 5.2 Validity of ADSs and TNCL Shares. The ADSs to be issued in the
Merger will be issued by the Depositary under the terms of the Deposit
Agreement, as supplemented by
-18-
a letter agreement substantially in the form of the letter agreement, dated May
2, 2001, among TNCL, LMC and Citibank, N.A. entered into in connection with the
NPAL/LUVSG Merger Agreement, with such changes as are appropriate to provide for
the issuance of the Merger Consideration as "Restricted ADSs" thereunder (the
"Restricted Securities Letter Agreement"). The TNCL Shares underlying the ADSs
to be issued pursuant to this Agreement will, on and from their date of
allotment and issue, rank pari passu in all respects with all existing TNCL
Shares on issue at that date (including as to dividends). All of the TNCL Shares
underlying the ADSs to be issued pursuant to this Agreement are duly authorized
and, when deposited with the Custodian in accordance with the terms of the
Deposit Agreement from and after the Effective Time, will be duly authorized,
validly issued, fully paid and nonassessable and free and clear of all Liens and
Restrictions (other than Liens or Restrictions created by LMC or the Controlled
Affiliate Acquirers, and except for any restrictions on transfer arising under
the Securities Act, state securities laws, the Corporations Act, the Restricted
Securities Letter Agreement or the Amended Registration Rights Agreement). Upon
issuance by the Depositary of ADSs evidencing the TNCL Shares against the
deposit of the TNCL Shares in accordance with the terms of the Deposit
Agreement, the ADSs to be issued pursuant to this Agreement will be duly and
validly issued and the Persons in whose names the ADSs are to be registered as
contemplated by this Agreement will be entitled to the rights of registered
holders of ADRs specified in the Deposit Agreement and in the ADRs evidencing
such ADSs, free and clear of all Liens and Restrictions (other than those
created by such Persons and except for restrictions on transfer arising under
the Securities Act, state securities laws, the Corporations Act, the Amended
Registration Rights Agreement or the Restricted Securities Letter Agreement).
The Deposit Agreement has been duly and validly authorized by all necessary
corporate action of TNCL, has been duly and validly executed and delivered by
TNCL, and, assuming the due authorization, execution and delivery thereof by the
Depositary, constitutes the legal, valid and binding obligation of TNCL,
enforceable against TNCL in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights generally and by equitable principles to which the remedies
of specific performance and injunctive and similar forms of relief are subject.
As of (but subject to) the Closing TNCL shall have (a) issued and allotted the
TNCL Shares underlying the ADSs to be issued pursuant to this Agreement to the
Custodian and made such entries in the register of members of TNCL as are
required by the Corporations Act to record the Custodian as a member of TNCL in
respect of such TNCL Shares; (b) delivered to the Custodian or as the Custodian
directs holding statements for the TNCL Shares underlying such ADSs evidencing
the Custodian as registered holder of the TNCL Shares underlying such ADSs; (c)
applied for quotation on the ASX of the TNCL Shares underlying such ADSs in
accordance with the requirements of the Listing Rules and Business Rules of the
ASX; and (d) applied for listing of such ADSs on the New York Stock Exchange
(the "NYSE").
Section 5.3 Authority Relative to This Agreement.
(a) Each of TNCL and NPAL has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the Merger without the need for approval by the
shareholders of TNCL.
(b) The execution and delivery of this Agreement by TNCL and NPAL
and the consummation by TNCL and NPAL of the Merger have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of TNCL or NPAL
-19-
are necessary to authorize this Agreement or to consummate the Merger (other
than the Merger Filing). This Agreement has been duly and validly executed and
delivered by each of TNCL and NPAL and, assuming the due authorization,
execution and delivery hereof by LMC and LTVGIA, constitutes the legal, valid
and binding obligation of each of TNCL and NPAL, enforceable against each of
TNCL and NPAL in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to which the remedies of
specific performance and injunctive and similar forms of relief are subject.
Section 5.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by TNCL and NPAL
do not, and the performance of their respective obligations under this Agreement
and the consummation of the Merger by TNCL and NPAL will not, (i) conflict with
or violate the articles of incorporation or By-laws or equivalent organizational
documents of TNCL or NPAL, (ii) subject to Section 8.1(a) and to satisfaction of
the requirements set forth in clauses (i) through (iv) of Section 5.4(b),
conflict with or constitute a violation by TNCL or NPAL of the applicable
Listing Rules of the ASX or the NYSE or any Laws applicable to TNCL or NPAL or
by which any property or asset of TNCL or NPAL is bound or affected, except in
such instances which would not have a TNCL Material Adverse Effect, and except
that no representation or warranty is made herein with respect to foreign laws,
regulations or rules of jurisdictions in which none of TNCL, Gemstar or NPAL,
directly or indirectly, owns any assets or conducts any business ("TNCL Excluded
Jurisdictions"), or (iii) conflict with or result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss (by TNCL or NPAL) or modification in a manner
materially adverse to TNCL or NPAL of a material right or benefit under, or give
to others any right of termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or result in the creation of
any Lien on any property or asset of TNCL or NPAL pursuant to, any Contractual
Obligations to which TNCL or NPAL is a party or by which TNCL or NPAL or any
property or asset of TNCL or NPAL is bound or affected, except in such instances
which would not result in a TNCL Material Adverse Effect, and except that no
representation is made with respect to any agreement or understanding between
LMC or any of its Controlled Affiliates, on the one hand, and TNCL or any of its
Controlled Affiliates on the other hand.
(b) The execution and delivery of this Agreement by each of TNCL
and NPAL do not, and the performance of their respective obligations under this
Agreement and the consummation of the Merger by TNCL and NPAL will not require
any Governmental Consent or Governmental Filing (provided, that no
--------
representation or warranty is made with respect to Governmental Consents from,
or Governmental Filings with, any Governmental Entity in a TNCL Excluded
Jurisdiction), other than (i) the pre-merger notification requirements of the
HSR Act that have heretofore been satisfied by TNCL, (ii) the requirements under
applicable Australian law (other than with respect to the ASX and the ASIC) that
have heretofore been satisfied, and the filings with the ASX and the ASIC to be
made by TNCL following the Closing, (iii) the pre-merger notification
requirements of German merger control law that have heretofore been satisfied by
TNCL, (iv) the approval of the Brazilian competition authorities, (v) the Merger
Filing, and (vi) where the failure to obtain such consents, approvals, waivers,
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authorizations or permits, or to make such filings or provide such notice, would
not, individually or in the aggregate, have a TNCL Material Adverse Effect.
Section 5.5 Absence of Certain Changes or Events. Except as contemplated
by this Agreement or as disclosed in any filing by TNCL with the SEC that is
publicly available as of the date hereof, since June 30, 2000, (a) TNCL,
together with the TNCL Subsidiaries, taken as a whole, has conducted its
business in the ordinary course, consistent with past practice, and (b) there
has not occurred or arisen any event that, individually or in the aggregate, has
had or, insofar as reasonably can be foreseen, is likely in the future to have,
a TNCL Material Adverse Effect, other than events or developments generally
affecting the industries in which TNCL and the TNCL Subsidiaries operate. No
receiver or administrator of TNCL's or of the whole or any part of TNCL's assets
has been appointed.
Section 5.6 Litigation. There are no Legal Proceedings pending or, to the
knowledge of TNCL or NPAL, threatened against TNCL or any of the TNCL
Subsidiaries (including NPAL), which could reasonably be expected to have,
individually or in the aggregate, a TNCL Material Adverse Effect, nor is there
any judgment, decree, order, injunction or writ of any court, Governmental
Entity or arbitrator outstanding against TNCL or any of the TNCL Subsidiaries
having, or which, insofar as can be reasonably foreseen, in the future is
reasonably likely to have, any such TNCL Material Adverse Effect.
Section 5.7 Capitalization. As of October 12, 2001, the issued capital
stock of TNCL consisted of 2,093,043,326 Ordinary Shares (as such term is
defined in TNCL's Constitution) and 2,940,659,839 TNCL Shares. All of such
shares were duly authorized, validly issued, fully paid and nonassessable.
Section 5.8 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of TNCL or NPAL.
Section 5.9 NPAL. NPAL is a directly owned "controlled" U.S. subsidiary of
TNCL within the meaning of Section 368(c) of the Code.
Section 5.10 Foreign Private Issuer. TNCL (a) is a "foreign private issuer"
within the meaning of Rule 3b-4 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and (b) with respect to the ADRs is eligible to
use Form 20-F under the Exchange Act.
Section 5.11 Disclosure. TNCL's Annual Report on Form 20-F for the fiscal
year ended June 30, 2001 (the "20-F"), at the time filed, complied in all
material respects with the applicable requirements of Form 20-F under the
Exchange Act, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
The consolidated financial statements (including the notes thereto) of TNCL and
its subsidiaries included in the 20-F, at the time filed, fairly presented in
all material respects the consolidated financial position, results of operations
and cash flows of TNCL and its consolidated subsidiaries as at the respective
dates thereof and for the respective periods indicated therein.
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ARTICLE VI
CONDUCT PENDING THE MERGER
--------------------------
Section 6.1 Prohibited Actions. LMC and LTVGIA covenant and agree that,
from the date hereof until the earlier of the Effective Time or the termination
of this Agreement, unless TNCL shall otherwise agree in writing prior to the
taking of any action otherwise prohibited by the terms of this Section 6.1:
(a) LTVGIA shall not issue or authorize the issuance of, grant or
otherwise create any additional shares of, or any options to acquire any shares
of, its Capital Stock or any debt or equity securities convertible into or
exchangeable for such Capital Stock, and neither LMC nor LTVGIA shall sell,
mortgage, pledge or subject to Lien or Restriction any of the shares of Capital
Stock of LTVGIA or any of the Gemstar Shares;
(b) Neither LMC nor LTVGIA shall enter into, accept or otherwise
agree to become bound by any negative covenant restricting in any manner the
right of such entity to consummate the Merger;
(c) (i) LTVGIA shall not enter into or agree to enter into any
agreement, contract or commitment affecting its direct ownership of or its
rights to transfer the Gemstar Shares in connection with the Merger, and (ii)
LMC shall not enter into or agree to enter into any agreement, contract or
commitment affecting its indirect ownership of or any rights to cause the
transfer of the Gemstar Shares in connection with the Merger;
(d) LTVGIA shall not conduct any business, other than holding and
exercising the rights of a holder of, the Gemstar Shares (subject to the Gemstar
Stockholders' Agreement, this Agreement, the letter agreement, dated May 2,
2001, between LMC and TNCL regarding the Gemstar Stockholders' Agreement (the
"Gemstar Side Letter"), and matters reasonably incidental thereto) and other
than in connection with its performance under the Gemstar Side Letter;
(e) LTVGIA shall not incur or become contingently liable with
respect to any Indebtedness, or assume, guarantee or otherwise become
responsible for the Indebtedness of any other party or agree to so do; for
purposes of this Section 6.1(e), "Indebtedness" shall mean and include (i)
indebtedness for borrowed money whether short-term or long-term and whether
secured or unsecured, (ii) indebtedness for the deferred purchase price of
services or property, (iii) obligations under capitalized leases, (iv)
obligations arising under acceptance facilities, (v) all obligations evidenced
by bonds, debentures, notes or other similar instruments, (vi) all obligations
upon which interest charges are customarily paid, and (vii) renewals,
extensions, refundings, deferrals, restructurings, amendments and modifications
of any such indebtedness, guarantee or obligation;
(f) LMC shall not sell, transfer or contribute any of the LTVGIA
Shares held by LMC, and LTVGIA shall not sell, transfer or contribute any of the
Gemstar Shares held by LTVGIA.
(g) LTVGIA shall not enter into any Settlement Agreements;
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(h) LTVGIA shall not declare, set aside, make or pay any dividend
or other distribution, payable in cash, stock, property or otherwise, with
respect to any of its Capital Stock, except to satisfy any requirement of this
Agreement;
(i) Neither LMC nor LTVGIA shall take any action, or enter into
any transaction, prior to the Closing Date, which would result in a breach of
any representation, warranty, covenant or agreement contained in this Agreement;
or
(j) LTVGIA shall not merge, consolidate with or consummate any
other business combination with any Person or acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business entity.
Section 6.2 TNCL Covenants. TNCL and NPAL covenant and agree that, from
the date hereof until the earlier of the Effective Time or the termination of
this Agreement, unless LMC shall otherwise agree in writing prior to the taking
of any action otherwise prohibited by the terms of this Section 6.2, TNCL and
NPAL shall not:
(i) take any action, or enter into any transaction
prior to the Closing Date, which would result in a breach of any representation,
warranty, covenant or agreement contained in this Agreement; or
(ii) take any action, or enter into any transaction
prior to the Closing Date, which could reasonably be expected to adversely
effect or delay the ability of any of the parties hereto to obtain any
Governmental Consent or make any Governmental Filing or maintain the
effectiveness of any Governmental Consent or Governmental Filing heretofore
received, obtained or made (or which is received, obtained or made after the
date hereof) required to consummate the Merger.
ARTICLE VII
ADDITIONAL COVENANTS
--------------------
Section 7.1 Approvals. TNCL and LMC shall cooperate and each shall use its
reasonable best efforts to receive, obtain and make any Governmental Consents or
Governmental Filings required in connection with the Merger (including, without
limitation, filings and submissions to the ASX, the ASIC and the NYSE, and
obtain all consents and approvals from parties to contracts with the parties
hereto or their respective Controlled Affiliates as are necessary for the
consummation of the Merger); provided, however, that to the extent any
-------- -------
Governmental Consent has been received or obtained, or any Governmental Filing
has been made, in each case prior to the date hereof, (x) TNCL shall use its
reasonable best efforts to cause such Governmental Consent or Governmental
Filing to remain in full force and effect (including paying any required filing
or other fees in respect thereof) and (y) LMC will (i) reasonably cooperate in
such efforts and (ii) not take any action (other than as contemplated by this
Agreement) the effect of which is reasonably likely to cause the revocation or
termination of the Treasurer Letter. In the event any Legal Proceeding by any
Governmental Entity or other Person is commenced which questions the validity or
legality of the Merger or seeks damages in connection therewith, the parties
agree to cooperate and use all reasonable efforts to defend
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against such Legal Proceeding and, if an injunction or other order is issued in
any Legal Proceeding, to use all reasonable efforts to have such injunction or
other order lifted, and to cooperate reasonably regarding any other impediment
to the consummation of the Merger; provided that none of LMC, LTVGIA or any of
--------
their Affiliates shall be required by this Section 7.1 to: (A) pay any
consideration (other than the payment of filing fees in connection with any
United States federal or state Governmental Filing that it is obligated to make
pursuant to this Agreement), (B) surrender, modify or amend in any substantive
respect any license or contract (including this Agreement), (C) hold separately
(in trust or otherwise), divest itself of, or otherwise rearrange the
composition of, any of its assets, (D) agree to any limitations on any such
Person's freedom of action with respect to future acquisitions of assets or with
respect to any existing or future business or activities or on the enjoyment of
the full rights of ownership, possession and use of any asset now owned or
hereafter acquired by any such person, or (E) agree to any of the foregoing or
any other conditions or requirements of any Governmental Entity or other person
that are adverse to its interests or materially burdensome.
Section 7.2 Access to Information. Subject to Applicable Law, from the
date hereof to the earlier of the Effective Time or the termination of this
Agreement, LMC and LTVGIA shall afford the officers, employees, auditors and
agents (the "Representatives") of TNCL access at reasonable times to the
officers, employees, agents, properties, offices, plants and other facilities,
books, records, agreements and Returns of or relating to LTVGIA or its business,
and shall furnish such Representatives with all of LTVGIA's financial, operating
and other data and information as may be reasonably requested.
Section 7.3 Further Action. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use commercially reasonable efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the Merger. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, each party shall use its commercially reasonable
efforts to take all such action.
Section 7.4 Public Announcements. The parties to this Agreement and their
respective Controlled Affiliates shall consult with each other before issuing
any press release or otherwise making any public statements with respect to this
Agreement or the Merger and shall not issue any such press release or make any
such public statement without the prior consultation with or consent of the
other parties to this Agreement, which consent shall not be unreasonably
withheld; provided, however, that a party may, without such prior consultation
-------- -------
with, or prior consent of, the other parties to this Agreement, issue such press
release or make such public statement as may be required by Applicable Law or
the listing requirements of any applicable stock exchange or securities
association; provided that the party issuing such release or making such
-------- ----
statement shall give written notice thereof to the other parties.
Section 7.5 Notification of Certain Matters.
(a) Prior to the Closing Date, LMC and LTVGIA shall promptly
notify TNCL and NPAL of:
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(i) any notice or other communication received by LMC
or LTVGIA from any Person alleging that the consent of such Person is or may be
required in connection with the Merger;
(ii) any notice or other communication from any
Governmental Entity received by LMC or LTVGIA in connection with the Merger;
(iii) any Legal Proceeding commenced or, to LMC's or
LTVGIA's knowledge, threatened against, relating to, involving or otherwise
affecting, LTVGIA;
(iv) any Legal Proceeding commenced or, to LMC's or
LTVGIA's knowledge, threatened against, relating to, involving or otherwise
affecting LMC or LTVGIA that relates to the consummation of the Merger; or
(v) any event, condition or circumstance of which LMC
or LTVGIA has knowledge, that (x) has, or is reasonably likely to have or does
have an LTVGIA Material Adverse Effect or (y) is, or is reasonably likely to
constitute, a breach of any representation, warranty or covenant made by such
Person, which breach is not capable of being cured prior to the Closing Date.
(b) Prior to the Closing Date, TNCL and NPAL shall promptly notify
LMC and LTVGIA of:
(i) any notice or other communication received by
TNCL or NPAL from any Person alleging that the consent of such Person is or may
be required in connection with the Merger;
(ii) any notice or other communication from any
Governmental Entity received by TNCL or NPAL in connection with the Merger;
(iii) any Legal Proceeding commenced or, to TNCL's or
NPAL's knowledge, threatened against, relating to, involving or otherwise
affecting TNCL or NPAL or which relates to the consummation of the Merger; or
(iv) any event, condition or circumstance of which
TNCL or NPAL has knowledge that (x) is reasonably likely to have or does have a
TNCL Material Adverse Effect or (y) is, or reasonably likely to constitute, a
breach of any representation, warranty or covenant made by such Person, which
breach is not capable of being cured prior to the Closing Date.
Section 7.6 Certain Tax Matters.
(a) Gain Recognition Agreement; Indemnity. LMC (or another member
-------------------------------------
of the Selling Affiliated Group) may be required to enter into a gain
recognition agreement under Section 367 of the Code with respect to the
conversion of the LTVGIA Shares into ADSs in the Merger. In the event that,
during the term of any such gain recognition agreement (or the term of any new
gain recognition agreement that LMC (or another member of the Selling Affiliated
Group) may be required to enter into as a result of any nonrecognition transfer
described in
-25-
Treasury Regulations (S)(S) 1.367(a)-8(g)(2) or (3)), TNCL or any of its
Affiliates makes any direct or indirect disposition or deemed disposition of the
stock or assets of the Transferred Corporation within the meaning of Treasury
Regulation (S) 1.367(a)-8 (including, if there has been a nonrecognition
transfer, any direct or indirect disposition or deemed disposition described in
Treasury Regulations (S)(S) 1.367(a)-8(g)(2)(iii) or 1.367(a)-8(g)(3)) which
thereby causes gain to be recognized pursuant to such gain recognition agreement
(or new gain recognition agreement), TNCL shall indemnify LMC for the amount of
any Adjustments on any Return filed by LMC or any member of a Selling Affiliated
Group which are required to be made as a result of the gain triggered pursuant
to such gain recognition agreement (or new gain recognition agreement). Such
indemnification payment amount shall be determined jointly by LMC and TNCL. TNCL
agrees to notify LMC of any action taken by it or any of its Affiliates that
will cause gain to be recognized under such gain recognition agreement (or new
gain recognition agreement). If TNCL or any of its Affiliates consummate any
nonrecognition transfer that is described in Treasury Regulations
(S)(S)1.367(a)-8(g)(2) or (3), TNCL shall provide timely notice to LMC of such
nonrecognition transfer so LMC (or another member of the Selling Affiliated
Group) may comply with the reporting requirements set forth in such sections of
the Treasury Regulations, and TNCL will cause LMC to be informed of any
subsequent disposition of property within the meaning of Treasury Regulations
(S)1.367(a)-8(g)(2)(iv).
(b) Tax Returns. To the extent requested by TNCL, LMC has made available
-----------
or will make available to TNCL all portions of Returns, and any amendments
thereto, filed by or on behalf of LTVGIA or with respect to its assets or
business, for all taxable years or applicable periods ending on or prior to the
Closing Date, in each case to the extent such Returns are reasonably relevant in
the preparation of Returns by or on behalf of LTVGIA or TNCL as transferee
subsequent to the Closing Date.
(c) Tax-Sharing Agreements. All tax settlement and tax-sharing
----------------------
agreements, arrangements, policies and guidelines, formal or informal, express
or implied ("Settlement Agreements"), other than this Section 7.6, to which
LTVGIA is a party or may be subject and all obligations thereunder shall
terminate as to LTVGIA on or prior to the Closing Date, and after the Closing
Date, neither LTVGIA nor TNCL as transferee shall be bound by such Settlement
Agreements or have any liability thereunder.
(d) Pre-Closing Returns.
-------------------
(i) LTVGIA shall continue to be included for all taxable periods
(or portions thereof) ending on or before the Closing Date in the consolidated
Federal income Return and any required state or local consolidated or combined
income or franchise Returns of any affiliated group of which LTVGIA is a member
(each of which is herein referred to as a "Selling Affiliated Group"), which
Returns include LTVGIA (all such Returns including taxable periods (or portions
thereof) of LTVGIA ending on or before the Closing Date are hereinafter referred
to, collectively, as "Pre-Closing Consolidated Returns"). LMC shall cause its
Selling Affiliated Groups to timely prepare and file (or cause to be prepared
and filed) all Pre-Closing Consolidated Returns and to timely pay all Taxes
shown as due and payable on Pre-Closing Consolidated Returns (including, but not
limited to, any Taxes with respect to any deferred income triggered into income
by Treasury Regulation (S) 1.1502-13 and Treasury Regulation (S) 1.1502-14 and
any excess loss accounts taken into income under Treasury Regulation (S)
1.1502-19).
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(ii) LMC shall timely prepare (or cause to be so
prepared) all other Returns of LTVGIA that are required by law for all taxable
periods ending on or before the Closing Date ("Pre-Closing Non-Consolidated
Returns"). All Pre-Closing Non-Consolidated Returns shall be prepared in a
manner consistent with prior practice and shall properly include and reflect the
income, activities, operations and transactions of LTVGIA, as applicable. LMC
shall timely file (or cause to be so filed) all Pre-Closing Non-Consolidated
Returns and shall pay (or cause LTVGIA to pay as it may be liable) all Taxes due
thereon. LMC shall also pay (or cause LTVGIA to pay as it may be liable) the
full amount of any Tax which is payable by LTVGIA without the filing of a Return
("Non-Return Taxes") to the extent such Non-Return Taxes are attributable to
taxable periods or any portion thereof ending on or before the Closing Date.
(e) Cooperation of the Parties. The parties shall cooperate with each
--------------------------
other in connection with any Tax filing, investigation, audit or other
proceeding relating to LTVGIA. LMC shall preserve all information, returns,
books, records and documents relating to any liabilities for Taxes with respect
to a taxable period until the later of the expiration of all applicable statutes
of limitation and extensions thereof, or a Final Determination (if a Legal
Proceeding or other action that is reasonably likely to lead to a Final
Determination is commenced prior to the expiration of the statute of limitations
and any extension thereof).
(f) Notices Regarding Taxes. If TNCL, NPAL or LTVGIA receives any
-----------------------
notice, whether orally or in writing, of any pending or threatened U.S. Federal,
state, local, municipal or foreign tax examinations, claims, settlements,
proposed adjustments, assessments or reassessments or related matters with
respect to Taxes that could affect LMC or its Subsidiaries (or LTVGIA with
respect to taxable periods or portions thereof ending on or before the Closing
Date), or if LMC or any of its Controlled Affiliates receives any notice of any
such tax matter that could reasonably be expected to give rise to an
indemnification obligation to TNCL under paragraph 7.6(h) below or otherwise
materially adversely affect TNCL, the party receiving such notice shall notify
in writing the potentially affected party within ten (10) calendar days thereof.
The failure of any party to give the notice required by this paragraph shall not
impair that party's rights under this Agreement except to the extent that the
other party demonstrates that it has been damaged thereby.
(g) Control of Tax Proceedings. Each of LMC and TNCL shall have the
--------------------------
right to control any audit or examination by any taxing authority, initiate any
claim for refund, file any amended return, contest, resolve and defend against
any assessment, notice of deficiency or other adjustment or proposed adjustment
relating to or with respect to any Taxes, the ultimate liability for which is
the responsibility of that party or its Affiliates under this Agreement, and
each of LMC and TNCL shall be entitled to, and to the extent received directly
or indirectly by the other shall be promptly paid by the other, all refunds with
respect to any such Taxes. LMC and TNCL shall jointly control, defend and
resolve any such tax matter as to which they both may be liable (in whole or in
part).
(h) Indemnification. After the Closing Date, LMC shall indemnify and
---------------
hold harmless TNCL and NPAL, and each of their respective successors and assigns
from and against any Tax liability of LTVGIA with respect to the period ending
on or before the Closing Date on any Pre-Closing Non-Consolidated Return and
with respect to any Non-Return Taxes attributable to the portion of the period
covered by any payment of such Taxes which ends on or
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before the Closing Date, in each case to the extent such amount exceeds any
amount previously paid to TNCL, NPAL, and their respective Affiliates,
successors and assigns with respect to such Tax pursuant to this Section 7.6.
LMC shall pay such amounts as it is obligated to pay to TNCL within ten (10)
calendar days after notice is given to LMC of the payment of any such applicable
Tax liability by TNCL, together with evidence of such payment and a statement
setting forth in reasonable detail the nature and amount of such Tax liability,
and to the extent not paid by LMC within such 10-day period, the amount due
shall thereafter include interest thereon at a rate per annum equal to the prime
rate as publicly announced from time to time by The Bank of New York (the
"Overpayment Rate"), adjusted as and when changes to such Overpayment Rate shall
occur, compounded semi-annually. LMC shall indemnify and hold harmless TNCL,
NPAL and each of their respective Affiliates, successors and assigns, from and
against (i) any Tax liability for periods prior to and including the Closing
Date resulting from LTVGIA being severally liable for any Taxes of any
consolidated group (including any Selling Affiliated Group) of which LTVGIA is
or was a member prior to the Closing Date pursuant to Treasury Regulation ss.
1.1502-6 or any analogous state, local or foreign tax provision (including,
without limitation, any Tax liability with respect to any Pre-Closing
Consolidated Return), and (ii) any Tax liability resulting from LTVGIA ceasing
to be a member of any Selling Affiliated Group of which it was a member prior to
the Closing Date filing consolidated or combined Returns. Notwithstanding
anything to the contrary in this Section 7.6(h), LMC shall not be obligated to
indemnify TNCL, NPAL or any of their respective Affiliates, successors or
assigns pursuant to this Section 7.6(h) to the extent that such Tax liability
would not have been incurred but for any breach by TNCL or NPAL of any of their
representations, warranties, covenants or agreements set forth herein. To the
extent permitted by law, the parties agree to treat indemnity payments under the
Agreement as adjustments to the consideration transferred in exchange for
LTVGIA.
(i) Restrictive Covenant. None of the parties hereto will take
--------------------
or cause to be taken (or fail to take or cause not to be taken) any action that
would reasonably be expected to cause the Merger to be a taxable transaction to
LMC, TNCL, any Affiliate of LMC or TNCL, or any Selling Affiliated Group;
provided that the foregoing shall not restrict any party or its Affiliates from
-------- ----
taking any action specifically contemplated by this Agreement, which, for all
purposes under this Agreement, shall be deemed to include the contribution by
any party of the ADSs or assets acquired pursuant to this Agreement to
successive "controlled" U.S. subsidiaries of such party as defined by Section
368(c) of the Code.
(j) Tax Certificate. Each of TNCL and NPAL represents and
---------------
warrants to LMC that the statements in the proposed form of representation
letter attached hereto as Exhibit C (the "Tax Certificate") are true and correct
as of the date hereof, assuming for purposes of this sentence that the Merger
had been consummated on the date hereof. Each of TNCL and NPAL agrees that, at
and prior to the Effective Time, it will not take or cause to be taken (or fail
to take or cause not to be taken) any action that would cause any of the
statements in the Tax Certificate to be false or incorrect.
(k) Change in Tax Law. If in the written opinion of counsel
-----------------
selected by LMC and reasonably satisfactory to TNCL, the conversion of the
LTVGIA Shares into ADSs in the Merger will not constitute a tax-free transaction
as to LMC, its Affiliates, and any Selling Affiliated Group solely as a result
of a change, or proposed change, in Tax law or regulations, including any change
resulting from (i) enactment, amendment or repeal of any statute, (ii)
promulgation, amendment or repeal of any final, temporary or proposed
regulation, (iii) issuance,
-28-
modification or withdrawal of any judicial or administrative interpretation, or
(iv) any other legislative, administrative or judicial action affecting current
law (a "Change in Tax Law"), occurring between the date hereof and the Closing
Date, LMC shall not be required to consummate the Merger. In the event that LMC
elects not to consummate the Merger in reliance on this paragraph, all
obligations of TNCL, NPAL and LMC under this Agreement shall terminate.
Section 7.7 Australian Treasury Matters. Each party shall have the
right to make submissions to the Treasurer of Australia notwithstanding that
another party may have made application and supplied information to the
Treasurer, and each party shall upon receiving any request for information from
the Treasurer provide such of that information as is in that party's possession
or control.
ARTICLE VIII
CONDITIONS TO THE MERGER
------------------------
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
will be subject to the fulfillment on or prior to the Closing Date of the
following conditions, either or both of which may be waived by the party
entitled to enforce the same, to the extent permitted by Applicable Law:
(a) HSR Act. No action shall have been taken by the U.S.
-------
Department of Justice or the U.S. Federal Trade Commission with respect to
NPAL's acquisition of the Gemstar Shares that remains unresolved.
(b) Adverse Enactments. No action shall have been taken, and no
------------------
statute, rule, regulation, executive order, judgment, decree, or injunction
shall have been enacted, entered, promulgated or enforced (and not repealed,
superseded, lifted or otherwise made inapplicable), by any court of competent
jurisdiction or Governmental Entity which restrains, enjoins or otherwise
prohibits the consummation of the Merger (each party agreeing to use its
commercially reasonable efforts to have any such order, judgment, decree or
injunction lifted and any such statute, rule or regulation repealed, superseded
or otherwise made inapplicable).
Section 8.2 Conditions to Obligations of LMC and LTVGIA to Effect the
Merger. The obligations of LMC and LTVGIA to effect the Merger are subject to
the satisfaction of the following conditions, unless waived by LMC:
(a) The representations and warranties of TNCL and NPAL
contained in this Agreement shall be true and correct as of the date of this
Agreement and at and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a specified
date, which shall be true and correct as of the specified date), except to the
extent that all of the breaches of such representations and warranties
collectively, without giving effect to any materiality qualification, could not
reasonably be expected to result in, or have not
-29-
resulted in a continuing TNCL Material Adverse Effect. Each of TNCL and NPAL
shall have delivered to LMC a certificate, dated as of the Closing Date, to the
foregoing effect.
(b) TNCL and NPAL shall each have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing. Each of TNCL and
NPAL shall have delivered to LMC a certificate, dated as of the Closing Date, to
the foregoing effect.
(c) LMC shall have received legal opinions of (i) Squadron, Ellenoff,
Plesent & Xxxxxxxxx, LLP, counsel to TNCL and NPAL, substantially in the form of
the opinion delivered to LMC by such firm in connection with the NPAL/LUVSG
Merger and (ii) Allens Xxxxxx Xxxxxxxx, counsel to TNCL, substantially in the
form of the opinion delivered to LMC by Xxxxx Xxxxx & Xxxxxxx in connection with
the NPAL/LUVSG Merger Agreement.
(d) The Treasurer of Australia shall not have made an order under
Section 18(2) of the Foreign Acquisitions and Takeovers Act of 1975 ("FATA")
prohibiting the Merger or any part thereof.
(e) The decision of the Foreign Investment Policy Division of the
Treasury of Australia by letter dated October 10, 2001 that there are no
objections to LMC's or its Controlled Affiliate Acquirer's acquisition of the
ADSs or TNCL Shares pursuant to the Merger under the Australian Government's
foreign investment policy (the "Treasurer Letter"), shall not have been
withdrawn or rescinded in whole or in part.
(f) If TNCL or any of its Controlled Affiliates has done or omitted to
do any act, matter or thing as a result of which LMC believes it is required to
lodge a further notice and submission to the Treasurer of Australia either under
the FATA or the Australian Government's Foreign Investment Policy in relation to
the transactions contemplated by this Agreement, one of the following shall have
occurred following the lodging by LMC of such further notice and submission: (i)
the Treasurer of Australia ceasing under Section 25(2) of FATA to be empowered
to make an order under Part II of FATA in relation to the entry into and
completion of the Merger or the acquisition by LMC of the ADRs or TNCL Shares or
(ii) notice in writing is issued by or on behalf of the Treasurer to the effect
that subject to the conditions, if any, specified therein, which are
satisfactory to LMC (it being understood that LMC would be satisfied with a
notice issued on the basis described in the Treasurer Letter), the Government of
Australia does not object to LMC or its Affiliates entering into and performing
the terms of this Agreement or, alternatively, does not object to LMC or its
Affiliates acquiring the ADRs or TNCL Shares or, alternatively, does not object
to the proposal specified in the notice described in section 25(1)(a) of FATA
that was given to the Treasurer in relation to the acquisition by LMC or its
Affiliates of the ADRs or TNCL Shares.
(g) TNCL and NPAL shall have executed and delivered to LMC the Tax
Certificate substantially in the form of Exhibit C hereto and dated as of the
Closing Date, which Tax Certificate shall be true and correct as of the
Effective Time, and no Change in Tax Law shall have occurred.
(h) TNCL shall have executed and delivered to LMC the Amended
Registration Rights Agreement, and it shall be in full force and effect.
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(i) TNCL and the Depositary shall have executed and delivered
to LMC the Restricted Securities Letter Agreement.
(j) LMC shall have received the stock certificates
representing the Merger Consideration.
(k) There shall not have occurred and be continuing any TNCL
Material Adverse Effect.
(l) Receipt of all consents, waivers or approvals, or the
expiration or termination of any time period, that may be required under
Applicable Law in order to consummate the Merger, if the failure to receive any
such consent, waiver or approval would have (x) a material adverse effect on the
business, assets, financial or other condition, or results of operations of LMC
and its Subsidiaries, taken as a whole, or prevent LMC from receiving, retaining
and exercising full rights of ownership of the Merger Consideration (in either
case, an "LMC Material Adverse Effect") or (y) an LTVGIA Material Adverse
Effect; provided, that compliance with any conditions of the Treasurer Letter
--------
shall not be considered a restraint on exercising full rights of ownership of
the Merger Consideration. Notwithstanding the foregoing, LMC and LTVGIA may not
assert the failure to receive a consent, waiver or approval (or for a time
period to expire or be terminated) as a condition to its obligations if such
failure arises out of or results from a breach by LMC or LTVGIA of any of its
representations, warranties, covenants or agreements made herein.
Section 8.3 Conditions to Obligations of TNCL and NPAL to Effect the
Merger. The obligations of TNCL and NPAL to effect the Merger are subject to the
satisfaction of the following conditions, unless waived by TNCL:
(a) The representations and warranties of LMC and LTVGIA
contained in this Agreement shall be true and correct as of the date of this
Agreement and at and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a specified
date, which shall be true and correct as of the specified date), except to the
extent that all of the breaches of such representations and warranties
collectively, without giving effect to any materiality qualification, could not
reasonably be expected to result in, or have not resulted in, a continuing
LTVGIA Material Adverse Effect.
(b) Each of LMC and LTVGIA shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date. LMC shall have delivered to TNCL a certificate, dated as of the Closing
Date, (i) certifying that the conditions specified in Sections 8.3(a) and (b)
have been fulfilled and (ii) attaching certified copies of the charter documents
and by-laws of LTVGIA.
(c) TNCL and NPAL shall have received the legal opinion of
Xxxxx Xxxxx L.L.P., substantially in the form of the opinion delivered to TNCL
and NPAL by such firm in connection with the NPAL/LUVSG Merger Agreement.
(d) The Treasurer of Australia shall not have made an order
under Section 18(2) of FATA prohibiting the Merger or any part thereof.
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(e) The Treasurer Letter shall not have been withdrawn or
rescinded in whole or in part.
(f) LMC shall have executed and delivered to TNCL the
Amended Registration Rights Agreement and it shall be in full force and effect.
(g) LMC and the Depositary shall have executed and delivered
to TNCL the Restricted Securities Letter Agreement.
(h) Receipt of all consents, waivers or approvals, or the
expiration or termination of any time period, that may be required under
Applicable Law in order to consummate the Merger, if the failure to receive any
such consent, waiver or approval would have a TNCL Material Adverse Effect or an
LTVGIA Material Adverse Effect; provided, that the approval of the Transaction
--------
by the Brazilian competition authorities shall not be deemed to be a condition
to the consummation of the Merger, unless (i) such approval has been denied or
(if such approval had been temporarily or conditionally granted) terminated, and
such denial or termination has become final and binding and is not subject to
further appeal and the consummation of the Merger in such a circumstance could
reasonably be expected to have a TNCL Material Adverse Effect or an LTVGIA
Material Adverse Effect or (ii) such approval has been granted subject to the
imposition of a condition imposing a material restriction or restrictions upon
the business of TNCL. Notwithstanding the foregoing, TNCL and NPAL may not
assert the failure to receive a consent, waiver or approval (or for a time
period to expire or be terminated) as a condition to its obligations if such
failure arises out of or results from a breach by TNCL or NPAL of any of its
representations, warranties, covenants or agreements made herein.
ARTICLE IX
TERMINATION, WAIVER, AMENDMENT
------------------------------
Section 9.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by the mutual written consent of TNCL and LMC.
Section 9.2 Termination by either TNCL or LMC. This Agreement may be
terminated and the Merger may be abandoned by either TNCL or LMC by written
notice to the other party if any Governmental Entity or any court of competent
jurisdiction in the U.S. or any other jurisdiction shall have enacted, issued,
promulgated, enforced or entered any injunction, order, judgment or decree
(other than a temporary restraining order) restraining, enjoining or otherwise
prohibiting the Merger and such injunction, order, judgment or decree shall have
become final and nonappealable.
Section 9.3 Termination by TNCL. This Agreement may be terminated by
TNCL at any time prior to the Effective Time (and the Merger shall thereupon be
abandoned) if there has been a material breach by LMC or LTVGIA of any material
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within 20 Business Days following receipt by LMC
of notice of such breach from TNCL provided, however, that the right to
-------- -------
terminate this Agreement pursuant to this Section 9.3 shall not be available to
TNCL if
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TNCL, at such time, is in material breach of any material representation,
warranty, covenant or agreement set forth in this Agreement.
Section 9.4 Termination by LMC. This Agreement may be terminated by LMC
at any time prior to the Effective Time (and the Merger shall thereupon be
abandoned) (a) in accordance with Section 7.6(k), (b) if there has been a
material breach by TNCL or NPAL of any material representation, warranty,
covenant or agreement set forth in this Agreement, which breach has not been
cured within 20 Business Days following receipt by TNCL of notice of such breach
from LMC or LTVGIA; provided, however, that the right to terminate this
-------- -------
Agreement pursuant to this clause 9.4(b) shall not be available to LMC if LMC,
at such time, is in material breach of any material representation, warranty,
covenant or agreement set forth in this Agreement or (c) the Merger shall not
have been consummated prior to January 27, 2002; provided, that the right to
--------
terminate this Agreement pursuant to this clause 9.4(c) shall not be available
to LMC to the extent that LMC's failure to fulfill its obligations under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date.
Section 9.5 Effect of Termination and Abandonment. In the event of
termination of this Agreement and abandonment of the Merger pursuant to this
Article IX, no party hereto (or any of its directors or officers) shall have any
liability or further obligation to any other party to this Agreement in respect
of this Agreement or the proposed Merger, except that nothing herein will
relieve any party from liability for any breach of this Agreement or its
obligations hereunder.
ARTICLE X
INDEMNIFICATION
---------------
Section 10.1 General Indemnification.
(a) TNCL and NPAL, jointly and severally, shall indemnify and
hold harmless LMC and LMC's Affiliates, successors and assigns and their
respective directors, officers, employees, shareholders, partners, trustees,
beneficial owners, representatives and attorneys in their capacity as such
(each, an "Indemnified LMC Person") from and against and with respect to, and
shall reimburse each Indemnified LMC Person for, any and all losses,
liabilities, obligations, Adjustments, damages, judgments, assessments, fines,
interest, penalties, costs and expenses (including reasonable attorneys' fees
and expenses) ("Losses") resulting from, based upon, arising out of or otherwise
in respect of, and all claims, actions, suits, proceedings, investigations or
demands ("Claims") incident or relating to or resulting from, (i) any untrue
representation, breach of warranty or breach or nonfulfillment of any covenant
or agreement of NPAL or TNCL contained in this Agreement or in any certificate
delivered pursuant hereto by NPAL or TNCL or (ii) the beneficial ownership (or
exercise of any rights of beneficial ownership) of the Gemstar Shares from and
after the Closing by TNCL, NPAL, or any of their respective successor or assigns
or the exercise by any of them of rights under the Gemstar Stockholders'
Agreement from and after May 2, 2001 (including, without limitation, as a result
of any of the foregoing directing LMC or its Affiliates to take any action
thereunder); provided, however, that neither TNCL nor NPAL shall be obligated to
-------- -------
indemnify the LMC Indemnified Persons under this Section 10.1(a) to the extent
that such Losses or Claims arise out of or are based upon any breach by LMC or
LTVGIA of any of their representations, covenants
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or agreements set forth herein or a breach by LMC of Section 8 of the Gemstar
Stockholders' Agreement.
(b) LMC shall indemnify and hold harmless TNCL and TNCL's
Affiliates, successors and assigns and their respective directors, officers,
employees, shareholders, partners, trustees, beneficial owners, representatives
and attorneys in their capacity as such (each, an "Indemnified TNCL Person")
from and against and with respect to, and shall reimburse each Indemnified TNCL
Person for, any and all Losses resulting from, based upon, arising out of or
otherwise in respect of, and all Claims incident or relating to or resulting
from, any untrue representation, breach of warranty or breach or nonfulfillment
of any covenant or agreement of LMC or LTVGIA contained in this Agreement or in
any certificate delivered pursuant hereto by LMC or LTVGIA; provided, however,
-------- -------
that LMC shall not be obligated to indemnify the Indemnified TNCL Persons under
this Section 10.1(b) to the extent that such Losses or Claims arise out of any
breach by TNCL or NPAL of any their representations, covenants or agreements set
forth herein.
Section 10.2 Third Party Action Indemnification Procedures. The procedure
for indemnification in the case of Third Party Actions shall be as follows:
(a) An Indemnified LMC Person or an Indemnified TNCL Person, as
the case may be (for purposes of this Section 10.2, Section 10.3 and Section
10.5, an "Indemnified Person") shall promptly give written notice to the
indemnifying party under Section 10.1(a) or (b), as applicable (for purposes of
this Section 10.2 and Section 10.5), an "Indemnifying Person") of any pending or
threatened Claim brought by a third party (a "Third Party Action"), which notice
will include, to the extent known, the factual basis for such Claim and copies
of any documents relating to such Claim. Such notice shall be given by the
Indemnified Person within five (5) Business Days after written notice of the
assertion or commencement of a Claim was delivered to the Indemnified Person,
but failure to give timely notice shall not affect the obligation of the
Indemnifying Person hereunder except to the extent that such failure actually
prejudices the Indemnifying Person in defending against any such Claim.
(b) If an Indemnified Person gives notice to the Indemnifying
Person of a Third Party Action, the Indemnifying Person shall be entitled to
participate therein and, if it so desires, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Person and, after notice from
the Indemnifying Person to the Indemnified Person of its election to assume the
defense thereof, except as provided below, the Indemnifying Person shall not be
liable to such Indemnified Person under this Section 10.2 for any fees of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnified Person in connection with the defense thereof, other than reasonable
costs of investigation. Notwithstanding the Indemnifying Person's election to
assume the defense of a Third Party Action, the Indemnified Person shall have
the right to employ separate counsel and to participate in the defense of such
Third Party Action, and the Indemnifying Person shall bear the reasonable fees,
costs and expenses of such separate counsel if: (i) the use of counsel chosen by
the Indemnifying Person to represent the Indemnified Person would, in the
reasonable determination of the Indemnified Person, present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such Third Party Action include both the Indemnifying Person and the
Indemnified Person, and the Indemnified Person shall have reasonably concluded
that there may be legal defenses available to it which are different from or
additional to those available to the
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Indemnifying Person (in which case the Indemnifying Person shall not have the
right to assume the defense of such claim on the Indemnified Person's behalf),
(iii) the Indemnifying Person shall not have employed counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of the Third Party Action, or (iv) the
Indemnifying Person shall authorize the Indemnified Person to employ separate
counsel at the Indemnifying Person's expense. If the Indemnifying Person assumes
the defense of a claim, no compromise or settlement thereof may be effected by
the Indemnifying Person without the Indemnified Person's written consent unless
(x) there is no finding or admission of any violation of Applicable Law and no
effect on any other Claims that may be made against or by the Indemnified Person
and (y) the sole relief provided is monetary damages that are to be paid in full
by the Indemnifying Person.
Section 10.3 Benefits of Indemnification. The provisions of this Article X
are intended to be for the benefit of, and shall be enforceable by, each
Indemnified Person and its successors in interest.
Section 10.4 Non-Exclusive Remedy. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable or common-law remedy any party may have for breach of representation,
warranty, covenant or agreement.
Section 10.5 Tax Effects of Indemnification.
(a) Any indemnification payment made under this Agreement between
TNCL, on the one hand, and LMC, on the other hand, shall be characterized for
tax purposes as if such payment were an adjustment to the consideration
transferred in exchange for LTVGIA Shares, except to the extent the laws of a
particular jurisdiction provide otherwise.
(b) The amount of any Losses or Claims for which indemnification
is provided under this Agreement shall be (i) increased to take account of the
net Tax cost, if any, incurred by the Indemnified Person arising from the
receipt or accrual of an amount an Indemnifying Person is required to pay to an
Indemnified Person under this Agreement ("Indemnity Payment") (grossed up for
such increase) and (ii) reduced to take account of the net Tax benefit, if any,
realized by the Indemnified Person arising from incurring or paying such Losses.
In computing the amount of any such Tax cost or Tax benefit, the Indemnified
Person shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt or
accrual of any Indemnity Payment hereunder or incurring or paying any
indemnified Losses or Claims. Any Indemnity Payment hereunder shall initially be
made without regard to this Section 10.5 and shall be increased or reduced to
reflect any such net Tax cost (including gross-up) or net Tax benefit only after
the Indemnified Person has actually realized such cost or benefit. For the
purposes of this Agreement, an Indemnified Person shall be deemed to have
"actually realized" a net Tax cost or a net Tax benefit to the extent that, and
at such time as, the amount of Taxes payable by such Indemnified Person is
increased above or reduced below, as the case may be, the amount of Taxes that
such Indemnified Person would be required to pay but for the receipt or accrual
of the Indemnity Payment or the incurrence or payment of such Losses, as the
case may be. The amount of any increase or reduction hereunder shall be adjusted
to reflect any Final Determination with respect to the Indemnified Person's
liability for Taxes, and payments between the applicable parties to reflect such
adjustment shall be made if necessary.
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ARTICLE XI
MISCELLANEOUS
-------------
Section 11.1 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements in this Agreement shall
survive the consummation of the Merger.
Section 11.2 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement (including fees and
expenses of legal counsel, investment bankers, brokers or other representatives
and consultants) shall be paid by the party incurring such expenses, except (i)
with respect to Losses for which a party is obligated to provide indemnity
pursuant to Article X and (ii) that all fees, costs and expenses related to the
obtaining of Governmental Consents or the making of Governmental Filings, or the
continued effectiveness of either, in any jurisdiction outside the United States
shall be paid by TNCL (other than any costs or expenses relating to the
continuation of the effectiveness of the Governmental Consent obtained pursuant
to the Treasurer Letter, which shall be borne by the party incurring such
expenses).
Section 11.3 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered the same agreement. Signature
pages from separate identical counterparts may be combined with the same effect
as if the parties signing such signature page had signed the same counterpart.
Section 11.4 Governing Law; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT THAT ANY PROVISIONS
REQUIRED TO BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE SHALL BE GOVERNED
THEREBY. Each of the parties hereto (i) will submit itself to the non-exclusive
jurisdiction of any federal court located in the States of Colorado or New York
or any Colorado or New York state court having subject matter jurisdiction in
the event any dispute arises out of this Agreement, (ii) agrees that venue will
be proper as to proceedings brought in any such court with respect to such a
dispute, (iii) will not attempt to deny or defeat such personal jurisdiction or
venue by motion or other request for leave from any such court and (iv) agrees
to accept service of process at its address for notices pursuant to this
Agreement in any such action or proceeding brought in any such court. TNCL
hereby appoints News America Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, as its authorized agent (the
"Authorized Agent") upon which process may be served in any action arising out
of or based upon this Agreement or the Merger that may be instituted in any
court by any party hereto and expressly consents to the jurisdiction of any such
court, but only in respect of any such action, and waives any other requirements
of or objections to personal jurisdiction with respect thereto. TNCL represents
and warrants that the Authorized Agent has agreed to act as said agent for
service of process, and TNCL agrees to take any and all action, including the
filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. If the
Authorized Agent shall cease to act as TNCL's agent for
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service of process, TNCL shall appoint without delay another such agent and
notify LMC of such appointment in the manner provided in Section 11.6 for the
giving of notices. With respect to any such action in the courts, service of
process upon the Authorized Agent in the manner provided in Section 11.6 for the
giving of notices (substituting the address set forth above in this Section
11.4(a)) and written notice of such service to TNCL given as provided in Section
11.6 shall be deemed, in every respect, effective service of process upon TNCL.
(b) EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION. THIS SECTION 11.4(b) HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.
Section 11.5 Specific Performance. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event of a
breach of this Agreement. Accordingly, each of the parties agrees that each
party shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement as a whole in any action instituted in any court of the U.S. or any
state thereof having jurisdiction over the parties and the matter, in addition
to any other remedy to which they may be entitled, at law or in equity.
Section 11.6 Notices. All notices and other communications hereunder shall
be in writing and shall be delivered by hand, mailed by registered or certified
mail (return receipt requested) or sent by prepaid overnight courier (with proof
of service) or confirmed facsimile transmission to the parties as follows (or at
such other addresses for a party as shall be specified by like notice), such
notice to be presumed effective (i) on receipt if delivered by hand or via
facsimile transmission, or (ii) on the next Business Day, if delivered by
overnight courier, or (iii) on the third Business Day following mailing, if
mailed (except that notice of change of address will not be deemed given until
received):
To LMC or (prior to the Closing) LTVGIA:
Liberty Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxxxxx, Esq.
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with a copy (which shall not constitute notice) to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxxxx X. XxXxxxx, Esq.
To TNCL or NPAL:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Squadron Ellenoff Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxx X. Xxxxxxxxx, Esq.
Section 11.7 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
Section 11.8 No Third Party Beneficiaries. This Agreement is not intended
to and shall not confer upon any Person other than the parties hereto any rights
or remedies hereunder or by reason hereof, except as provided in Article X
hereof.
Section 11.9 Binding Effect; Assignment. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by and against, the parties
and their respective successors and assigns; provided, however, that this
-------- -------
Agreement shall not, nor shall any of the rights or interests hereunder, be
assigned by any party hereto or be assignable by operation of law or otherwise
without the prior written consent of the other parties; provided, further,
-------- -------
however, that after the Closing, TNCL may, subject to compliance with Section
-------
7.6(i), assign its rights under this Agreement to any TNCL Subsidiary so long as
TNCL remains responsible for all of its obligations hereunder and, prior to or
after the Closing, LMC may, subject to compliance with Section 7.6(i), assign
its rights and obligations hereunder by operation of law or in connection with
the transfer of all or substantially all of its assets or may assign its rights
hereunder to any Subsidiary of LMC so long as LMC remains responsible for all of
its obligations hereunder.
Section 11.10 Headings. The headings contained in this Agreement are for
reference purposes and shall not affect in any way the meaning or interpretation
of this Agreement.
Section 11.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such
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invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Section 11.12 Further Assurances. Each of the parties hereto shall sign
and deliver, without additional consideration, such other documents of further
assurance as may reasonably be necessary to give effect to the provisions of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
LIBERTY TVGIA, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
NEWS PUBLISHING AUSTRALIA LIMITED
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Executive Vice President
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