Exhibit 4.10
ACQUISITION AGREEMENT
AMONG
NEPTUNE ONE HOLDINGS LTD.
MUNARO HOLDING B.V.
AND
NEW SKIES SATELLITES N.V.
DATED AS OF JUNE 5, 2004
Article I DEFINITIONS....................................................................................2
Section 1.01. Certain Defined Terms.............................................................2
Section 1.02. Other Defined Terms...............................................................9
Article II PURCHASE AND SALE OF THE ASSETS...............................................................11
Section 2.01. Purchase and Sale of Assets; Exclusion of Excluded Assets........................11
Section 2.02. Assumption of Assumed Liabilities; Retention of Retained Liabilities.............13
Section 2.03. Purchase Price; Allocation of Purchase Price.....................................13
Section 2.04. Stock Options; Restricted Stock..................................................14
Section 2.05. Closing..........................................................................15
Section 2.06. Closing Deliveries by Seller.....................................................15
Section 2.07. Closing Deliveries by Purchaser..................................................16
Section 2.08. Accounting; Endorsement of Checks................................................16
Section 2.09. Alternative Structure............................................................16
Article III REPRESENTATIONS AND WARRANTIES OF SELLER......................................................17
Section 3.01. Organization and Qualification; Capitalization; Subsidiaries.....................17
Section 3.02. Authority Relative to This Agreement.............................................19
Section 3.03. Regulatory Reports; Financial Statements.........................................20
Section 3.04. No Undisclosed Liabilities.......................................................21
Section 3.05. Absence of Changes...............................................................21
Section 3.06. Insurance........................................................................22
Section 3.07. Information Supplied.............................................................22
Section 3.08. Consents and Approvals; No Violations............................................23
Section 3.09. No Default.......................................................................24
Section 3.10. Litigation.......................................................................24
Section 3.11. Seller Material Contracts........................................................24
Section 3.12. Permits; Compliance with Applicable Laws.........................................26
Section 3.13. Employee Benefit Plans...........................................................27
Section 3.14. Labor Matters....................................................................28
Section 3.15. Environmental Matters............................................................28
Section 3.16. Taxes............................................................................29
Section 3.17. Intellectual Property............................................................30
Section 3.18. Seller Satellites................................................................30
Section 3.19. Related Party Transactions.......................................................31
Section 3.20. Brokers..........................................................................31
Section 3.21. Real Property....................................................................32
Section 3.22. Opinion of Financial Advisor.....................................................33
Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER........................................33
Section 4.01. Organization.....................................................................33
Section 4.02. Authority Relative to This Agreement.............................................33
Section 4.03. Consents and Approvals; No Violations............................................34
Section 4.04. Regulatory Matters...............................................................35
Section 4.05. Information Supplied.............................................................35
Section 4.06. Litigation.......................................................................35
Section 4.07. Interim Operations of Purchaser..................................................36
Section 4.08. Brokers..........................................................................36
Section 4.09. Financial Ability................................................................36
Section 4.10. Investigation by Parent and Purchaser............................................36
Article V COVENANTS RELATED TO CONDUCT OF BUSINESS......................................................37
Section 5.01. Conduct of Business of Seller....................................................37
Section 5.02. Access to Information............................................................40
Section 5.03. Parent Covenants.................................................................40
Article VI ADDITIONAL AGREEMENTS.........................................................................41
Section 6.01. Preparation of the Shareholder Circular..........................................41
Section 6.02. Board Actions and Shareholders Meeting...........................................41
Section 6.03. Reasonable Best Efforts..........................................................41
Section 6.04. Acquisition Proposals............................................................44
Section 6.05. Public Announcements.............................................................45
Section 6.06. Indemnification; Directors' and Officers' Insurance..............................45
Section 6.07. Notification of Certain Matters..................................................47
Section 6.08. Regulatory Filings...............................................................47
Section 6.09. Expenses.........................................................................48
Section 6.10. Financing........................................................................48
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Section 6.11. Further Assurances...............................................................49
Section 6.12. Seller Liquidation...............................................................49
Section 6.13. Ancillary Agreements.............................................................50
Section 6.14. Work-around Undertaking..........................................................50
Article VII EMPLOYEE MATTERS..............................................................................50
Section 7.01. Assignment by Operation of Law...................................................50
Section 7.02. Dutch Pension Plans..............................................................50
Section 7.03. Other Employees..................................................................51
Section 7.04. Works Council Advice.............................................................51
Article VIII TAX MATTERS...................................................................................52
Section 8.01. Transfer Taxes...................................................................52
Section 8.02. Tax Indemnification..............................................................52
Section 8.03. Procedures Relating to Indemnification of Tax Claims.............................53
Section 8.04. Filing of Tax Returns............................................................54
Section 8.05. Refunds and Credits..............................................................55
Section 8.06. Tax Information and Cooperation..................................................55
Section 8.07. Tax Ruling.......................................................................56
Article IX CLOSING CONDITIONS............................................................................56
Section 9.01. Conditions to Each Party's Obligations...........................................56
Section 9.02. Conditions to the Obligations of Parent and Purchaser............................57
Section 9.03. Conditions to the Obligations of Seller..........................................59
Article X TERMINATION; AMENDMENT; WAIVER................................................................59
Section 10.01. Termination by Mutual Agreement..................................................59
Section 10.02. Termination by Either Parent or Seller...........................................59
Section 10.03. Termination by Seller............................................................60
Section 10.04. Termination by Parent............................................................61
Section 10.05. Effect of Termination and Abandonment............................................61
Section 10.06. No Rescission....................................................................62
Section 10.07. Amendment........................................................................62
Section 10.08. Extension; Waiver................................................................63
Article XI MISCELLANEOUS.................................................................................63
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Section 11.01. Nonsurvival of Representations and Warranties....................................63
Section 11.02. Entire Agreement; Assignment; Transfer...........................................63
Section 11.03. Notices..........................................................................64
Section 11.04. Governing Law....................................................................65
Section 11.05. Descriptive Headings.............................................................66
Section 11.06. Parties in Interest..............................................................66
Section 11.07. Severability.....................................................................66
Section 11.08. Enforcement; Jurisdiction........................................................66
Section 11.09. Counterparts.....................................................................66
Section 11.10. Interpretation...................................................................66
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of June 5, 2004 (this
"AGREEMENT"), is among Neptune One Holdings Ltd., a Cayman Islands exempted
company ("PARENT"), Munaro Holding B.V., a company organized under the laws of
The Netherlands, and a wholly-owned subsidiary of Parent ("PURCHASER"), and New
Skies Satellites N.V., a public limited liability company (naamloze
vennootschap) organized under the laws of The Netherlands, with a corporate seat
in The Hague ("SELLER" and, together with Parent and Purchaser, the "PARTIES").
WHEREAS, Seller is principally engaged in the business of providing
satellite communications services through a network of geostationary earth orbit
satellites and a communications network for data, voice, video, and Internet
services and ground based infrastructure supporting the satellite network and
the communications network (the "BUSINESS");
WHEREAS, Seller wishes to transfer to Purchaser, and Purchaser wishes
to purchase the Assets and assume the Assumed Liabilities (each as defined
below) from Seller, all upon the terms and subject to the conditions set forth
herein;
WHEREAS, as soon as practicable following the consummation of the
transactions contemplated by this Agreement, Seller intends to distribute all of
its assets, including the Purchase Price (as defined below), to its shareholders
in the form of repayment of capital (including share premium), a dividend, a
provisional and/or final liquidation distribution (together, the
"DISTRIBUTION"), request the delisting of Seller ordinary shares, nominal value
(euro)0.05 per share (the "Seller Shares") and Seller's American Depositary
Shares from the Euronext Amsterdam N.V. exchange ("EURONEXT") and the New York
Stock Exchange, Inc. (the "NYSE"), respectively, and dissolve and liquidate its
assets (the "SELLER LIQUIDATION");
WHEREAS, each of the Management Board of Seller (the "MANAGEMENT
BOARD") and the Supervisory Board of Seller (the "SUPERVISORY BOARD" and,
together with the Management Board, the "SELLER BOARDS") has unanimously
determined after taking into account the interests of employees and other
stakeholders of Seller that this Agreement and the transactions contemplated
hereby, including the Distribution and the Seller Liquidation, are reasonable,
proper and advisable and are fair to, and in the best interests of Seller, the
Business, Seller's shareholders and Seller's other stakeholders;
WHEREAS, the Parties have complied with the Dutch Merger Code (SER
Fusiecode 2000) and filed a notification of the intended transaction with the
SER (as defined below); and
WHEREAS, Seller consulted and received advice from its interim works
council with respect to this Agreement;
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NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, Seller, Parent and Purchaser hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ACQUISITION PROPOSAL" means any inquiry, offer or proposal to Seller
(including any proposal from or offer to Seller's shareholders) regarding any of
the following (other than the transactions contemplated by this Agreement): (i)
any merger, reorganization, tender offer, exchange offer, consolidation, share
exchange, recapitalization, business combination, liquidation, dissolution,
joint venture or other similar transaction involving Seller or any of its
Subsidiaries or (ii) any acquisition by a third party of more than 10% of the
capital stock of Seller or more than 10% of the consolidated assets of Seller
and its Subsidiaries (except, in the case of (i) and (ii), as permitted by
Section 5.01 of this Agreement).
"ACTION" means claim, action, suit, arbitration, inquiry, proceeding or
investigation.
"AFFILIATE" of a specified Person is a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified.
"ANCILLARY AGREEMENTS" means the agreements and other instruments
required to transfer the Assets and assign the Assumed Liabilities to Purchaser
pursuant to this Agreement.
"ANTITRUST LAW" means applicable antitrust Laws in The Netherlands
(including the Mededingingswet), the European Union (including Regulation
4064/89 concerning the control of concentrations between undertakings, as
amended), the United States (including the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act and the Federal Trade Commission Act, as amended)
and all other Laws in any jurisdiction that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition through merger
or acquisition.
"BACKLOG" means the aggregate unpaid amount owing to Seller or any of
its Subsidiaries under all Contracts that represent obligations of third parties
to make payments to Seller or any of its Subsidiaries in exchange for the sale
or lease of transponder capacity or related services.
"BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" with respect to any
securities means having beneficial ownership of such securities (as determined
pursuant to Rule 13d-3
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under the Exchange Act, disregarding the phrase "within 60 days" in paragraph
(d)(1)(i) thereof), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all Affiliates of such Person.
"BUSINESS DAY" shall mean any day, other than a Saturday, Sunday or one
on which banks are authorized by Law to close in The Hague, The Netherlands or
New York, New York, the United States.
"CODE" means, the United States Internal Revenue Code of 1986, as
amended.
"CONTRACT" means any written agreement, contract, subcontract, lease,
indenture, note, bond, option, license, sublicense, insurance policy or legally
binding commitment or undertaking of any nature.
"CREDIT AGREEMENT" means the $300 Million Multi-currency Loan Agreement
between Neptune and ABN AMRO Bank N.V. as Arranger, Agent and Original Lender
and the banks named therein, dated August 4, 2000.
"DUTCH GAAP" means generally accepted accounting principles in The
Netherlands.
"DUTCH MERGER CODE" means SER-besluit Fusiegedragsregels 2000 ter
bescherming van de belangen van werknemers (SER Fusiecode 2000), issued by the
SER on March 17, 2000.
"EMPLOYEE" means any current or former employee of Seller (or any
predecessor of Seller) employed or formerly employed by Seller (or any
predecessor of Seller) or any of its Subsidiaries.
"ENVIRONMENTAL LAWS" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including common law) of any Governmental Authority
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health.
"ENVIRONMENTAL LIABILITIES" with respect to any Person means any and
all Liabilities of or relating to such Person or any of its Subsidiaries
(including any entity which is, in whole or in part, a predecessor of such
Person or any of such Subsidiaries), which (i) arise under applicable
Environmental Laws or with respect to Hazardous Materials, and (ii) relate to
actions occurring, or conditions existing, on or prior to the Closing Date.
"ENVIRONMENTAL PERMITS" means any and all permits, consents, licenses,
orders, approvals, registrations, notifications, variances, exemptions and any
other authorization under or pursuant to any applicable Environmental Law.
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"ENVIRONMENTAL REPORTS" means any and all reports, studies,
assessments, audits, and other similar documents that address any issue of
actual or potential non-compliance with, actual or potential liability under or
cost arising out of, or actual or potential impact on the Business in connection
with, any Environmental Law or any proposed or anticipated change in or addition
to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"EXON-XXXXXX" means Section 721 of Title VII of the Defense Production
Act of 1950, as amended by the Omnibus Trade and Competitiveness Act of 1988.
"EXPENSES" means all out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a Party and its Affiliates) incurred by a Party or on its behalf in connection
with, or related to, the authorization, preparation, negotiation, execution and
performance of this Agreement, the Ancillary Agreements and the transactions
contemplated hereby and thereby, including the preparation, printing and mailing
of the Shareholder Circular and the solicitation of shareholder approvals and
all other matters related to the transactions contemplated hereby.
"FEDERAL ACQUISITION REGULATIONS" means the rules governing purchases
made by executive agencies of the United States government.
"GOVERNMENTAL AUTHORITY" means any multinational, national, state,
provincial or local authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or
organization, or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing in
The Netherlands, the European Union, the United States or any other country.
"GOVERNMENT CONTRACT" means any Contract (i) between Seller or any of
its Subsidiaries and the federal government of the United States or any agency
thereof or (ii) which, to Seller's Knowledge, is between Seller or any of its
Subsidiaries and another party which, to Seller's Knowledge, is party to a
Contract with the federal government of the United States or any agency thereof
under which Seller or any of its Subsidiaries acts as subcontractor to such
other party and is obligated pursuant to any contractual flow-down provisions to
abide by any government contracting regulations, including the Federal
Acquisition Regulations, that are applicable to the principal contractor.
"HAZARDOUS MATERIALS" means any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity,
and any other substances of any kind, whether or not any such substance is
defined as hazardous or toxic under any
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Environmental Law, that is regulated pursuant to or would give rise to liability
under any applicable Environmental Law.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 and the rules and regulations thereunder, as amended from time to time.
"INDEBTEDNESS" means (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, notes, debentures or other similar instruments
or by letters of credit, including purchase money obligations or other
obligations relating to the deferred purchase price of property (other than
trade payables incurred in the ordinary course of business), (c) Liabilities of
Persons other than Seller and its Subsidiaries secured by a Lien (other than a
Permitted Lien) on any asset of Seller or any of its Subsidiaries, (d) under or
in respect of letters of credit and bank guarantees (including reimbursement
obligations with respect thereto), (e) Liabilities under any sale and leaseback
transaction, any synthetic lease or tax ownership operating lease transaction or
any other transaction which is the functional equivalent of or takes the place
of borrowing but which does not constitute a liability on the balance sheet, (f)
Liabilities under interest rate cap agreements, interest rate swap agreements,
foreign currency exchange agreements and other hedging or similar agreements,
(g) Liabilities in the nature of guarantees of obligations of the type described
in the foregoing clauses of any other Person, and (h) accrued interest,
prepayment penalties or premiums, breakage fees and all other amounts owed in
respect of any of the foregoing.
"INTELLECTUAL PROPERTY" means trademarks, service marks, brand names,
certification marks, domain names, trade dress and other indications of origin,
the goodwill associated with the foregoing and registrations in any jurisdiction
of, and applications in any jurisdiction to register, the foregoing, including
any extension, modification or renewal of any such registration or application;
patents, patent applications, inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction, and all continuations, continuations in
part, divisionals, re-examinations, re-issues and similar rights relating
thereto; know-how, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person; copyrights,
copyrightable works, writings and other works, whether copyrightable or not, in
any jurisdiction; registrations or applications for registration of copyrights
in any jurisdiction, and any renewals or extensions thereof; and all other
intellectual property or proprietary rights in any country or jurisdiction,
including the right to register, patent or apply for other legal protection of
same and the right to xxx at law or in equity for any infringement or violation
of the foregoing prior to the Closing Date, and to collect all proceeds and
damages with respect thereto.
"KNOWLEDGE OF SELLER" or "SELLER'S KNOWLEDGE" means the actual
knowledge of any of the individuals listed in Section 1.01(a) of the Seller
Disclosure Schedule.
"LAW" means any multinational, national, state, provincial or local
law, statute, ordinance, regulation, rule, code or other requirement or rule of
law or stock exchange rule, including any order, writ, judgment, ruling,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
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"LIABILITY" means any Indebtedness, liability or obligation, whether
accrued or fixed, absolute or contingent, matured or unmatured, determined or
undeterminable or known or unknown, including those arising under any Law or
Action and those arising under any Contract, commitment, obligation or
undertaking or otherwise.
"LIEN" means, with respect to any asset (including any security) any
mortgage, lien, pledge, attachment, charge, limitation in voting, dividend or
transfer right, security interest, preemptive right, easement, right-of-way,
restriction, usufruct, option or encumbrance of any kind in respect of such
asset.
"LOSSES" means all losses, claims, damages, liabilities, fees and
expenses (including attorneys' fees and disbursements), judgments, fines and
amounts paid in settlement.
"MATERIAL ADVERSE EFFECT" means one or more events, changes,
circumstances or effects that is materially adverse to (a) the assets,
liabilities, operations, business, results of operations or financial condition
of Seller and its Subsidiaries taken as a whole or (b) the ability of Seller to
consummate the transactions contemplated by this Agreement, provided, however,
that any event, change, circumstance or effect (A) in any Law that applies to
Seller or its Subsidiaries (except to the extent such event, change,
circumstance or effect has a disproportionate effect on Seller and its
Subsidiaries as compared to other persons in the industry in which Seller and
its Subsidiaries operate and which have a comparable lines of business), (B) in
Dutch GAAP or U.S. GAAP or interpretations thereof that apply to Seller or its
Subsidiaries, (C) relating to the economies where Seller and its Subsidiaries
conduct the Business in general or to the industries in which Seller and its
Subsidiaries operate (except to the extent such event, change, circumstance or
effect has a disproportionate effect on Seller and its Subsidiaries as compared
to other persons in the industry in which Seller and its Subsidiaries operate
and which have a comparable lines of business), or (D) attributable to the
compliance by Seller with the terms of this Agreement, shall not be considered
when determining whether a Material Adverse Effect has occurred under clause (a)
of this definition.
"NMA" means the Netherlands Competition Authority (Nederlandse
Mededingingsautoriteit)
"OPENING TAX BALANCE SHEET" means the balance sheet prepared by the
Seller reflecting the Tax basis for Dutch corporate income tax purposes of the
assets contributed to the Seller on November 30, 1998 and submitted to the Dutch
Tax authorities.
"OPTION AGREEMENT" means the Option Agreement Regarding the Issuance
and Subscription of Preference Shares in the Share Capital of Seller, between
Seller and Stichting Preferente Aandelen Seller, a foundation organized under
the laws of The Netherlands, executed on or about June 28, 2000.
"ORDER" means any order, writ, judgment, ruling, injunction, decree,
stipulation, determination or award.
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"PARENT SIGNIFICANT SUBSIDIARY" means any Subsidiary of Parent that
holds, directly or indirectly, any equity interest in Purchaser.
"PERMITS" means all permits, licenses, concessions, variances,
exemptions, orders, authorizations, permissions and approvals from or with any
Governmental Authority.
"PERMITTED LIENS" means the following Liens: (a) Liens for Taxes not
yet due or that are being contested in good faith; (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics, materialmen and other
Liens imposed by Law, in each case, for amounts not yet due; (c) Liens incurred
or deposits made in the ordinary course of business in connection with worker's
compensation, unemployment insurance or other types of social security; (d)
Liens that do not materially interfere with the use by Seller or its
Subsidiaries of the Assets or with the operation of the Business; (e) Liens not
created by Seller or any of its Affiliates that affect any rights of the tenant
under the real property leases of Seller or the fee interest in any of the real
property of Seller, so long as such Liens do not interfere materially with the
ordinary course of business; (f) licenses granted to third Persons under the
Intellectual Property, (g) Liens created by or through Purchaser; (h) Liens that
will be released prior to or as of the Closing, (i) Liens arising under this
Agreement or the Ancillary Agreements and (j) Liens disclosed in the Seller SEC
Reports.
"PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
natural or legal person, entity or group (as "group" is defined in the Exchange
Act or Book 2 of the Dutch Civil Code).
"POST-CLOSING TAX PERIOD" means any taxable period beginning after the
Closing Date and, with respect to any Straddle Period, the portion of such
Straddle Period beginning after the Closing Date.
"PRE-CLOSING TAX PERIOD" means any taxable period ending on or before
the Closing Date and, with respect to any Straddle Period, the portion of such
Straddle Period ending on the Closing Date.
"SELLER MATERIAL CONTRACT" means:
(i) any "material contracts" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) with respect to
Seller;
(ii) any material Contract evidencing any Indebtedness;
(iii) any non-competition agreement or any other Contract which
limits or purports to limit materially the ability of
Seller or its Subsidiaries to compete or engage in any line
of business;
(iv) any partnership agreements, limited liability agreements,
joint venture agreement or similar agreements to which
Seller or any of
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its Subsidiaries is a party, in each case involving an
investment by Seller in excess of U.S.$1 million;
(v) any Contract for the acquisition or disposition, directly
or indirectly (by merger or otherwise) of assets or capital
stock or other equity interests of another Person for
aggregate consideration in excess of U.S.$3 million;
(vi) any Contract containing a right of first refusal, first
negotiation, "tag along" or "drag along" rights applicable
to any capital stock of any Subsidiary of Seller or assets
of Seller or any of its Subsidiaries valued in excess of
U.S.$1 million;
(vii) any contract for the construction of satellites requiring
payments by Seller after the date hereof in excess of
U.S.$1 million;
(viii) any Contract containing financial incentive arrangements
for equipment manufacturers, in each case involving an
amount in excess of U.S.$3 million;
(ix) any real property deeds or leases involving aggregate
annual payments by Seller in excess of U.S.$1 million;
(x) any customer Contract, which as of March 31, 2004, requires
aggregate payments by the customer or Seller or any
Subsidiary of Seller in excess of U.S.$3 million during the
remaining term of such Contract;
(xi) any Government Contracts;
(xii) any Contract outside the ordinary course of business
involving expenditures, liabilities or revenues reasonably
expected to be in excess of U.S.$1 million;
(xiii) any Contract involving any material payment to any present
director or executive officer of Seller or of any of its
Subsidiaries;
(xiv) any material contract the subject matter of which deals
exclusively with the ownership, acquisition, licensing, use
or disposition of Intellectual Property; and
(xv) any Contract with any shareholder who owns or controls 5%
or more of Seller's voting stock.
"SER" means the Dutch Sociaal-Economische Raad.
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"SHAREHOLDER CIRCULAR" means a document as meant in best practice rule
IV.3.7 of the Netherlands Corporate Governance Code (code tabaksblat) prepared
by the Seller Boards to inform the Seller Shareholders Meeting including all
facts and circumstances relevant in respect of the approval of this Agreement
and the transactions contemplated hereby.
"STRADDLE PERIOD" means any taxable period that begins on or before and
ends after the Closing Date.
"SUBSIDIARY" means, when used with reference to any entity, any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such Party or any other subsidiary of such Party is a general or
managing partner (including a beherend vennoot or besturend vennoot), (ii)
twenty percent or more of the outstanding voting securities or interests of
which is directly or indirectly owned or controlled by such Party or by any one
or more of its subsidiaries or (iii) with respect to which such Party or any
other subsidiary of such Party has the right, according to law or agreement, to
appoint more than one fifth of the directors of the board of directors or the
management or supervisory board.
"TAXES" means all taxes, charges, fees, levies or other assessments,
including Dutch and foreign, national, state and local income (including any
surtax), franchise, property, turn-over, sales, value-added, use, excise,
capital, stamp and other taxes, including obligations for withholding taxes from
payments due or made to any other Person, as well as any contribution to any
social security scheme, and any interest, penalties and additions to Tax.
"TAX RETURNS" means all Dutch and foreign, national, state and local
Tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
"TRANSFER TAXES" mean all goods, services, sales, use, real or personal
property, gross receipt, documentary, value-added, stamp and all other similar
Taxes or other like charges, together with interest, penalties or additional
amounts imposed with respect thereto, provided that, for the avoidance of doubt,
any income or capital gains taxes withheld pursuant to Section 2.03(c) shall not
be considered a Transfer Tax.
"U.S. GAAP" means generally accepted accounting principles in the
United States.
Section 1.02. Other Defined Terms. The following terms have the
meanings defined for such terms in the Sections set forth below:
Term Section
---- -------
AFM 3.03(a)
Agreement Preamble
Assets 2.01(a)
Assignee 11.02(b)
Assumed Liabilities 2.02(a)
AT 3.08(a)
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Business Recitals
Cash Dividend 3.05(a)(i)
CFIUS 3.08(a)
Closing 2.05
Closing Date 2.05
Communications Act 3.08(a)
Confidentiality Agreement 5.02(b)
Controlled Group 3.13(b)
DCC 7.01
Debt Financing 4.09(a)
Debt Financing Commitment Letter 4.09(a)
Distribution Recitals
Dutch Permits 3.12
Equity Financing 4.09(b)
Equity Financing Commitment Letter 4.09(b)
Euronext Recitals
Excluded Assets 2.01(b)
FCC 3.08(a)
Financing 4.09(b)
Financing Preferred Shares 3.01(e)
Governance Preferred Shares 3.01(e)
Health Status Reports 3.18(a)
Indemnified Parties 6.06(a)
Insurance Policy 3.06
ITU 3.18(b)
Joint Tax Proceeding 8.03(d)
Leased Property 2.06(c)
Liquidator 3.02(b)
Major Stations 3.18(c)
Management Board Recitals
Material Backlog Contracts 3.11(b)
NYSE Recitals
Other Employees 7.03
Owned Property 2.06(c)
Parent Preamble
Parent Disclosure Schedule Article IV
Parent Required Approvals 4.03(a)
Parties Preamble
Permitted Transferee 11.02(c)
Proposed Settlement 8.03(d)
Purchase Price 2.03(a)
Purchaser Preamble
Purchaser Pension Plan 7.02
Purchaser Pension Provider 7.02
Representatives 6.04(a)
Required Seller Vote 3.02(b)
14
Retained Cash Amount 2.01(b)(v)
Retained Liabilities 2.02(b)
Revised Confidentiality Terms 6.04(a)
SEC 3.03(a)
Seller Preamble
Seller Articles 3.02(b)
Seller Boards Recitals
Seller Disclosure Schedule Article III
Seller Financial Statements 2.01(a)(i)
Seller Ground Stations 3.18(c)
Seller Liquidation Recitals
Seller Pension Plan 7.02
Seller Pension Provider 7.02
Seller Permits 3.12
Seller Plan 3.13(a)
Seller Regulatory Reports 3.03(a)
Seller Required Approvals 3.08(a)
Seller Restricted Share 2.04(b)
Seller Restricted Stock Plans 2.04(b)
Seller Satellites 3.18(a)
Seller SEC Reports 3.03(a)
Seller Securities 3.01(e)
Seller Shareholders Meeting 3.02(b)
Seller Shares Recitals
Seller Stock Option 2.04(a)
Seller Stock Option Plans 2.04(a)
Seller Subsidiary Securities 3.01(f)
Superior Proposal 6.04(a)
Supervisory Board Recitals
Target Subsidiaries 2.09(a)
Tax Proceeding 8.03(a)
Trade Register 3.03(a)
Transferred Seller Employees 7.01(a)
ARTICLE II
PURCHASE AND SALE OF THE ASSETS
Section 2.01. Purchase and Sale of Assets; Exclusion of Excluded
Assets. (a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing, Seller shall sell, transfer, deliver, convey and
assign to Purchaser, and Purchaser shall purchase and accept from Seller, all of
Seller's right, title and interest in any and all assets of Seller, in each case
excluding the Excluded Assets (the "ASSETS"), free and clear of all Liens other
than Permitted Liens, including:
15
(i) all assets reflected on the audited balance sheet of Seller
as at December 31, 2003 and all assets used to generate
revenue and income reflected on the audited statement of
income and cash flows of Seller for the fiscal year ended
December 31, 2003, in each case as set forth in Section
2.01(a)(i) of the Seller Disclosure Schedule (collectively,
the "SELLER FINANCIAL STATEMENTS"), other than, in each
case, assets disposed of after December 31, 2003 and on or
prior to the Closing;
(ii) all assets acquired by Seller after December 31, 2003 and
on or prior to the Closing;
(iii) Seller's rights under all real property deeds and leases to
which Seller is a party;
(iv) Seller's rights under all Contracts, commitments or
undertakings to which Seller is a party, other than this
Agreement and the Ancillary Agreements;
(v) all of Seller's rights to any Intellectual Property;
(vi) all of Seller's rights under any licenses from third
parties other than Governmental Authorities;
(vii) all Permits to the extent transferable under applicable
Law;
(viii) all Environmental Permits of Seller;
(ix) all cash and cash equivalents, accounts receivable and
other current assets of Seller (including any cash
designated for distribution in respect of any Seller Shares
which Seller has a legal right to retain by reason of any
Lien on such Seller Shares for the benefit of Seller);
(x) all stock or equity interests in any Person;
(xi) all books and records, including any and all data and
records pertaining to Employees;
(xii) all rights to refunds of Taxes, other than refunds of Taxes
that relate (A) to a Post-Closing Tax Period and are
unrelated to the Business and the Assets, (B) to any
withholding tax or surtax paid in connection with the
Distribution or Seller Liquidation, (C) to any corporate
income tax or capital gains tax paid in connection with the
transfer of the Assets and the Assumed Liabilities, (D) to
16
any Taxes paid with respect to the termination of Seller's
fiscal unity with its Dutch Affiliates or (E) Taxes that
result from a carry-back of Tax losses from a Post-Closing
Tax Period to a Pre-Closing Tax Period, provided that, any
and all refunds of Taxes described in (A) - (E) above
resulting from the utilization of a deduction , credit or
other Tax benefit arising in a Pre-Closing Tax Period shall
constitute Assets; and
(xiii) all ownership or other rights of Seller with respect to
assets relating to any benefit plan, program, arrangement
or any other Liability assumed by Purchaser pursuant to
Article VII (including the assets of any trust established
to fund any employee benefit plan).
(b) Seller shall retain its respective right, title and interest in and
to, and Purchaser and its Affiliates shall have no rights with respect to,
the following assets (such assets listed in clauses (i) through (iv), the
"EXCLUDED ASSETS"):
(i) the minute books, stock ledgers and Tax records, including
related administration and correspondence, of Seller, as
well as all other books and records required by Law in
connection with the Distribution and the Seller Liquidation
(provided that Seller shall provide to Purchaser copies of
all such documents that Purchaser may reasonably request);
(ii) the Purchase Price, any payments of Transfer Taxes to
Seller pursuant to Section 2.03(a) and all rights to
refunds of Taxes that relate (A) to a Post-Closing Tax
Period and are unrelated to the Business and the Assets,
(B) to any withholding tax or surtax paid in connection
with the Distribution or Seller Liquidation, (C) to any
corporate income tax or capital gains tax paid in
connection with the transfer of the Assets and the Assumed
Liabilities, (D) to any Taxes paid with respect to the
termination of Seller's fiscal unity with Dutch Affiliates
and (E) Taxes that result from a carry-back of Tax losses
from a Post-Closing Tax Period to a Pre-Closing Tax Period,
provided that, any and all refunds of Taxes described in
(A) - (E) above resulting from the utilization of a
deduction , credit or other Tax benefit arising in a
Pre-Closing Tax Period shall not constitute Excluded
Assets;
(iii) any Seller Shares held in the treasury of Seller;
(iv) all rights of Seller under this Agreement and the Ancillary
Agreements; and
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(v) a cash amount, not to exceed the lesser of U.S.$900,000 or
the amount that Seller determines is reasonably required to
pay expenses in connection with the Distribution and the
Seller Liquidation (the "RETAINED CASH AMOUNT").
Section 2.02. Assumption of Assumed Liabilities; Retention of Retained
Liabilities. (a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing, Purchaser shall assume and become obligated to pay,
perform and discharge when due, and shall thereafter indemnify Seller and hold
Seller harmless against, any and all Liabilities of Seller other than the
Retained Liabilities (the "ASSUMED LIABILITIES").
(b) Seller shall retain, and shall be fully responsible for paying,
performing and discharging when due, and shall thereafter indemnify
Purchaser and hold Purchaser harmless against, and neither Purchaser nor any
of its Affiliates shall assume or have any responsibility for (i) any Taxes
that may be payable by Seller solely as a result of the consummation of the
transactions contemplated by this Agreement (including any withholding tax
or surtax resulting from the Distribution, any corporate income and/or
capital gains tax resulting from the transfer of the Assets and the Assumed
Liabilities and any Taxes resulting from the termination of Seller's fiscal
unity with its Affiliates), except as provided in Section 8.01, (ii) any
Liability under the Seller Stock Options or the Seller Restricted Shares or
any Liability accrued prior to the Closing under the Seller Stock Option
Plans, the Option Agreement or the Seller Restricted Stock Plan, (iii) any
Liability arising in connection with the Distribution and the Seller
Liquidation in excess of the Retained Cash Amount and (iv) any Liability of
Seller that (A) arises and that relates to matters occurring solely after
the Closing, (B) is not attributable, directly or indirectly, to the
consummation of the transactions contemplated by this Agreement, and (C) is
not the result of compliance by Seller with the terms of this Agreement
(such Liabilities, the "RETAINED LIABILITIES").
Section 2.03. Purchase Price; Allocation of Purchase Price. (a) At the
Closing, Purchaser shall pay to Seller a cash amount equal to U.S.$956,099,550
plus the aggregate cash amount received after the date hereof by Seller in
connection with the exercise of Seller Stock Options and Seller Restricted
Shares, minus any taxes withheld pursuant to Section 2.03(c), minus the
aggregate cash amount paid after the date hereof by Seller to redeem or
repurchase any Seller Shares, Seller Restricted Shares or Seller Stock Options
or in respect of any dividend or distribution on Seller Shares declared after
the date hereof (the "PURCHASE PRICE") plus the Transfer Taxes payable by Seller
or any of its Affiliates as a result of the consummation of the transactions
contemplated by this Agreement, in immediately available funds to one or more
bank accounts designated by Seller no later than two (2) Business Days before
the Closing.
(b) Seller and Purchaser shall jointly prepare an allocation of the sum
of the Purchase Price and the Assumed Liabilities among the Assets and the
Business and the statutory jurisdictions in which the Assets reside in a
schedule to be completed on or
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prior to the Closing Date. Each of Purchaser and Seller shall report the
income and other tax consequences of the transactions contemplated by this
Agreement in a manner consistent with such allocation. Except as otherwise
required by applicable Law, neither Purchaser nor Seller shall take a
position inconsistent with such allocations on any Tax Return or similar
filing. Each of Seller and Purchaser shall reasonably cooperate with the
other in preparing for filing any statements required by any Governmental
Authority charged with the collection of any income Tax, including Dutch
Corporate Income and other Tax forms and filings related to the transactions
contemplated by this Agreement, a reasonable period before its filing due
date. If Seller and Purchaser cannot agree on a joint allocation within 30
Business Days following the Closing Date, Purchaser and Seller shall refer
the matter for resolution to independent accountants, the decision of which
shall be binding on Seller and Purchaser. The costs, fees and expenses of
the independent accountants shall be borne by (1) Seller if the net
resolution of the disputed items favors Purchaser, (2) Purchaser if the net
resolution of the disputed items favor Seller, and (3) otherwise equally by
Purchaser and Seller.
(c) The Purchaser shall withhold and pay to the applicable Taxing
authority any income or capital gains withholding taxes required to be
withheld on Purchase Price payments with respect to the transactions
contemplated by the Agreement.
Section 2.04. Stock Options; Restricted Stock. (a) On or before the
Closing Date, Seller shall use its reasonable best efforts to cancel or procure
the cancellation, effective on the Closing Date, of each option to purchase
Seller Shares granted to employees, directors, including members of the
Supervisory Board, or independent contractors of Seller or any of its
Subsidiaries under the stock option plans set forth in Section 2.04(a) of the
Seller Disclosure Schedule (the "SELLER STOCK OPTION PLANS") that is outstanding
immediately prior to the Closing Date (each, a "SELLER STOCK OPTION"). The
holder of each such Seller Stock Option, without any action on the part of such
holder and in full consideration of such cancellation, shall be entitled to
receive from Seller, at the time of the Distribution, an amount in cash (less
any applicable withholding Taxes) with respect to each Seller Share issuable
with respect to such Seller Stock Option (whether or not vested or exercisable)
equal to the excess, if any, of the amount distributed with respect to each
Seller Share in the Distribution over the exercise price per share of such
Seller Stock Option and shall have no further rights with respect to such Seller
Stock Option.
(b) On or before the Closing Date, Seller shall use its reasonable best
efforts to cancel or procure the cancellation, effective on the Closing
Date, of each outstanding restricted Seller Share (a "SELLER RESTRICTED
SHARE") (whether or not vested or exercisable) granted under the restricted
stock plans set forth in Section 2.04(b) of the Seller Disclosure Schedule
(the "SELLER RESTRICTED STOCK PLANS"). The holder of each such Seller
Restricted Share, without any action on the part of such holder and in full
consideration of such cancellation, shall be entitled to receive from
Seller, at the time of the Distribution, an amount in cash (less any
applicable withholding Taxes) with respect to each Seller Restricted Share
(whether or not vested or exercisable) equal to the excess,
19
if any, of the amount distributed with respect to each Seller Share in the
Distribution over the exercise price of such Seller Restricted Share and
shall have no further rights with respect to such Seller Restricted Share.
(c) Prior to the Closing Date, Seller shall make or procure any
amendments to the terms of such Seller Stock Option Plans and any related
stock option agreements and the Seller Restricted Stock Plans and any
related restricted stock agreements that are necessary to give effect to the
transactions contemplated by this Section 2.04 and to terminate or procure
the termination of such plans and agreements.
Section 2.05. Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Assets pursuant to Section 2.01, and the
assumption of the Assumed Liabilities pursuant to Section 2.02, as contemplated
hereby shall take place at a closing (the "CLOSING") to be held at 10:00 a.m.,
Central European Time, two Business Days after the satisfaction or waiver of all
conditions to the obligations of the parties set forth in Article IX (other than
conditions to be satisfied at the Closing, but subject to the satisfaction or
waiver of such conditions), at the offices of De Brauw Blackstone Westbroek
located at Xxxxxxxxxxxxxxxxx 000, 0000 XX Xxxxxxxxx, Xxx Xxxxxxxxxxx or at such
other time or on such other date or at such other place as Seller and Purchaser
may mutually agree upon in writing (the day on which the Closing takes place
being the "CLOSING Date"). The Closing shall be deemed effective as of 12:01
a.m., Central European Time, on the Closing Date.
Section 2.06. Closing Deliveries by Seller. At the Closing, Seller
shall deliver or cause to be delivered to Purchaser:
(a) subject to Section 6.14, a counterpart of each of the Ancillary
Agreements, executed by Seller;
(b) a receipt for the Purchase Price and any Transfer Taxes payable
pursuant to Section 2.03(a);
(c) subject to Section 6.14, each of the following documents, executed
by Seller: instruments of assignment with respect to all of Seller's right,
title and interest in any material real property which Seller leases or
subleases (the "LEASED PROPERTY") and bargain and sale deeds (or equivalent
deeds) required in the relevant jurisdiction with respect to all of Seller's
right, title and interest in the material real property owned in fee by
Seller (the "OWNED PROPERTY"), in each case in recordable form sufficient to
convey or transfer to Purchaser all of Seller's right title and interest in
and to the Owned and Leased Property; and
(d) any documents required pursuant to Sections 3.08 and 6.11.
Section 2.07. Closing Deliveries by Purchaser. At the Closing,
Purchaser shall deliver to Seller:
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(a) the Purchase Price and any Transfer Taxes payable pursuant to
Section 2.03(a);
(b) a counterpart of each of the Ancillary Agreements, executed by
Purchaser or Parent, as applicable;
(c) a counterpart to any of the documents delivered by Seller pursuant
to Section 2.06(c);
(d) a receipt for the Assets acknowledging the purchase of the Assets
pursuant to this Agreement; and
(e) any documents required pursuant to Sections 4.03 and 6.11.
Section 2.08. Accounting; Endorsement of Checks. To the extent that,
after the Closing, Seller receives any payment that is for the account of
Purchaser according to the terms of this Agreement, Seller shall promptly
deliver such amount to Purchaser. Seller hereby authorizes Purchaser following
the Closing to endorse for deposit only its name on, and collect for Purchaser's
account, any checks received in payment of any accounts receivable included in
the Assets, and any refunds of deposits, prepaid expenses and similar amounts
included in the Assets.
Section 2.09. Alternative Structure. (a) At the request of the
Purchaser, Seller shall undertake all necessary measures to contribute
immediately prior to the Closing all of the Assets, free and clear of all Liens
other than Permitted Liens, to one or more wholly-owned newly-formed
Subsidiaries of Seller organized under the laws of The Netherlands as requested
by Purchaser (the "TARGET SUBSIDIARIES") and cause any such Target Subsidiaries
to assume the Assumed Liabilities. Purchaser and Seller agree to treat such
contribution as a taxable transaction for Dutch corporate income tax purposes.
At the Closing, Seller shall sell, transfer, deliver, convey and assign to
Purchaser, and Purchaser shall purchase and accept from Seller, all of Seller's
right, title and interest in all of the stock of the Target Subsidiaries. All
incremental out-of-pocket expenses related to the transactions contemplated
under this section 2.09 shall be for Purchaser's account. Neither Purchaser nor
Seller shall include any Target Subsidiary in a fiscal unity with the Seller on
any Tax Return or similar filing, pursuant to any election or similar statement
or in any Tax Proceeding.
(b) Notwithstanding any other provision of this Agreement to the contrary,
prior to the Closing Purchaser and Seller shall cooperate in connection with
structuring the acquisition of the Assets and the assumption of the Assumed
Liabilities and shall take any and all reasonable actions necessary to
effectuate such alternative structure (including without limitation entering
into separate agreements with respect to such transactions), provided that
(i) Seller shall not be required to take any action that would be reasonably
likely to delay, or have an adverse effect on the Parties' ability to
consummate, the Closing and (ii) such cooperation and other actions would
not be
21
reasonably likely to have an adverse effect on the economic benefits to
either Purchaser or Seller of the transactions contemplated by this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Each of Parent and Purchaser hereby agrees and acknowledges that,
except for the representations and warranties contained in this Article III,
neither Seller nor any other Person has made any representation or warranty
(whether express or implied) on behalf of Seller, any of its Affiliates or any
of their respective employees, agents or representatives regarding (a) the
Business, the Assets, the Assumed Liabilities or the transactions contemplated
by this Agreement or (b) any information, documents or material provided or made
available by Seller, any of its Affiliates or any of their respective employees,
agents or representatives to Parent, Purchaser or any of their employees, agents
or representatives, including any projections, estimates or budgets. Seller
hereby disclaims any such representation or warranty, notwithstanding the
delivery or disclosure to Parent and Purchaser or their employees, agents or
representatives of any materials, documentation or other information (including
any projections, estimates or budgets).
Except as otherwise set forth in the disclosure schedule delivered by
Seller to Parent prior to the execution of this Agreement (the "SELLER
DISCLOSURE SCHEDULE"), Seller hereby represents and warrants to each of Parent
and Purchaser as follows:
Section 3.01. Organization and Qualification; Capitalization;
Subsidiaries. (a) Seller and each of its Subsidiaries is a corporation or legal
entity duly organized and validly existing under the Laws of the jurisdiction of
its incorporation and has all requisite corporate, partnership or similar power
and authority to own, lease and operate its properties and to carry on its
businesses as now conducted, except for any failures to have such power or
authority that do not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Except for the Subsidiaries of Seller, Seller does not own,
directly or indirectly, beneficially or of record, any shares of capital
stock or other voting security of any other entity or any other investment
in any other entity, in any such case estimated to be in excess of U.S.$1
million.
(c) Seller and each of its Subsidiaries is duly qualified or licensed
to do business and is in good standing (if and to the extent such term is
recognized in the relevant jurisdiction) in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except
where the failures to be so duly qualified or licensed and in good standing
have not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
22
(d) Seller has heretofore delivered or made available to Parent
accurate and complete copies of the articles of association and by-laws or
other similar organizational documents in effect as of the date hereof of
Seller and each of its Subsidiaries and the minute books (since January 1,
2002) of Seller.
(e) The authorized capital stock of Seller consists of 204,777,000
Seller Shares, 227,530,000 governance preference shares, par value (euro).05
per share (the "Governance Preferred Shares") and 22,753,000 preferred
financing shares, par value (euro).05 per share (the "Financing Preferred
Shares"). As of the date hereof, (i) 118,022,471 Seller Shares are issued
and outstanding, (ii) 7,180,410 Seller Shares are reserved for issuance in
connection with Seller Stock Options, rights to acquire Seller Restricted
Shares and other equity or equity-based awards outstanding on the date
hereof, (iii) 5,058,098 Seller Shares are reserved for issuance under the
Seller Stock Option Plans, Seller Restricted Plans and all other equity or
equity-based plans of Seller and its Subsidiaries (excluding Seller Shares
reserved for issuance in connection with the outstanding Seller Stock
Options, Seller Restricted Shares and other equity or equity-based awards),
(iv) no Governance Preferred Shares are issued and outstanding, (v) no
Financing Preferred Shares are issued and outstanding and (vi) no Seller
Shares are held in the treasury of Seller or held by any Subsidiary of
Seller. Except (i) as set forth in this Section 3.01 and (ii) for the
transactions contemplated by this Agreement, including those permitted in
accordance with Section 5.01, for changes since March 31, 2004 resulting
from the exercise of employee and director stock options outstanding on such
date, there are no outstanding (A) shares of capital stock or other voting
securities of Seller, (B) securities of Seller convertible into or
exchangeable or exercisable for shares of capital stock or voting securities
of Seller, (C) options, warrants or other rights to acquire from Seller, and
no preemptive or similar rights, subscriptions or other rights, convertible
securities, agreements, arrangements or commitments of any character,
relating to the capital stock of Seller, obligating Seller to issue,
transfer or sell, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of Seller or obligating Seller to grant, extend or enter into any
such option, warrant, restricted stock units, subscription or other right,
convertible security, agreement, arrangement or commitment, and (D) equity
equivalents, interests in the ownership or earnings of Seller or other
similar rights (the items in clauses (A), (B), (C) and (D) being referred to
collectively as the "SELLER SECURITIES"). None of Seller or its Subsidiaries
has any outstanding obligation to redeem, repurchase or otherwise acquire
any Seller Securities or any of the Seller Subsidiary Securities, or to
provide funds to or make any investment in excess of U.S.$1 million in the
aggregate (in the form of a loan, capital contribution or otherwise) in any
Subsidiary (other than any wholly-owned Subsidiary) of Seller or any other
Person. There are no shareholders' agreements, voting trusts, registration
rights agreements or other agreements or understandings to which Seller or
any of its Subsidiaries is a party with respect to the voting, disposition
or dividends of the Seller Securities or the Seller Subsidiary Securities.
Other than the Cash Dividend, all dividends on the Seller Shares that have
been declared or have accrued prior to the date hereof have been paid in
full.
23
(f) All of the outstanding capital stock of, or other ownership
interests in, Seller's Subsidiaries is owned by Seller, directly or
indirectly, free and clear of any Liens other than Permitted Liens. Each of
the outstanding shares of capital stock or other equity interests of each
such Subsidiary is duly authorized, validly issued, fully paid and
non-assessable and was issued free of preemptive (or similar) rights. There
are no outstanding (i) securities of Seller or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary of Seller, or (ii)
options, warrants or other rights to acquire from Seller or any of its
Subsidiaries, and no other obligation of Seller or any of its Subsidiaries
to issue, transfer or sell, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable
or exercisable for, any capital stock, voting securities or ownership
interests in, any Subsidiary of Seller, or (iii) equity equivalents,
interests in the ownership or earnings of any Subsidiary of Seller, except
for stock options and restricted stock claims granted to employees,
directors, including members of the Supervisory Board, or independent
contractors within the meaning of Section 2.04 (the items in clauses (i),
(ii) and (iii), together with all outstanding shares of capital stock of, or
other ownership interests in, each Subsidiary of Seller, being referred to
collectively as the "SELLER SUBSIDIARY SECURITIES").
Section 3.02. Authority Relative to This Agreement. (a) Seller has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby other than the Required
Seller Vote. Each of the Seller Boards has duly and validly authorized the
execution, delivery and performance by Seller of this Agreement and approved the
consummation by Seller of the transactions contemplated hereby, and taken all
corporate actions required to be taken by each of the Seller Boards for the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, and has by resolution (i) approved, and
declared advisable, the transactions contemplated by this Agreement; (ii)
determined that this Agreement and the transactions contemplated hereby are
reasonable, proper and advisable and are fair to, and in the best interests of,
Seller, the Business, Seller's shareholders and Seller's other stakeholders
after taking into account the interests of the employees and other stakeholders
of Seller; and (iii) recommended that the shareholders of Seller approve and
adopt such transactions. No other corporate proceedings on the part of Seller
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby other than the Required Seller Vote. This Agreement has been
duly and validly executed and delivered by Seller and constitutes a valid, legal
and binding agreement of Seller, enforceable against Seller in accordance with
its terms.
(b) The Seller Boards have directed that the transactions contemplated
by this Agreement be submitted to the shareholders of Seller entitled to
vote thereon for their approval at an extraordinary general meeting to be
held for that purpose. The affirmative vote of the holders of a majority of
the outstanding Seller Shares represented at the extraordinary general
meeting of the shareholders of Seller (the "SELLER SHAREHOLDERS MEETING"),
called in accordance with applicable Law and the Restatement of the Articles
of Association of Seller, dated August 24, 2000, as amended (the "SELLER
ARTICLES"), in
24
favor of a resolution authorizing this Agreement and the transactions
contemplated hereby, the Seller Liquidation, the termination of the Seller
Stock Option Plan and the Seller Restricted Stock Plan with respect to the
Supervisory Board, the appointment of a liquidator (the "LIQUIDATOR"), the
renumeration of the Liquidator and a company providing it with support
services, the reduction of the size and the change in composition of the
Supervisory Board effective as of the Closing, the amendment (if required)
to the Seller Articles to permit such reduction of the size and change in
composition of the Supervisory Board, the appointment of a Person or Persons
to oversee the Seller Liquidation and the renumeration of such Person or
Persons, and the appointment of a custodian (bewaarder) of the Seller's
books to be effective upon the completion of the Seller Liquidation
(collectively, the "REQUIRED SELLER VOTE") is the only vote of the holders
of any class or series of capital stock of Seller necessary to approve the
transactions contemplated by this Agreement. No other vote or approval of
the shareholders of Seller is required by Dutch Law or the Seller Articles,
in order for Seller to approve the transactions contemplated by this
Agreement or to consummate the transactions contemplated hereby.
Section 3.03. Regulatory Reports; Financial Statements. (a) Seller has
timely filed all registration statements, schedules, statements, forms, reports
and other documents (including exhibits and all other information incorporated
by reference) required to be filed by Seller with Euronext, the trade register
(Handelsregister) of the Chamber of Commerce (Xxxxx van Koophandel) in The Hague
(the "TRADE REGISTER"), the Dutch Authority for the Financial Markets (the
"AFM") and the United States Securities and Exchange Commission (the "SEC") from
and after January 1, 2002, each of which (including any financial statements or
schedules included or incorporated by reference therein), as of its respective
date, was prepared in accordance and fully complied in all material respects
with all applicable requirements (except if, and to the extent that, such
registration statement, schedule, statement, form, report or other document was
subsequently amended, superseded or supplemented by a filing made prior to the
date hereof). No Subsidiary of Seller is required to file any form, report or
other document with the Trade Register, Euronext, the AFM or the SEC. None of
such registration statements, prospectuses, forms, reports or documents,
including any financial statements, exhibits or schedules included or
incorporated by reference therein, contained, when filed (and, if amended,
superseded or supplemented by a filing made prior to the date hereof, then on
the date of such filing), any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Prior to the date
hereof, Seller has not filed and has not been required to file any proxy or
information statement with the SEC. Seller has heretofore delivered or made
available to Parent, in the form filed with the Trade Register or, as
applicable, the SEC (including any amendments thereto), (i) copies of the annual
accounts and annual report filed by Seller with the Trade Register for the
fiscal year ended December 31, 2002; (ii) a copy of its Annual Report filed with
the SEC on Form 20-F for the fiscal year ended December 31, 2002; and (iii)
copies of all other reports, certifications, prospectuses or registration
statements filed or furnished by Seller from and after January 1, 2002 and prior
to the date hereof with the SEC (the "SELLER SEC REPORTS") or with the Trade
25
Register, Euronext or the AFM (together with the Seller SEC Reports, the "SELLER
REGULATORY REPORTS").
(b) The Seller Financial Statements and the audited and unaudited
consolidated financial statements (including the related notes) contained in
the Seller Regulatory Reports as of their respective dates (and, if amended,
superseded or supplemented by a filing made prior to the date hereof, then
the date of such filing): (i) complied as to form in all material respects
with the applicable accounting requirements and with the published rules and
regulations of the Trade Register, Euronext, the AFM or the SEC (as the case
may be) with respect thereto, (ii) were prepared in accordance with U.S.
GAAP applied on a consistent basis throughout the periods involved (except
as specifically indicated in the notes thereto) and (iii) fairly present, in
all material respects, the consolidated financial position of Seller and its
consolidated Subsidiaries, as of their respective dates (and, if amended,
superseded or supplemented by a filing made prior to the date hereof, as of
the date of such filing) (except, in the case of unaudited financial
statements, subject to normal year-end audit adjustments and for the absence
of footnotes).
(c) Since January 1, 2002, Seller has not received written notice from
the AFM, the SEC or any other Governmental Authority that any of its
accounting policies or practices are the subject of any review, inquiry,
investigation or challenge by AFM, the SEC or other Governmental Authority.
Section 3.04. No Undisclosed Liabilities. Seller and its Subsidiaries
have no liabilities or obligations of any nature, whether or not accrued,
absolute, contingent, liquidated or unliquidated or otherwise, whether due or to
become due and whether or not required to be recorded or reflected on a balance
sheet under U.S. GAAP, except for (i) Liabilities identified in the Seller
Financial Statements and (ii) Liabilities incurred since December 31, 2003,
which do not have, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
Section 3.05. Absence of Changes. Except as otherwise specifically
contemplated by this Agreement, since December 31, 2003, Seller and its
Subsidiaries have conducted their business in all material respects only in the
ordinary course consistent with past practice and there has not been:
(a) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of Seller, or any
repurchase, redemption or other acquisition for value by Seller or any
Subsidiary of any securities of Seller or of any of its Subsidiaries, other
than (i) in connection with the annual cash dividend in the amount of
U.S.$0.04 with respect to each of the Seller Shares approved by the
shareholders of Seller on May 14, 2004 and paid on May 21, 2004 (the "CASH
DIVIDEND") and (ii) in connection with the exercise of any Seller Stock
Option or any right to acquire Seller Restricted Shares;
26
(b) Except for letters of credit issued in connection with pre-payments
by customers in an aggregate amount up to U.S.$5 million or borrowings under
existing lines of credit in an aggregate amount up to U.S.$5 million (i) any
incurrence or assumption (or agreement to incur or to assume) by Seller or
any Subsidiary of Seller of any Indebtedness, or (ii) any guarantee,
endorsement or other incurrence or assumption of (or agreement to guarantee,
endorse, incur or assume) liability (whether directly, contingently or
otherwise) by Seller or any Subsidiary of Seller for the obligations of any
other Person (other than any wholly-owned Subsidiary of Seller);
(c) any Contract entered into by Seller or any Subsidiary of Seller
relating to any material acquisition, disposition, sale, assignment,
transfer, lease or license (in whole or in part) of any assets, rights,
properties or business;
(d) any change in any method of accounting or accounting principles or
practice by Seller or any Subsidiary materially affecting the consolidated
assets, liabilities or results of operations of Seller, except for any such
change required by reason of a change in Dutch GAAP, U.S. GAAP or applicable
Law;
(e) any (i) grant of any severance or termination pay to any director
or officer of Seller; (ii) entering into any written employment, deferred
compensation, consulting or other similar agreement (or any amendment to any
such existing agreement) with any director or officer; (iii) increase in
benefits payable under any existing severance or termination pay policies or
employment agreements; or (iv) increase in compensation, bonus or other
benefits payable to directors or officers of Seller; or
(f) any event, change, circumstance or effect which has had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 3.06. Insurance. Section 3.06 of the Seller Disclosure Schedule
sets forth a complete and correct list of all launch and in-orbit satellite
insurance policies or binders in effect as of the date hereof. True and complete
copies of such insurance policies and binders have been delivered or made
available to Purchaser. Except as have not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(a) all premiums due and payable in respect of each insurance policy to which
any of Seller and its Subsidiaries is either an insured or a beneficiary (an
"INSURANCE POLICY") have been paid and none of Seller and its Subsidiaries has
given or received written notice from any insurer or agent of any intent to
cancel any such Insurance Policy; (b) none of Seller and its Subsidiaries has
received written notice from any insurance company or Governmental Authority of
any defects or inadequacies that is reasonably likely to adversely affect the
insurability of, or to cause a material increase in the premiums for, insurance
covering any of Seller and its Subsidiaries or any of their respective
properties or assets that have not been cured or repaired to the satisfaction of
the party issuing the notice; and (c) the Insurance Policies are sufficient for
compliance with all requirements of Law and of all Seller Material Contracts.
27
Section 3.07. Information Supplied. None of the information included or
incorporated by reference in the Shareholder Circular or in any document filed
with any Governmental Authority (including, in each case, any amendments or
supplements thereto) and any other documents included therein will, on the date
the Shareholder Circular is mailed to Seller's shareholders or, as applicable,
the date on which the applicable filing is made, or at the time immediately
following any amendment or supplement to the Shareholder Circular or such
filing, as applicable, or at the time the Seller Shareholders Meeting is held,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided that, Seller makes no representations regarding any
information furnished in writing by Parent, Purchaser or their Affiliates
specifically for inclusion in the Shareholder Circular or such filing. If at any
time prior to the completion of the Seller Shareholders Meeting, any event with
respect to Seller, its officers and directors or any of its Subsidiaries should
occur which is required to be described in an amendment of, or a supplement to
the Shareholder Circular or any filing with any Governmental Authority, Seller
shall promptly so advise Parent and such event shall be so described, and such
amendment or supplement (which Parent shall have a reasonable opportunity to
review) shall be, to the extent required by Law, disseminated to the
shareholders of Seller.
Section 3.08. Consents and Approvals; No Violations. (a) Except for
filings, notifications, licenses, permits, authorizations, consents and
approvals as may be required by, and other applicable requirements of, Euronext,
the AFM, the NMa, the Trade Register, the NYSE, the Exchange Act, any applicable
Antitrust Law, any applicable foreign investment Law in the European Union or
The Netherlands, the Communications Act of 1934, as amended, and the
Communications Satellite Act of 1962, as amended (collectively, the
"COMMUNICATIONS ACT"), filings with, and approvals of the Dutch
Telecommunications Agency (Agentschap Telecom) (the "AT") and the United States
Federal Communications Commission ("FCC"), the U.S. Department of State, the
Committee on Foreign Investments in the United States ("CFIUS") and United
States federal executive branch agencies with responsibility for law enforcement
or homeland security, the approvals or notifications of the Governmental
Authorities listed in Section 3.08(a) of the Seller Disclosure Schedule in
connection with a change of control and/or assignment of the holders of the
licenses, permits and registrations of Seller, compliance with any applicable
provisions of Dutch Law listed in Section 3.08(a) of the Seller Disclosure
Schedule and a notice to the SER (collectively, the "SELLER REQUIRED
APPROVALS"), no filing with or notice to, and no permit, authorization, consent
or approval of, any Governmental Authority is necessary for the execution,
delivery and performance by Seller of this Agreement or the consummation by
Seller of the transactions contemplated hereby, except for any failures to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notices that do not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) Neither the execution, delivery and performance of this Agreement
by Seller nor the consummation by Seller of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of
the respective articles of
28
association or by-laws (or similar governing documents) of Seller or any of
its Subsidiaries, (ii) result in a violation or breach of, or constitute a
default, require consent, or result in the loss of a benefit under or give
rise to a right to permit or require the purchase or sale of assets or
securities under, give rise to any right of termination, amendment,
cancellation or acceleration of any right or obligation, or the creation of
any Lien under, any of the terms, conditions or provisions of any Contract,
Permit or other instrument or obligation to which Seller or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound, or (iii) provided that the filings,
notifications, licenses, permits, authorizations, consents and approvals
referenced in Section 3.08(a) have been made or obtained, violate any Law
applicable to Seller or any of its Subsidiaries or any of their respective
properties or assets, except in the case of (ii) and (iii) for violations,
breaches, losses or defaults that do not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 3.09. No Default. Neither Seller nor any of its Subsidiaries is
in violation of any term of (i) its articles of association, by-laws or other
organizational documents, (ii) any agreement or instrument related to
Indebtedness or any other agreement to which it is a party or by which it is
bound, or (iii) any Law applicable to Seller, its Subsidiaries or any of their
respective rights, Permits, properties or assets, except for violations which,
in the case of clauses (ii) and (iii), do not have and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.10. Litigation. There is no Action pending or, to Seller's
Knowledge, threatened against Seller or any of its Subsidiaries or any of their
respective rights, Permits, properties or assets which has had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. As of the date hereof, no officer or director of Seller is a
defendant in any Action commenced by shareholders of Seller with respect to the
performance of his or her duties as an officer and/or director of Seller. There
exists no Contract with any of the directors and officers of Seller or its
Subsidiaries that provides for indemnification by Seller or its Subsidiaries.
Neither Seller nor any of its Subsidiaries nor any of their respective
properties or assets is or are subject to any outstanding order, writ,
injunction or decree, except for orders, writs, injunctions and decrees which do
not have, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 3.11. Seller Material Contracts. (a) Section 3.11 of the Seller
Disclosure Schedule sets forth a complete and correct list of the Seller
Material Contracts. Complete and correct copies of the written Seller Material
Contracts have been delivered or made available to Purchaser, except for
redactions of certain portions thereof made pursuant to requirements of
applicable Law. Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a
29
Material Adverse Effect, each of the Seller Material Contracts constitutes the
valid and legally binding obligation of Seller or, as applicable, its
Subsidiaries, enforceable in accordance with its terms, and is in full force and
effect. Except as have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, there is no default
under any Seller Material Contract either by Seller or, to Seller's Knowledge,
by any other party thereto, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a default thereunder by
Seller or, to Seller's Knowledge, any other party.
(b) Section 3.11(b) of the Seller Disclosure Schedule sets forth the
Backlog as of March 31, 2004 and the Contracts representing the 20 largest
contributions to the Backlog (the "MATERIAL BACKLOG CONTRACTS"). Except as
have not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, to Seller's Knowledge, no event
has occurred which would result in any breach or violation of, constitute a
default, require consent or result in the loss of a benefit under, give rise
to a right to permit or require the purchase or sale of assets or securities
under, give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien (other than a Permitted
Lien) on any of the properties or assets of Seller or any of its
Subsidiaries (in each case, with or without notice or lapse of time or both)
pursuant to, any Material Backlog Contract, except, for any payment defaults
under transponder sale or lease agreements which are not more than ninety
(90) days past due.
(c) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect:
(i) neither Seller nor any of its Subsidiaries is participating
in, or to Seller's Knowledge, the subject of, any
investigation by any Governmental Authority relating to the
Government Contracts, xxxxxxxx, claims or business
practices that is reasonably likely to lead to criminal or
civil penalties or the cancellation of any Government
Contract, and, to Seller's Knowledge, no such investigation
has been threatened or is actively being considered.
Neither Seller nor any of its Subsidiaries is debarred or
suspended under the Federal Acquisition Regulations or
other similar applicable Laws by any Governmental Authority
from bidding for, or obtaining any Government Contract for
services provided by, Seller or its Subsidiaries, and to
Seller's Knowledge, no such Proceeding is pending or
threatened.
(ii) to Seller's Knowledge, each of Seller and its Subsidiaries
has complied in all respects with all applicable
requirements, if any, under the Federal Truth in
Negotiations Act (codified at 10 U.S.C. Sections 2306 and
2306a; 41 U.S.C. Section 254b) with respect to Government
Contracts for services provided by Seller or any of its
Subsidiaries. No Government Contract is subject to the U.S.
government cost accounting standards, as set forth in 48
C.F.R. Part 30. Neither Seller nor any of its Subsidiaries
has engaged in any fraudulent act, bribery or other act of
dishonesty or made any
30
misrepresentation of fact in connection with soliciting,
negotiating, obtaining or maintaining any Government
Contract.
(iii) to Seller's Knowledge, no Governmental Authority has
requested in writing any actual or potential price
reduction, adverse contract adjustment, disallowance of
costs or claims in respect of any Government Contract.
(iv) neither Seller nor any of its Subsidiaries has received,
with respect to any Government Contract, written notice of:
(A) any final decision or unilateral modification assessing
a price reduction, penalty or claim for damages or other
remedy; (B) any claim, based on assertions of defective
pricing or asserted violations of government cost
accounting standards or cost principles; (C) any claim for
indemnification by any Governmental Authority; (D) an
equitable adjustment of or claim concerning such Government
Contract submitted by or brought by either Seller or any of
its Subsidiaries or brought by any subcontractors or
suppliers against either Seller or any of its Subsidiaries;
or (E) any disallowance of costs (direct or indirect) or
related claims, in each case referred to in one of the
preceding clauses of this Section 3.11(c)(iv).
Section 3.12. Permits; Compliance with Applicable Laws. (a) Seller and
its Subsidiaries hold all Permits as are necessary for the lawful conduct of
their respective businesses as currently conducted and to own, lease or operate
their properties and assets (collectively, the "SELLER PERMITS"), except for
failures to hold such Permits that do not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.12(a) of the Seller Disclosure Schedule sets forth all Permits issued
to Seller by the Dutch Ministry of Economic Affairs, the AT or any other Dutch
Governmental Authority relating to the ability of Seller and/or its Subsidiaries
to utilize geostationary arc orbital locations and associated frequencies (the
"DUTCH PERMITS"). For the avoidance of doubt, the Dutch Permits are included
within the term Seller Permits under this Agreement. Seller has delivered or
made available to Parent all material correspondence it has had with any Dutch
Governmental Authority since January 1, 2002 with respect to such Dutch Permits.
To Seller's Knowledge, as of the date hereof no other Person has received any
such Permit from any Dutch Governmental Authority to utilize the geostationary
arc orbital locations and associated frequencies set forth in the Dutch Permits.
Seller and its Subsidiaries are in compliance with the terms of the Seller
Permits and, to Seller's Knowledge, there has occurred no violation of, default
(with or without notice or lapse of time or both) under, or event giving to any
Person any right of termination, amendment or cancellation (with or without
notice or lapse of time or both) of any such Seller Permit, except for such
failures to so comply as have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Section
3.12(a) of the Seller Disclosure Schedule sets forth all Seller Permits the
transfer of which may require the approval, consent or authorization of a
Governmental Authority or which
31
are material to Seller and its Subsidiaries. Section 3.12(a) of the Seller
Disclosure Schedule sets forth all of the applications of Seller and any of its
Subsidiaries that are pending before the FCC, the AT or the Dutch Ministry of
Economic Affairs. Neither Seller nor any of its Subsidiaries has received notice
of any revocation or modification of any Seller Permit, except for revocations
or modifications which have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. None of
Seller, any of its Subsidiaries or any of their relevant personnel and
operations is, or since January 1, 2002, has been, in violation of any Law
applicable to its business, properties or operations, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. To the Knowledge of Seller, no
investigation or review by any Governmental Authority with respect to Seller,
any of its Subsidiaries, the Assets or the Seller Permits is pending or
threatened, nor has any Governmental Authority indicated an intention to conduct
the same, against Seller or any of its Subsidiaries, alleging any violation of
any Law, except, in each case, for those investigations or reviews the outcomes
of which have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) None of Seller, any of its Subsidiaries or any of their employees
is, or since January 1, 2002, has been, in violation of any Law applicable
to its business, properties or operations and relating to: (i) the use of
corporate funds relating to political activity or for the purpose of
obtaining or retaining business; (ii) payments to government officials or
employees from corporate funds; (iii) bribes, rebates, payoffs, influence
payments, kickbacks; or (iv) export, trade or investment restrictions,
prohibitions, embargoes, sanctions or other financial and non-financial
controls, except in the case of clauses (i) - (iv) for violations that have
not had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 3.13. Employee Benefit Plans. (a) Section 3.13(a) of the Seller
Disclosure Schedule lists each material compensation, benefit and pension plan,
Contract, program, policy or arrangement maintained or contributed to, or
required to be maintained or contributed to, by Seller or any of its
Subsidiaries, covering current or former employees, officers, directors and
consultants of Seller and its Subsidiaries or under which Seller or any of its
Subsidiaries has any present or future liability (individually, a "SELLER PLAN,"
or collectively, the "SELLER PLANS").
(b) Except as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (i) with respect to each Seller
Plan, all payments due from Seller or any of its Subsidiaries to date have
been timely made or have been reflected on the Seller Financial Statements;
(ii) there are no Actions (other than routine claims for benefits) pending
or, to Seller's Knowledge, threatened against the assets of any Seller Plan;
(iii) Seller and its Subsidiaries have complied with, and each Seller Plan
conforms, in form and operation to, its terms and all applicable Laws and
have received all necessary approvals by any Governmental Authority in order
to be treated (for tax and other purposes) in the manner currently treated
by Seller and its Subsidiaries and, if applicable, has received a favorable
determination letter as to its qualifications; (iv) no
32
event has occurred and no condition exists that would subject Seller or any
of its Subsidiaries, by reason of their affiliation with any member of their
"CONTROLLED GROUP" (defined as any organization which is a member of a
controlled group of organizations within the meaning of Code sections
414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or other liability
imposed by ERISA, the Code or other applicable Laws; and (v) no Seller Plan
provides retiree welfare benefits and neither Seller nor any of its
Subsidiaries have any obligation to provide any retiree welfare benefits
other than as required by applicable Law.
(c) Except as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, no Seller Plan is under audit
or is the subject of an investigation by any Governmental Authority, nor is
any such audit or investigation pending or, to the Knowledge of Seller,
threatened.
(d) The consummation of the transactions contemplated by this Agreement
(whether alone or in connection with any subsequent event), will not (i)
entitle any Person to any benefit under any Seller Plan; or (ii) accelerate
the time of payment or vesting, or increase the amount, of any compensation
due to any Person under any Seller Plan with the exception of the vesting or
payments to be made in connection with the cancellation, expiration,
extinguishment or vesting, as applicable, of the outstanding Seller Stock
Options and Seller Restricted Shares. There is no Contract, plan or
arrangement (written or otherwise) covering any current or former employee,
director or independent contractor of Seller or any of its Subsidiaries
that, individually or collectively, would give rise to the payment of any
amount that would not be deductible pursuant to the terms of Section 280G of
the Code.
(e) No Seller Plan is subject to Title IV of ERISA and neither Seller,
its Subsidiaries nor any member of their Controlled Group has in the six
years preceding the date hereof sponsored or contributed to, or has or had
any liability or obligation in respect of, any plan subject to Title IV of
ERISA.
(f) Seller has delivered or made available to Parent with respect to
each Seller Plan for which the following exists:
(i) in respect of each Seller Plan for which financial
statements and/or actuarial reports are required to be or
are otherwise prepared, the most recent copy of such
financial statements or actuarial reports;
(ii) if Seller Plan is funded through a trust or any third party
funding vehicle (other than an insurance policy), a copy of
the trust or other funding agreement; and
(iii) a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate description) of each Seller
Plan.
33
Section 3.14. Labor Matters. (a) Neither Seller nor any of the Seller
Subsidiaries is a party to any collective bargaining agreement with respect to
any of their respective employees or any labor organization to which their
respective employees or any of them belong.
(b) Except in each case for such matters as have not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:
(i) neither Seller nor any of its Subsidiaries is a party to,
or bound by, any Contract with a labor union or labor
organization, nor is any such Contract presently being
negotiated;
(ii) neither Seller nor any of its Subsidiaries is the subject
of any Action asserting that Seller or any of its
Subsidiaries has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization
as to wages or conditions of employment, nor, to Seller's
Knowledge, is such proceeding threatened;
(iii) there is no strike, work stoppage, lockout or other labor
dispute involving Seller or any of its Subsidiaries pending
or, to Seller's Knowledge, threatened;
(iv) since January 1, 2003 there have been no delays in the
fulfillment of any obligations towards the Employees that
would be reasonably expected to lead to a dispute with
Seller.
Section 3.15. Environmental Matters. Except as have not had, and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:
(a) (i) the operations of Seller and its Subsidiaries are in compliance
with all, and have not violated any, applicable Environmental Laws; (ii)
each of Seller and its Subsidiaries possesses all Environmental Permits
required to operate its business as operated on the date hereof and complies
with each and has not violated any such Environmental Permit; (iii) there
are no pending or, to Seller's Knowledge, threatened, Actions under or
pursuant to Environmental Laws (A) against Seller or its Subsidiaries or,
(B) involving any real property currently or formerly owned, operated or
leased by Seller or its Subsidiaries and (iv) Seller and its Subsidiaries
are not subject to any Environmental Liabilities and, to Seller's Knowledge,
there are no facts, circumstances or conditions relating to, arising from,
associated with or attributable to any real property currently or formerly
owned, operated or leased by Seller or its Subsidiaries or operations
thereon that would reasonably be expected to result in Environmental
Liabilities.
34
(b) to Seller's Knowledge, there has been no Environmental Report in
relation to any real property now or previously owned or operated by Seller
or any of its Subsidiaries that has not been delivered or made available to
Parent prior to the date hereof.
Section 3.16. Taxes.
(a) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, each of
Seller and its Subsidiaries have timely filed, or has caused to be timely
filed on its behalf (taking into account any extension of time within which
to file), all Tax Returns required to be filed by it, and all such filed Tax
Returns are true, complete and accurate in all material respects. The Seller
and each of its Subsidiaries has paid (or has had paid on its behalf) all
material Taxes due and payable with respect to any taxable period ending
prior to or including the Closing Date.
(b) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, no Liens
for Taxes exist with respect to any asset of Seller or any of its
Subsidiaries, except for statutory Liens for Taxes not yet due or being
contested in appropriate proceedings.
(c) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, neither
Seller nor any of its Subsidiaries has any obligation under any agreement
(either with any Person or any taxing authority) with respect to Taxes.
(d) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, no audit
or other administrative or court proceedings are pending with respect to
Taxes of Seller or any of its Subsidiaries and no written notice thereof has
been received.
(e) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, no
written claim has been made by a taxing authority in a jurisdiction where
neither Seller nor any Subsidiary of Seller files Tax Returns that Seller or
any of its Subsidiary is or may be subject to taxation in that jurisdiction.
(f) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, Seller
and each Subsidiary has duly and timely withheld and paid over to the
appropriate Governmental Authorities all Taxes required to have been
withheld or paid in connection with amounts paid owing or owning to any
employee, independent contractor, creditor, shareholder or other third party
under all applicable Laws.
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(g) Seller has made available to Parent true and complete copies of (i)
all corporate Tax Returns of Seller and its Subsidiaries showing a material
tax liability for the preceding two taxable years and (ii) any audit report
issued within the last three years (or otherwise with respect to any audit
or proceeding in progress) relating to Taxes of Seller or any Subsidiary of
Seller.
(h) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, neither
Seller nor any of its Subsidiaries have transferred assets and/or
liabilities within the fiscal unity of which Seller is the parent company,
which such assets and/or such liabilities at the time of transfer contained
a hidden reserve (stille reserve) which could result in a Tax liability for
which any of the Subsidiaries could be liable.
Section 3.17. Intellectual Property. Except as have not had, and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect: (i) Seller and each of its Subsidiaries owns, or is licensed to
use (in each case, free and clear of any Liens other than Permitted Liens) and
take all reasonable actions to protect, all material Intellectual Property used
in or necessary for the conduct of its business as currently conducted by
Seller; (ii) to Seller's Knowledge, the use of any Intellectual Property by
Seller and its Subsidiaries does not infringe on or otherwise violate the rights
of any Person and is in accordance with any applicable license pursuant to which
Seller or any of its Subsidiaries acquired the right to use any Intellectual
Property; (iii) to Seller's Knowledge, no Person is challenging or infringing on
or otherwise violating any right of Seller or any of its Subsidiaries with
respect to any Intellectual Property owned by or licensed to Seller or any of
its Subsidiaries; and (iv) to Seller's Knowledge, neither Seller nor any
Subsidiary of Seller has received any written notice of any pending or
threatened claim with respect to any Intellectual Property owned or used by
Seller and its Subsidiaries.
Section 3.18. Seller Satellites.
(a) Section 3.18(a) of the Seller Disclosure Schedule sets forth a
complete and accurate list of the satellites owned by Seller or any of its
Subsidiaries (the "SELLER SATELLITES"). Seller has made available to
Purchaser true and correct copies of the "Health Status Reports" prepared by
Seller's Engineering and Operations Department since January 1, 2002 (the
"HEALTH STATUS REPORTS"). As of the date hereof, to Seller's Knowledge,
there are no material Seller Satellite anomalies that are not disclosed in
the Health Status Reports. Seller and its Subsidiaries have good title to
the Seller Satellites, in each case free and clear of all Liens except
Permitted Liens.
(b) Section 3.18(b) of the Seller Disclosure Schedule sets forth (i) a
summary, by orbital location, of the status of frequency registration at the
International Telecommunication Union ("ITU"), of each Seller Satellite and
each other orbital location identified in the Dutch Permits, including ITU
coordination request reference numbers and publication dates (or equivalent
information for advance publication whenever coordination requests are still
unpublished), the identity of the sponsoring
36
administration and the frequency bands authorized by the AT, (ii) the dates
Seller's ITU rights at the orbital location for which a satellite has not
been brought into use would expire and (iii) a list, as of the date hereof,
of all satellite intersystem coordination agreements to which Seller or any
Subsidiary of Seller is a party. Except as have not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, to Seller's Knowledge, no Person or entity has date
precedence in filing a Request for Coordination in accordance with the ITU
regulations, or has asserted that it has rights to operate a spacecraft in a
manner that would result in interference to any Seller Satellite or ground
station.
(c) Section 3.18(c) of the Seller Disclosure Schedule sets forth all
material transmitting and/or receiving radio frequency facilities consisting
of land, buildings, fixtures, equipment, improvements (if any) and
telemetry, tracking and control equipment that are owned or leased by Seller
or any of its Subsidiaries (the "SELLER GROUND STATIONS") or that are
operated as of the date hereof by Seller or any of its Subsidiaries (the
"MAJOR STATIONS"). No ground station other than a Major Station provides
telemetry, tracking and control for a Seller Satellite. Except as have not
had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the improvements to each Major Station
and all components used in connection therewith are (i) in good operating
condition and repair and are suitable for their intended purposes and (ii)
supported by a back-up generator capable of generating power sufficient to
meet the requirements of the operations conducted at the Major Station. To
Seller's Knowledge, no other radio communications facility is causing
objectionable interference to the transmissions from or the receipt of
signals by any Seller Satellite or Seller Ground Station, except for any
interferences that have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Seller
and its Subsidiaries have good title to, or in the case of leased property
or assets, a valid, binding and enforceable leasehold interest in, all
Seller Ground Stations, in each case free and clear of all Liens except
Permitted Liens.
Section 3.19. Related Party Transactions. As of the date hereof, there
is no transaction, agreement or arrangement between Seller or any of its
Subsidiaries on the one hand, and any Person on the other hand that would
constitute a "Related Transaction" within the meaning of Item 404 of Regulation
S-K under the Exchange Act.
Section 3.20. Brokers. (a) No broker, finder, investment banker, other
intermediary or other Person (other than Xxxxxxx Xxxxx International and NM
Rothschild & Sons Limited) is entitled to any brokerage, finder's or other fee
or commission or expense reimbursement in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Seller or any of its Affiliates. A copy of the engagement agreement and any
other agreements between Seller or any of its Affiliates, on the one hand, and
Xxxxxxx Xxxxx International or NM Rothschild & Sons Limited, on the other hand,
has been provided to Parent.
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(b) Schedule 3.20(b) of the Seller Disclosure Schedule sets forth
Seller's reasonable estimate, as of the date hereof, of the Expenses
incurred or payable, or to be incurred or payable, by Seller or any of its
Subsidiaries in connection with this Agreement and the consummation of the
transactions contemplated hereby.
Section 3.21. Real Property.
(a) Section 3.21(a) of the Seller Disclosure Schedule contains a list
of the Owned Property. Except as have not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect, to Seller's Knowledge: (i) each of Seller and its Subsidiaries has
good and marketable title to each parcel of Owned Property free and clear of
all Liens, except for the Permitted Liens; and (ii) none of the Owned
Property is owned jointly with any other Person.
(b) Section 3.21(b) of the Seller Disclosure Schedule contains a list
of all Leased Property. Seller has previously made available to Purchaser
true, correct and complete copies of all leases for the Leased Property. To
Seller's Knowledge, (i) Seller and its Subsidiaries have not received any
notice from the other party to such Lease of the termination thereof and
(ii) there is no default or event which, with notice or lapse of time or
both, would constitute a default under such Lease on the part of Seller,
except for any defaults and events that do not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, there are
no existing, or to Seller's Knowledge, threatened, condemnation or eminent
domain proceedings affecting the Owned Property or any portion thereof.
(d) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, the
covenants, conditions, rights-of-way, easements and similar restrictions
affecting any Owned Property do not, in each case, impair the ability to use
such Owned Property in the operation of the Businesses as conducted on the
date hereof.
(e) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, neither
Seller nor any of its Subsidiaries is obligated under or bound by any
option, right of first refusal, purchase contract or other contractual right
to sell, lease or purchase any real property or any portions thereof or
interests therein.
(f) Except as have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, the
buildings and other structures on the Owned Property are in good and
substantial repair and fit for the purposes for which they are presently
used.
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Section 3.22. Opinion of Financial Advisor. Seller has received the
opinion of NM Rothschild & Sons Limited to the effect that, as of the date
hereof, the consideration to be received by the holders of Seller Shares in
connection with the Agreement is fair to such holders from a financial point of
view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Except as set forth in the disclosure schedule delivered by Parent to
Seller prior to the execution of this Agreement (the "PARENT DISCLOSURE
SCHEDULE"), Parent represents and warrants with respect to itself and Purchaser,
and Purchaser represents and warrants with respect to itself as follows:
Section 4.01. Organization. (a) Each of Parent and the Parent
Significant Subsidiaries is a corporation or legal entity duly organized,
validly existing and in good standing (if and to the extent such term is
recognized in the relevant jurisdiction) under the Laws of the jurisdiction of
its incorporation and, except to the extent it does not have, and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the ability of any of Parent or Purchaser to perform its
obligations under this Agreement, has all requisite corporate, partnership or
similar power and authority to own, lease and operate its properties and to
carry on its businesses as now conducted or proposed by Parent to be conducted.
(b) Purchaser is a Subsidiary of Parent and is a company organized
under the laws of The Netherlands; 100% of the equity interests of Purchaser
are held, directly or indirectly, by Parent.
(c) Each of Parent and the Parent Significant Subsidiaries is duly
qualified or licensed to do business and in good standing (if and to the
extent such term is recognized in the relevant jurisdiction) in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except for any failures to be so duly qualified or licensed and
in good standing that do not have, and would not reasonably be expected to
have, individually or in the aggregate, a material adverse effect on the
ability of Parent or Purchaser to perform their respective obligations under
this Agreement.
(d) Parent has heretofore delivered to Seller accurate and complete
copies of the articles of incorporation and by-laws or other similar
organizational documents, as currently in effect, of each of Parent, the
Parent Significant Subsidiaries and Purchaser.
Section 4.02. Authority Relative to This Agreement. (a) No vote of
holders of capital stock of any of Parent or the Parent Significant Subsidiaries
is necessary to approve this Agreement or the transactions contemplated hereby.
Parent has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions
39
contemplated hereby. Parent has duly and validly authorized the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and has approved, or shall cause a Subsidiary of Parent to approve, in
its capacity as a shareholder of Purchaser, the consummation of the transactions
contemplated hereby. No additional corporate proceedings on the part of Parent
or Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and constitutes a valid, legal and binding
agreement of Parent, enforceable against Parent in accordance with its terms.
(b) Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Purchaser has duly and validly authorized the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes a valid, legal and binding agreement
of Purchaser, enforceable against Purchaser in accordance with its terms.
Section 4.03. Consents and Approvals; No Violations. (a) Except for
filings, notifications, permits, authorizations, consents and approvals as may
be required by, and other applicable requirements of, Euronext, the AFM, the
NMa, the NYSE, the Exchange Act, any applicable Antitrust Law, any applicable
foreign investment Law in the European Union or The Netherlands, the
Communications Act, filings with, and approvals of the AT and the FCC, the
United States Department of State, CFIUS, United States federal executive branch
agencies with responsibility for law enforcement or homeland security, the
approvals or notifications of the Governmental Authorities listed in Section
4.03(a) of the Parent Disclosure Schedule in connection with a change of control
and/or assignment of the holders of the licenses, permits and registrations of
Seller, compliance with any applicable provisions of Dutch Law listed in Section
4.03(a) of the Parent Disclosure Schedule and a notice to the SER (collectively,
the "PARENT REQUIRED APPROVALS"), no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Authority is necessary
for the execution, delivery and performance by Parent and Purchaser of this
Agreement or the consummation by Parent and Purchaser of the transactions
contemplated hereby, except for failures to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notices which do not
have, and would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the ability of Parent or Purchaser to
perform their respective obligations under this Agreement.
(b) Neither the execution, delivery and performance of this Agreement
by Parent or Purchaser nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) conflict with or result in any
breach of any provision of the respective articles of association or by-laws
(or similar governing documents) of Parent or Purchaser, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default, require consent, or result in the loss of a
material benefit under or give rise to a right to permit or require the
purchase or sale of
40
assets or securities under, give rise to any right of termination,
amendment, cancellation or acceleration of any right or obligation under,
any of the terms, conditions or provisions of any Contract or other
instrument or obligation to which any of Parent, any Parent Significant
Subsidiary or Purchaser is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) provided that filings,
notifications, licenses, permits, authorizations, consents and approvals
referenced in Section 4.03(a) have been made or obtained, violate any Law,
applicable to Parent, any Parent Significant Subsidiary or Purchaser or any
of their respective properties or assets, except in the case of (ii) and
(iii) for violations, breaches or defaults that do not have and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the ability of either of Parent or Purchaser to perform
their respective obligations under this Agreement or to consummate the
transactions contemplated hereby.
Section 4.04. Regulatory Matters. (a) Each of Parent and Purchaser is
legally, financially and otherwise qualified to be an FCC licensee, and to
acquire, own and operate Seller's facilities licensed by the FCC under the
Communications Act. Each of Parent and Purchaser knows of no fact that would,
under the Communications Act and the existing rules, regulations, policies and
procedures of the FCC, (i) disqualify Parent or Purchaser as a transferee or
assignee of the FCC licenses or as the owner of such FCC licenses and operator
of the associated facilities, (ii) cause the FCC to fail to approve in a timely
fashion the application for the FCC approval of the transaction contemplated by
this Agreement or (iii) cause the FCC to deny a request to update the "Permitted
Space Station List" to reflect Purchaser as the owner and operator of the Seller
Satellites, or to impose a condition that would, or would reasonably be expected
to, have a material adverse effect on Parent, its Affiliates or Purchaser or a
Material Adverse Effect. No waiver of any FCC rule or policy that would
materially delay FCC approval is necessary to be obtained for the grant of the
applications for the transfer or assignment of the FCC licenses to Purchaser,
nor will processing pursuant to any exception to a rule of general applicability
be requested or required in connection with the consummation of the transactions
contemplated by this Agreement.
(b) Each of Parent and Purchaser is legally and otherwise qualified to
enter into and/or assume obligations under contracts with the government of
the United States. Each of Parent and Purchaser knows of no fact that would,
under applicable Law, disqualify such Parent or Purchaser as a party to any
such contract with the United States government.
Section 4.05. Information Supplied. None of the information supplied or
to be supplied by any of Parent, Purchaser or their respective Affiliates for
inclusion in the Shareholder Circular or any document filed with any
Governmental Authority (including, in each case, any amendments or supplements
thereto) and any other documents included therein will, on the date the
Shareholder Circular is mailed to Seller's shareholders or, as applicable, the
date on which the applicable filing is made, or at the time immediately
following any amendment or supplement to the Shareholder Circular or such filing
or at the time the Seller Shareholders Meeting is held, contain any untrue
statement of a material fact or omit to state any material fact
41
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 4.06. Litigation. As of the date hereof, there is no Action
pending or, to the knowledge of Parent, threatened, against any of Parent, the
Parent Significant Subsidiaries or Purchaser, which questions the validity of
this Agreement or any action to be taken by any of Parent, the Parent
Significant Subsidiaries or Purchaser in connection with the consummation of the
transactions contemplated hereby or could otherwise prevent or delay the
consummation of the transactions contemplated by this Agreement.
Section 4.07. Interim Operations of Purchaser. Purchaser has engaged in
no business other than in connection with the transactions contemplated by this
Agreement.
Section 4.08. Brokers. None of Parent or Purchaser or any of their
Affiliates has made any agreement or arrangement with any broker, finder or
investment banker relating any brokerage, finder's or other fee or commission or
expense reimbursement in connection with the transactions contemplated by this
Agreement which will or may give rise to any valid claim against Seller or any
of its Subsidiaries.
Section 4.09. Financial Ability. (a) Purchaser has received, accepted
and agreed to (i) one or more valid and binding commitment letters from certain
lenders (collectively, the "DEBT FINANCING COMMITMENT LETTER"), committing them
to provide to Purchaser (or Affiliates of Purchaser) debt financing for the
transactions contemplated hereby, subject to the terms and conditions set forth
therein (such debt financing, the "DEBT FINANCING") and (ii) valid and binding
commitment letter from certain Affiliates of Parent (the "EQUITY FINANCING
COMMITMENT LETTER"), committing them to provide to Purchaser equity financing
for the transactions contemplated hereby, subject to the terms and conditions
set forth therein (such equity financing, the "EQUITY FINANCING" and together
with the Debt Financing, the "FINANCING"). True and complete copies of the
executed Debt Financing Commitment Letter and the Equity Financing Commitment
Letter have been delivered to Seller on or prior to the date hereof.
(b) As of the date hereof, the Debt Financing Commitment Letter and the
Equity Financing Commitment Letter delivered to Seller are in full force and
effect and are not subject to the execution and delivery of any other
Contracts.
(c) The aggregate proceeds of the Financing will be sufficient to pay
the Purchase Price, the Transfer Taxes payable pursuant to Section 2.03 and
all fees and expenses required to be paid as a condition to the consummation
of the Financing. No event has occurred which, with or without notice, lapse
of time or both, would reasonably be expected to constitute an event of
default on the part of Parent or Purchaser under the Equity Financing
Commitment Letter or the Debt Financing Commitment Letter that has not been
waived or remedied to the satisfaction of the lenders under the Debt
Financing Commitment Letter, within 30 days of the date of occurrence of
such event of default. Parent has fully paid any and all commitment fees or
other fees on the dates and to the
42
extent required by the Equity Financing Commitment Letter and the Debt
Financing Commitment Letter.
Section 4.10. Investigation by Parent and Purchaser. Each of Parent and
Purchaser is experienced and sophisticated with respect to the transactions
contemplated by this Agreement. In entering into this Agreement, neither Parent
nor Purchaser is relying on the accuracy or completeness of any information or
materials provided (whether in writing or orally) by or on behalf of Seller, its
Subsidiaries, any of its Affiliates or any of their respective employees, agents
or representatives, except for those representations and warranties contained in
Article III of this Agreement.
ARTICLE V
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 5.01. Conduct of Business of Seller. Except for matters set
forth in the Seller Disclosure Schedule or as otherwise permitted or
contemplated by any provision of this Agreement or required by applicable Law or
in connection with the Cash Dividend, the Distribution, the Retained Cash Amount
and the Seller Liquidation, during the period from the date hereof to the
Closing Date, Seller will, and will cause each of its Subsidiaries to, conduct
its operations, and not take any action except in the ordinary course of
business consistent with past practice and in accordance with applicable Law,
use its reasonable best efforts to preserve its current business organizations,
keep available the services of its current officers and employees, preserve its
assets and properties in good repair and condition, maintain in full force and
effect substantially the same levels of coverage of insurance with respect to
its assets, operations and activities as are in effect on the date hereof,
continue to make capital expenditures pertaining to its business in accordance
with Seller's capital budget existing on the date hereof and delivered to
Parent, maintain the Seller Permits in full force and effect and shall timely
file and prosecute any necessary applications for renewal of the Seller Permits,
collect its receivables and preserve its relationships with Governmental
Authorities, customers, suppliers, licensors, licensees, distributors and others
having material business dealings with it. Except for matters set forth in the
Seller Disclosure Schedule or as otherwise permitted or contemplated by any
provision of this Agreement or required by applicable Law and except for any
actions in the ordinary course consistent with past practice or in connection
with the Cash Dividend, the Distribution, the Retained Cash Amount and the
Seller Liquidation, from the date hereof to the Closing Date, Seller will not,
and will not permit any of its Subsidiaries to, without the prior written
consent of Parent, which consent will not be unreasonably withheld or delayed:
(a) cause, adopt or propose any amendments to the Seller Articles or
any charter documents of its Subsidiaries or the terms of any outstanding
securities of Seller;
(b) authorize for issuance, issue, sell, deliver, transfer, pledge,
encumber or otherwise subject to any Lien (other than a Permitted Lien) or
agree or commit to issue, sell, deliver, transfer, pledge, encumber or
otherwise subject to any Lien (other than a Permitted Lien) (whether through
the issuance or granting of options, warrants,
43
commitments, subscriptions, rights to purchase or otherwise) any stock of
any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including any stock options or stock
appreciation rights) or make any payments based on the market price or value
of shares or other capital stock of Seller, except for (i) the transfer or
issuance of Seller Shares in connection with the exercise of Seller Stock
Options or the vesting of Seller Restricted Shares, in each case outstanding
on the date hereof or granted after the date hereof as permitted herein or
(ii) the attachment of Seller Shares in connection with debt collection
proceedings against certain customers of Seller;
(c) (i) adjust, split, subdivide, combine, recapitalize or reclassify
any shares of its capital stock; (ii) declare, set aside, make or pay any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock (other than dividends
by wholly-owned Subsidiaries and ordinary dividends on Seller Shares); (iii)
make any other actual, constructive or deemed distribution in respect of any
shares of its capital stock or otherwise make any payments to shareholders
in their capacity as such; (iv) directly or indirectly redeem, purchase,
repurchase, retire or otherwise acquire any of its securities or (v) grant
any Person any right or option to acquire any shares of its capital stock;
(d) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of Seller;
(e) except for letters of credit issued in connection with pre-payments
by customers in an aggregate amount up to U.S.$5 million or borrowings under
existing lines of credit (or any replacement thereof) in an aggregate amount
up to U.S.$5 million, (i) repurchase, repay, incur or assume any long-term
or short-term debt or issue any debt securities; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person; (iii)
make any loans, advances or capital contributions to, or investments in, any
other Person (other than to Subsidiaries of Seller); (iv) pledge or
otherwise encumber shares of capital stock; or (v) mortgage or pledge any of
its material assets, tangible or intangible, or create any Lien (other than
a Permitted Lien) thereupon;
(f) except (i) to satisfy contractual obligations existing on the date
hereof, and (ii) for any retention or employment agreement, plan or
arrangement entered into or established in connection with the transactions
contemplated hereby and set forth in Section 5.01(f) of the Seller
Disclosure Schedule, (A) terminate, establish, implement, adopt, amend,
enter into, make any new, accelerate the vesting or payment of any existing
grants or awards under, amend or otherwise modify any Seller Plan or other
employment, severance, change in control, termination or other similar
agreement or arrangements (including the funding arrangements in respect
thereof) grant plan, policy or program that would be a Seller Plan if in
effect as of the date hereof; (B) increase or commit to increase the
commissions, compensation or benefits, including fringe benefits,
44
payable or accrued or that would become payable by Seller or any of its
Subsidiaries or accrue in respect to any employee, director or officer of
Seller; (C) waive or commit to waive any debts due to Seller or any of its
Subsidiaries from any employee or director of any such company; (D) grant
any severance or termination pay to any present or former director, officer
or employee of Seller or its Subsidiaries, (E) loan or advance any money or
other property to any present or former director, officer or employee of
Seller or its Subsidiaries or (F) grant any equity or equity-based awards.
(g) (i) assign, transfer, sell, license, lease (as lessor), sell and
leaseback or otherwise dispose of, or pledge, mortgage, encumber or
otherwise subject to any Lien, any amount of Seller's or any of its
Subsidiaries' property or assets, whether tangible or intangible, that is
material to Seller and its Subsidiaries, taken as a whole; or (ii) acquire
any assets that are material, individually or in the aggregate, to Seller
and its Subsidiaries, taken as a whole;
(h) except as may be required as a result of a change in Law or in U.S.
GAAP, change any of the accounting principles or practices used by it which
would materially affect its reported consolidated assets, liabilities or
results of operations;
(i) (i) acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any corporation, partnership or other business
organization or division thereof or any material equity interest therein or
(ii) authorize or make any new capital expenditure or expenditures or
investments exceeding U.S.$3 million in the aggregate other than (A) as
contemplated by Seller's current capital expenditure budget or (B) necessary
and advisable to maintain the assets of Seller and its Subsidiaries in good
working order;
(j) make, change or revoke any material Tax election, or settle or
compromise any material claim or assessment or surrender any right to a
material claim for a Tax refund, in each case, if such action could
reasonably be expected to increase the tax liability of Seller or any
Subsidiary or decrease any Tax attribute of Seller or any existing
Subsidiary on the Closing Date;
(k) make or revoke any material Tax election, or settle or compromise
any material Tax liability, or change (or make a request to any taxing
authority to change) any material aspect of its method of accounting for Tax
purposes;
(l) pay, discharge, waive, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than as required by their terms in effect on
the date hereof;
(m) settle or compromise any pending litigation in which Seller or any
of its Subsidiaries is a named defendant for a cash settlement amount in
excess of U.S.$1 million in the aggregate;
45
(n) enter into any agreement or arrangement that limits or otherwise
restricts Seller or any of its Subsidiaries or any successor thereto in any
material respect or that would, after the Closing Date, limit or restrict
Parent in any material respect from engaging or competing in any line of
business or in any geographic area;
(o) purchase a new, renew, or amend an existing, insurance policy;
(p) amend in any material respect, terminate or cancel any Seller
Material Contract or enter into any Contract that would be a Seller Material
Contract if in effect on the date hereof; or
(q) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.01(a) through 5.01(p) or any
action which would (i) make any of the representations or warranties of
Seller contained in this Agreement (A) which are qualified as to
materiality, untrue or incorrect or (B) which are not so qualified, untrue
or incorrect in any material respect or (ii) except as otherwise permitted
by Section 6.04, reasonably be likely to result in any of the conditions to
the consummation of the transactions contemplated by this Agreement set
forth in Article IX hereof not being satisfied.
Section 5.02. Access to Information. (a) Between the date hereof and
the Closing Date, Seller will (i) give Parent and Purchaser and their authorized
representatives (including counsel, financial advisors and accountants) and the
prospective lenders to Parent and Purchaser (and their counsel and advisors)
reasonable access during normal business hours to all key employees, and key
facilities including plants, offices, properties, warehouses and to all books
and records of Seller and its Subsidiaries and which access shall be subject to
the reasonable security procedures of Seller and its Subsidiaries, (ii) cause
Seller's officers and key employees and those of its Subsidiaries and its
auditors, counsel and financial advisors to cooperate with Parent and Purchaser
in their investigation of the business of Seller and its Subsidiaries and to
furnish Parent and Purchaser and their authorized representatives and the
prospective lenders to Parent and Purchaser (and their counsel and advisors)
with such financial and operating data and other information with respect to the
business, properties and personnel of Seller and its Subsidiaries as Parent or
Purchaser may from time to time reasonably request and (iii) deliver (x)
quarterly management reports and financial results and (y) to the extent they
exist, monthly financial reports and reports with respect to material satellite
anomalies as soon as practicable after they become available; provided, however,
that Seller may withhold (A) any document or information that is subject to the
terms of a confidentiality agreement with a third party; (B) any document or
information, if such disclosure would violate applicable Law or (C) such
portions of documents or information which are subject to attorney-client
privilege and the provision of which, as determined by Seller's counsel, may
eliminate the privilege pertaining to such documents, in each case, only after
Seller has endeavored in good faith to enter into arrangements or obtain
consents or waivers that would permit Seller to make such document or
information available to Parent, but has failed to enter into such arrangements
or obtain such consents or waivers; provided, further, however, that access by
Parent and Purchaser and their
46
authorized representatives and the prospective lenders to Parent and Purchaser
(and their counsel and advisors) to competitively sensitive information shall be
restricted to those persons who have a need to know such information for due
diligence purposes.
(b) Each of Parent and Purchaser will hold and will cause its
authorized representatives to hold (including the prospective lenders to
Parent and Purchaser and their counsel and advisors) in confidence all
documents and information concerning Seller and its Subsidiaries furnished
to Parent or Purchaser in connection with the transactions contemplated by
this Agreement pursuant to the terms of the Confidentiality Agreement
between Blackstone Management Partners IV LLC and Seller, dated March 5,
2004 (the "CONFIDENTIALITY AGREEMENT").
Section 5.03. Parent Covenants. Except as otherwise expressly provided
in this Agreement or as set forth in the Parent Disclosure Schedule, prior to
the Closing Date, neither Parent nor any of its Subsidiaries will, without the
prior written consent of Seller take, propose to take, or agree in writing or
otherwise to take, any action which (a) would make the representations or
warranties of Parent and Purchaser in this Agreement, (i) which are qualified as
to materiality, untrue or incorrect or (ii) which are not so qualified, untrue
in any material respect or (b) would reasonably be likely to result in any of
the conditions to the consummation of the transactions contemplated by this
Agreement and set forth in Article IX hereof not being satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Preparation of the Shareholder Circular. Seller shall
prepare the Shareholder Circular and cause notice for the Seller Shareholders
Meeting to be published in accordance with Article 22.5 of the Seller Articles
as soon as practicable on or after the date hereof. Parent and Purchaser shall
promptly provide any information or other assistance, reasonably requested in
connection with the foregoing. Prior to publishing the Shareholder Circular (or
any amendment or supplement thereto) with respect thereto, Seller (i) shall
provide Parent and its counsel an opportunity to review and comment on such
document and (ii) shall give reasonable consideration to all comments proposed
by Parent and its counsel. Seller shall make the notice referred to above, the
Shareholder Circular and all other relevant documents in connection with the
Seller Shareholder Meeting available on Seller's website as soon as practicable
after the publication of notice for the Seller Shareholder Meeting.
Section 6.02. Board Actions and Shareholders Meeting. Seller, acting
through the Seller Boards, shall, in accordance with the Seller Articles,
convene and hold the Seller Shareholders Meeting for the purpose of obtaining
the Required Seller Vote within 35 days after publishing the Shareholder
Circular unless Seller is prevented from doing so by applicable Law or
circumstances not within the reasonable control of Seller. Except as otherwise
permitted by Section 6.04, each of the Seller Boards shall recommend approval of
this Agreement and the transactions contemplated hereby, which recommendation
will be included in
47
the Shareholder Circular, and shall use their reasonable best efforts to solicit
the approval of the shareholders of Seller in connection with the Required
Seller Vote.
Section 6.03. Reasonable Best Efforts. (a) Subject to the terms and
conditions of this Agreement, each Party will use its reasonable best efforts
(except where a different efforts standard is specifically contemplated by this
Agreement, in which case such different standard shall apply) to take, or cause
to be taken, all actions and to do, or cause to be done, and to assist and
cooperate with each of the other Parties to this Agreement in doing, all things
necessary, proper or advisable under applicable Law to consummate the
transactions contemplated by this Agreement, as promptly as practicable,
including (i) defending Actions challenging this Agreement, the resolutions of
the Seller Boards or the Seller Shareholder Meeting with respect to the
transactions contemplated hereby or the consummation of any of the transactions
contemplated hereby, including seeking to have any stay or temporary restraining
order or injunction vacated and reversed; (ii) taking all reasonable actions
necessary to cause the conditions precedent in Article IX to be satisfied,
including any reasonable actions necessary to avoid any Action by any
Governmental Authority; (iii) taking all reasonable actions necessary to obtain
all necessary consents, approvals, written permissions, confirmations and
waivers from third parties, including any Governmental Authority; and (iv)
executing and delivering any additional instruments reasonably necessary to
consummate the transactions contemplated by this Agreement. In furtherance and
not in limitation of the foregoing, each Party agrees to make or cause to be
made an appropriate filing of all filings that are advisable or required by
applicable Antitrust Laws, the Communications Act, including the rules,
regulations and policies promulgated thereunder by the FCC, any applicable Law
of The Netherlands, any foreign investment Law and in connection with any other
Seller Required Approvals and Parent Required Approvals with respect to the
transactions contemplated hereby, as promptly as practicable, and in no event
later than 15 Business Days after the date hereof, and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to any applicable Law of The Netherlands, the European Union,
the United States or other Antitrust Laws and use its reasonable best efforts to
take, or cause to be taken, all other actions consistent with this Section 6.03
necessary to cause the expiration or termination of the applicable waiting
periods under any applicable Law of The Netherlands, the European Union, the
United States or such other Laws as soon as practicable. Without limiting the
foregoing, each of the Parties shall request and shall use its reasonable best
efforts to obtain early termination of the waiting period provided for under the
HSR Act.
(b) Each of Parent and Seller shall, in connection with the efforts
referenced in Section 6.03(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under
applicable Antitrust Laws, the Communications Act, any applicable law of The
Netherlands, any foreign investment Law and in connection with any other
Seller Required Approvals and Parent Required Approvals, use its reasonable
best efforts to (i) cooperate to prosecute each application for approval
with reasonable diligence and otherwise use their reasonable best efforts to
obtain the grants of the applications as expeditiously as practicable,
including the exercise of reasonable diligence to comply with any request
from the FCC or AT for additional documents,
48
information or materials; (ii) cooperate in all respects with the other
Party in connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a
private party; (iii) notify the other Party promptly following any
communication received by such Party from, or given by such Party to the AT,
the Federal Trade Commission, the Antitrust Division of the Department of
Justice, the FCC or any other Governmental Authority and of any
communication received or given in connection with any proceeding by a
private party and, in each case, provide the other Party with a copy of any
written communication promptly after the receipt thereof; and (iv) oppose
any petitions to deny or other objections filed with respect to the
applications for any FCC or AT approval, including any administrative or
judicial review and any requests for reconsideration or review of any FCC or
AT approval, in each case regarding any of the transactions contemplated
hereby. Each Party agrees to comply with any condition imposed on it (or its
Affiliates) by the FCC or AT in granting the application for transfer or
assignment of the FCC or AT licenses, except that no Party shall be required
to comply with a condition if compliance with the condition would reasonably
be expected to have a material adverse effect on Parent or its Affiliates or
have a Material Adverse Effect (other than any such conditions generally
applicable to satellite space stations or earth station licensees within a
relevant jurisdiction). Each of Parent and Purchaser shall take or cause to
be taken all actions necessary, appropriate or desirable to be taken by
Parent and Purchaser (and their respective Affiliates) to permit the FCC or
AT to approve in a timely fashion the FCC or AT transfer or assignment
application, except that neither Seller, its Affiliates, Parent, its
Affiliates, nor Purchaser shall be required to take any action that would be
reasonably likely to have a material adverse effect on Parent, its
Affiliates, or Purchaser or have a Material Adverse Effect.
(c) In furtherance and not in limitation of the covenants of the
Parties , contained in Sections 6.03(a) and 6.03(b), each of Parent and
Seller shall use its reasonable best efforts to resolve such objections if
any, as may be asserted by a Governmental Authority or other Person with
respect to the transactions contemplated hereby, under the Communications
Act, any applicable Law of The Netherlands, any Antitrust Law or any foreign
investment Law. In connection with the foregoing, if any administrative or
judicial action or proceeding, including any proceeding by a private party,
is instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of the Communications Act, any
applicable Law of The Netherlands, any Antitrust Law or any foreign
investment Law, each of the Parties shall cooperate in all respects with the
other Parties and use its respective reasonable best efforts to contest and
resist any such action or proceeding and to have vacated, lifted, reversed
or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 6.03 shall (i) limit a Party's right to
terminate this Agreement pursuant to Section 10.02(a) or (c) so long as such
Party has theretofore complied in all material respects with its obligations
under this Section 6.03, (ii) require Parent to agree to any conditions
49
which would impose (A) any limitations on Parent's ownership or operation of
all or any material portion of Seller's or any of its Subsidiaries' or
Purchaser's or Affiliates' business or assets, or to compel Parent or any of
its Subsidiaries to dispose of or hold separate all or any material portion
of Seller's or any of its Subsidiaries' business or assets, (B) any
obligations on Parent or any of its Subsidiaries or Seller or any of its
Subsidiaries to maintain facilities, operations, places of business,
employment levels, products or businesses or (C) any other obligation,
restriction, limitation, qualification or other conditions, which, in the
case of any of clauses (A) through (C) above, would, individually or in the
aggregate, reasonably be expected to have a material adverse effect on
Purchaser or any of its Affiliates or have a Material Adverse Effect or
(iii) require Seller to agree to any dispositions, limitations, consents,
commitments, agreements or other actions, other than any disposition,
limitation, consent, commitment agreement or other action that in each such
case may be conditioned upon the consummation of the transactions
contemplated by this Agreement.
(d) For the avoidance of doubt, the covenants of the Parties contained
in Sections 6.03(a) and 6.03(b) shall apply to notifications, filings,
agreements, or approvals required or advisable to be made with, entered
into, or obtained from the U.S. Department of State (Directorate of Defense
Trade Controls, Bureau of Political-Military Affairs), CFIUS under
Exon-Xxxxxx, or the U.S. federal executive branch agencies with
responsibility for law enforcement or homeland security.
(e) Parent and Purchaser shall not, without the prior written consent
of Seller, which consent Seller shall not unreasonably withhold or delay:
(i) take any action which would or is reasonably likely to (A)
adversely affect the ability of Parent or Purchaser to
obtain any necessary approvals of any Governmental
Authority required for the transactions contemplated
hereby; (B) adversely affect Parent's or Purchaser's
ability to perform its covenants and agreements under this
Agreement; or (C) result in any of the conditions to the
performance of the Parties' obligations hereunder not being
satisfied; or
(ii) agree or make any commitment to take any actions prohibited
by this Section 6.03(e).
(f) Seller shall provide reasonable notice and consult with Parent in
the event that, after the date hereof, Seller continues negotiations in
connection with the renewal or replacement of the Credit Agreement.
Section 6.04. Acquisition Proposals. (a) Seller will not, and will
cause its Subsidiaries and each officer, director, employee, consultant,
financial advisor, auditor, investment banker, attorney, accountant, agent or
other advisor or representative (collectively, the "REPRESENTATIVES") of Seller
or any of its Subsidiaries not to, directly or indirectly, (i) solicit,
50
initiate, facilitate or encourage (including by way of furnishing information)
the making by any Person (other than the parties hereto) of any Acquisition
Proposal; (ii) participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to or in connection with, or
take any other action to facilitate, any Acquisition Proposal or any inquiries
with respect to, or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal; or (iii) enter into
any agreement, understanding or arrangement with respect to an Acquisition
Proposal, or approve or recommend or propose to approve or recommend any
Acquisition Proposal or any agreement, arrangement or understanding relating to
an Acquisition Proposal (or resolve or authorize or propose to agree to do any
of the foregoing); provided that, nothing contained in this Section 6.04(a)
shall prohibit Seller from furnishing information to, or entering into
discussions or negotiations with, any Person that makes an unsolicited bona fide
Acquisition Proposal, if (i) the Seller Boards determine in good faith that such
Acquisition Proposal is reasonably likely to lead to a Superior Proposal, (ii)
to the extent such Person enters into a confidentiality and/or standstill
agreement with Seller on terms in substance less favorable to Seller or more
favorable to such Person than the corresponding terms of the Confidentiality
Agreement (the "REVISED CONFIDENTIALITY TERMS"), Seller provides Parent with a
copy of the Revised Confidentiality Terms and agrees that the corresponding
terms of the Confidentiality Agreement shall, if so requested by the Affiliates
of Parent which are parties thereto, be amended (including, if there are no
corresponding Revised Confidentiality Terms, by deleting the relevant provisions
of the Confidentiality Agreement) so that they are substantially similar to the
Revised Confidentiality Terms and (iii) the Required Seller Vote has not yet
been obtained. Seller shall notify Parent of having received any written
Acquisition Proposal (and provide a copy thereof) and any other Acquisition
Proposal with respect to which it proposes to take the actions permitted by
clauses (i) and (ii) in the proviso to the preceding sentence promptly, and in
any event no later than two Business Days after its receipt thereof, and shall
keep Parent reasonably informed on a current basis as to the status of any
discussions and negotiations subject to applicable Law. Immediately after the
execution and delivery of this Agreement, Seller will, and will cause its
Subsidiaries, and its and their Representatives to, cease and terminate any
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any possible Acquisition Proposal unless such Persons
makes an unsolicited Acquisition Proposal and Seller has complied with the
provisions of this Section 6.04(a) in all material respects. Nothing in this
Section 6.04 shall permit Seller to terminate this Agreement or affect any other
obligations of Seller under this Agreement (except as specifically provided in
Sections 10.03(b)). "SUPERIOR PROPOSAL" shall mean an unsolicited Acquisition
Proposal with respect to which the Seller Boards have determined in good faith,
after consultation with their financial advisors and legal advisors and taking
into account all relevant factors, including the identity of the offeror and all
legal, financial, regulatory and other aspects of the proposal, including the
terms of any financing, that (x) if accepted, such Acquisition Proposal would
result in a transaction more favorable from a financial point of view to
Seller's shareholders than the transactions contemplated by this Agreement and
(y) is reasonably capable of being consummated.
(b) The Seller Boards will not withdraw, modify or amend, or propose to
withdraw, modify or amend, in any manner adverse to Parent, their respective
51
recommendations that Seller shareholders vote in favor of the transactions
contemplated by this Agreement (or publicly announce any intention to do so)
unless (i) an unsolicited bona fide written Superior Proposal is pending at
the time the Seller Boards determine to take any such action, (ii) Seller
shall have complied in all material respects with this Section 6.04, and
(iii) Seller shall have notified Parent at least five Business Days in
advance of its intention to effect such withdrawal, modification or
amendment and shall have negotiated in good faith with Parent during such
five Business Day period (to the extent Parent desires to negotiate) to make
adjustments in the terms and conditions of this Agreement such that such
proposal would no longer be determined in good faith by the Seller Boards to
constitute a Superior Proposal.
(c) Notwithstanding anything in this Agreement to the contrary, nothing
shall prohibit Seller or the Seller Boards from communicating to its
shareholders a position with respect to any Acquisition Proposal to the
extent required by applicable Law or from making such disclosure to the
Seller shareholders which the Seller Boards determine is otherwise required
under applicable Law.
Section 6.05. Public Announcements. Each of Parent and Seller will
consult with the other and provide the other with a reasonable opportunity to
comment thereon, before issuing any press release, making any filing with the
SEC or the FCC or otherwise making any public statements with respect to this
Agreement or the transactions contemplated by this Agreement and the
Confidentiality Agreement and shall not issue any such press release, make any
such SEC or FCC filing or make any such public statement prior to such
consultation, except as may be required by applicable Law, the Seller Articles
or under any listing agreement or applicable rules of any securities exchange.
Section 6.06. Indemnification; Directors' and Officers' Insurance. (a)
Each of Parent and Purchaser agrees that all rights to exculpation and
indemnification for acts or omissions in favor of the current or former
directors (including in their capacity of members of any committee of the
Boards), members of Seller's executive management committee or officers of
Seller occurring prior to or at the Closing Date (the "INDEMNIFIED PARTIES") as
provided in the Seller Articles or in any agreement listed in the Seller
Disclosure Schedule shall continue in full force and effect in accordance with
their terms from the Closing Date until the expiration of the applicable statute
of limitations with respect to any claims against such directors or officers
arising out of such acts or omissions and all exculpation and indemnification
obligations of Seller for acts or omissions occurring prior to or at the Closing
Date set forth in the Seller Articles or in any agreement listed in the Seller
Disclosure Schedule shall be assumed by Purchaser from and after the Closing and
shall constitute Assumed Liabilities. For the avoidance of doubt, all
obligations of Seller to the Indemnified Parties for acts or omissions occurring
prior to or at the Closing Date shall constitute Assumed Liabilities under this
Agreement .
(b) For a period of six years after the Closing Date, Parent shall
cause to be maintained in effect policies of at least the same coverage as
the policies of directors' and officers' liability insurance maintained by
Seller for the benefit of those persons who are
52
covered by such policies on the Closing Date with respect to matters
occurring at or prior to the Closing Date, to the extent that such liability
insurance can be maintained at a cost to Parent not greater than 300 percent
of the last annual premium for the current Seller directors' and officers'
liability insurance as set forth in the Seller Disclosure Schedule; provided
that, if such insurance cannot be so maintained or obtained at such costs,
Parent shall cause Purchaser to maintain or obtain as much of such insurance
as can be so maintained or obtained (not to exceed six years from the
Closing Date) at a cost equal to 300 percent of the last annual premium of
Seller for such insurance.
(c) Without limiting Parent's or Purchaser's obligations under Section
6.06(a), from and after the Closing Date, to the fullest extent permitted by
Law, each of Parent and Purchaser shall indemnify, defend and hold harmless
each Indemnified Party, to the same extent as provided in the Seller
Articles on the date hereof, and the Liquidator against all Losses to the
extent arising from, relating to, or otherwise in respect of, any actual or
threatened Action in respect of actions or omissions occurring at or prior
to the Closing Date in connection with such Indemnified Party's duties as an
officer or director of Seller or any of its Subsidiaries or the Liquidator's
duties pursuant to the Seller Liquidation, including in respect to this
Agreement and the transactions contemplated hereby; provided, however, that
no Indemnified Party nor the Liquidator shall be entitled to indemnification
under this Section 6.06(c) for Losses arising out of actions or omissions by
such Indemnified Party or the Liquidator, as the case may be, constituting
(i) a material breach of this Agreement, (ii) criminal conduct, (iii) any
material violation of national, state or foreign securities laws or (iv) any
action taken in bad faith. In the event of any Loss described in the
preceding sentence, (i) Purchaser shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties or the Liquidator (and
reasonably acceptable to Purchaser) on a monthly basis promptly after
statements are received in advance of settlement, judgment or other
resolution thereof to such Indemnified Party or the Liquidator, as the case
may be, upon request (provided such Indemnified Party or the Liquidator, as
applicable, provides an undertaking to repay all advanced expenses if it is
ultimately determined that such Person is not entitled to indemnification)
and (ii) Purchaser shall cooperate in the defense of any such matter;
provided that Purchaser shall not be obligated pursuant to this Section
6.06(c) to pay the fees and expenses of more than one counsel for all
Indemnified Parties in any jurisdiction (selected by a plurality of the
applicable Indemnified Parties) with respect to any single action except to
the extent that two or more of such Indemnified Parties shall have
conflicting interests in the outcome of such action. Notwithstanding the
foregoing, neither Parent nor Purchaser shall have any obligations to an
Indemnified Party or to the Liquidator with respect to (i) any Retained
Liabilities or (ii) an Action pending in front of a court of competent
jurisdiction if such court shall determine that indemnification of such
Person in the manner contemplated hereby is prohibited by applicable Law and
such determination shall have become final and non-appealable.
Section 6.07. Notification of Certain Matters. Seller shall, upon
obtaining knowledge of any of the following, give prompt notice to Parent, and
Parent shall, upon
53
obtaining knowledge of any of the following, give prompt notice to Seller, of
(i) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would reasonably be likely to cause any representation
or warranty of such Party contained in this Agreement, which is qualified as to
materiality, to be untrue or inaccurate, or any representation or warranty of
such Party not so qualified, to be untrue or inaccurate in any material respect,
at or prior to the Closing Date, (ii) any failure in any material respect of any
of Seller, Parent or Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause any condition to the
obligations of any Party to effect the transactions contemplated hereby not to
be satisfied, (iv) any notice or other written communication from any
Governmental Authority in connection with the transactions contemplated by this
Agreement, (v) any Actions (or communications indicating that the same may be
contemplated) commenced or threatened against any of Seller, Parent or
Purchaser, as the case may be, or any of their respective Subsidiaries which, if
pending on the date hereof, would have been required to have been disclosed
pursuant to Section 3.10 or Section 4.06 or which relate to the consummation of
the transactions contemplated by this Agreement or (vi) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement; provided that, the delivery of any notice pursuant to this Section
6.07 shall not cure such breach or non-compliance or limit or otherwise affect
the rights or remedies available hereunder to the Party receiving such notice.
Seller shall consult with Parent, and consider reasonable requests made by
Parent, regarding the attachment of Seller Shares held by certain customers of
Seller in connection with debt collection proceedings against such customers.
Section 6.08. Regulatory Filings. Seller shall furnish to Parent copies
of all reports and other documents which it files with the Trade Register, the
AFM, Euronext, the SER, the SEC, the NYSE, the AT, the Dutch Ministry of
Economic Affairs, or the FCC on or after the date hereof, and Seller represents
and warrants that as of the respective dates thereof, such reports and other
documents will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. With respect to filings with the AT, the Dutch Ministry of
Economic Affairs and the FCC, the obligation to provide documents to Parent
shall not include, in the case of the FCC, filings in proceedings of general
applicability, and in the case of the AT or the Dutch Ministry of Economic
Affairs, routine preliminary coordination documents and documents not directly
related to the Dutch Permits. Seller shall provide to Parent periodic oral
reports on the status of coordination efforts. The audited consolidated
financial statements and unaudited consolidated interim financial statements
included in such reports (including any related notes and schedules) will comply
as to form in all material respects with applicable accounting requirements,
Dutch and foreign applicable Laws and the published rules and regulations of
Euronext, the AFM, the SEC, the NYSE and the FCC with respect thereto and will
fairly present, in conformity with U.S. GAAP applied on a consistent basis
(except as specifically indicated in the notes thereto), the consolidated
financial position of Seller and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended. Seller's
54
obligation with respect to the FCC filings or information shall be limited to
publicly available information and shall not require disclosure of confidential
information.
Section 6.09. Expenses. All Expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Party
incurring such Expenses and, following the Closing, all Expenses of Seller
incurred prior to or as of the Closing and not theretofore paid shall constitute
Assumed Liabilities.
Section 6.10. Financing. (a) Each of Parent and Purchaser shall use its
commercially reasonable efforts to obtain the Debt Financing on the terms and
conditions described in the Debt Financing Commitment Letter, including using
commercially reasonable efforts to (i) negotiate definitive agreements with
respect thereto on terms and conditions contained therein (or otherwise on terms
and conditions which do not reduce the aggregate amount of the Debt Financing or
amend the conditions to the drawdown of the Debt Financing or are adverse to the
interests of Seller in any other respect), (ii) satisfy all conditions
applicable to Parent and Purchaser in such definitive agreements that are within
its control, (iii) comply with its obligations under the Debt Financing
Commitment Letter, (iv) enforce its rights under the Debt Financing Commitment
Letter and (v) in the event the Debt Financing Commitment Letter is terminated
prior to the Closing, obtain a renewal of, or a substitute for, the Debt
Financing Commitment Letter on terms and conditions comparable in all material
respects to the terms and conditions contemplated in the Debt Financing
Commitment Letter or on more favorable terms to Purchaser. In the event any
portion of the Debt Financing becomes unavailable on terms and conditions
comparable in all material respects to the terms and conditions contemplated in
the Debt Financing Commitment Letter, Parent and Purchaser shall use their
commercially reasonable efforts to arrange to obtain any such portion from
alternative sources on comparable or more favorable terms to Purchaser.
Purchaser shall give Seller prompt notice of it becoming aware of any material
breach by any party of the Debt Financing Commitment Letter or any termination
of the Debt Financing Commitment Letter. Parent shall keep Seller informed on a
reasonable basis in reasonable detail of the status of its efforts to arrange
the Financing and shall not permit any amendment or modification to be made to,
or any waiver of any material provision or remedy under, the Equity Financing
Commitment Letter or the Debt Financing Commitment Letter if such amendment,
modification, waiver or remedy reduces the aggregate amount of the Financing,
amends the conditions to the drawdown of the Financing or is adverse to the
interests of Seller in any other respect.
(b) Seller agrees to provide, and shall cause its Subsidiaries and its
and their respective Representatives to provide, all reasonable cooperation
reasonably in connection with the arrangement of the Debt Financing as may
be reasonably requested by Parent (provided that such requested cooperation
does not unreasonably interfere with the ongoing operations of Seller and
its Subsidiaries), including (i) participation in meetings, drafting
sessions, due diligence sessions, management presentation sessions and
sessions with rating agencies, (ii) furnishing Parent and its financing
sources with financial and other pertinent information regarding Seller as
may be reasonably requested by Parent (including projections and financial
statements), (iii) assisting Parent and its
55
financing sources in the preparation of (A) an offering document for any
debt raised to complete the transactions contemplated by this Agreement and
(B) materials for rating agency presentations, (iv) reasonably cooperating
with the marketing efforts of Parent and its financing sources for any debt
raised by Parent to complete the transactions contemplated by this
Agreement, including by participating in road shows, and (v) providing and
executing documents, including a certificate of the chief financial officer
of Seller with respect to solvency matters, comfort letters of accountants,
consents of accountants for use of their reports in any materials relating
to the Debt Financing and legal opinions, as may be reasonably requested by
Parent; provided that, none of Seller or any of its Subsidiaries or
Affiliates shall be required to pay any commitment or other similar fee or
incur any other Liability in connection with the Debt Financing (other than
Liabilities to be incurred by Subsidiaries of Seller at the Closing). Parent
shall, promptly upon request by Seller, reimburse Seller for all reasonable
out-of-pocket costs and expenses incurred by Seller or any of its
Subsidiaries in connection with such cooperation. Parent and Purchaser
shall, on a joint and several basis, indemnify and hold harmless Seller and
its Subsidiaries and their respective Representatives for and against any
and all Losses suffered or incurred by them in connection with the
arrangement of the Debt Financing and any information utilized in connection
therewith.
Section 6.11. Further Assurances. From and after the Closing Date, each
of the Parties shall execute and deliver such documents and other papers and
take such further actions as may reasonably be required to carry out the
provisions of this Agreement and the Ancillary Agreements and give effect to the
transactions contemplated hereby and thereby, including the execution and
delivery of such assignments, deeds and other documents as may be necessary to
transfer any Assets as provided in this Agreement. Without limiting the
foregoing, from and after the Closing (i) Seller shall (and shall cause its
Subsidiaries to) do all things necessary, proper or advisable under applicable
Law as requested by Parent to put Purchaser in effective possession, ownership
and control of the Assets and Parent and Purchaser shall cooperate with Seller
for such purpose and (ii) each of Parent and Purchaser shall do all things
necessary, proper and advisable under applicable Law as requested by Seller (A)
to transfer to Seller (or such other Person as Seller shall indicate) any
Excluded Assets that Purchaser may possess and (B) to assure that Purchaser,
rather than Seller or any of its Subsidiaries, is the obligor in respect of all
Assumed Liabilities, and Seller shall cooperate with Purchaser for such
purposes.
Section 6.12. Seller Liquidation. (a) Each of Parent and Purchaser
shall use its reasonable best efforts to (i) assist Seller to effect the Seller
Liquidation and take all actions reasonably requested by Seller for such
purpose, including by granting Seller and its Affiliates reasonable access to
the Assets and providing such other assistance as Seller may reasonably request;
and (ii) assist Seller to effect the Distribution as soon as practicable after
the Closing and prior to the commencement of the opposition period related to
the Seller Liquidation, including by undertaking to pay or discharge all
outstanding debts, liabilities and claims that are Assumed Liabilities that may
arise in connection with the Seller Liquidation.
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(b) Seller shall use the Retained Cash Amount to pay, perform and
discharge any obligations and liabilities that arise in connection with the
Seller Liquidation. Seller shall distribute, or cause to be distributed, any
part of the Retained Cash Amount that remains available as of the
consummation of the Seller Liquidation to an account designated by Purchaser
no later than two Business Days following the consummation of the Seller
Liquidation.
Section 6.13. Ancillary Agreements. On the Closing Date, each of
Purchaser and Seller shall execute and deliver each of the Ancillary Agreements
to which it is a party if such Ancillary Agreement has not been executed on the
date hereof.
Section 6.14. Work-around Undertaking. Without prejudice to the
respective rights of the parties under Section 6.03 and without limiting any of
their respective obligations under Section 6.03 with respect to periods
following the Closing, Seller and Purchaser shall cooperate in entering into
lawful arrangements from and after the Closing to provide that Purchaser shall
receive the benefits of all Assets, and be responsible for all Assumed
Liabilities, under each Permit (including Permits the transfer of which is
prohibited by applicable Law) and Contract under which the Assets will not be
transferred at Closing free and clear of Liens (other than Permitted Liens) or
under which the Liabilities will not be fully transferred, in either case as the
result of the failure to obtain a consent or approval or make a filing of
notification. Nothing in this Agreement shall be construed as an attempt to
transfer any Asset that is by its terms non-transferable without the consent of
another party.
ARTICLE VII
EMPLOYEE MATTERS
Section 7.01. Assignment by Operation of Law. The Parties acknowledge,
agree and accept that this Agreement qualifies as the transfer of an undertaking
under section 7:662-666 of the Dutch Civil Code (Burgerlijk Wetboek) ("DCC").
According to section 7:663 DCC, the following actions will occur by operation of
law:
(a) The employees who are on the employment rolls of Seller immediately
prior to the Closing Date and who are subject to the DCC will leave the
employment of Seller and will enter the employment of Purchaser effective as
of the Closing Date (the "TRANSFERRED SELLER EMPLOYEES"); and
(b) The terms and conditions of employment of the Transferred Seller
Employees with Purchaser will be identical, in full scope, to the terms and
conditions of employment of the Transferred Seller Employees with Seller
immediately prior to the Closing Date.
Section 7.02. Dutch Pension Plans. The Transferred Seller Employees are
participants in the pension plan arranged by Seller (the "SELLER PENSION PLAN"),
provided by ABN-AMRO Levensverzekering N.V. (the "SELLER PENSION PROVIDER").
Purchaser shall arrange
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an identical pension plan (the "PURCHASER PENSION PLAN" and a pension provider
("pensioenuitvoerder", the "PURCHASER PENSION PROVIDER") to be in place at the
Closing Date upon terms and conditions that do not result in any adverse effect
or reduction in the aggregate benefits that the Transferred Seller Employees are
eligible to accrue compared to the benefits which they would have been eligible
to accrue had their participation in the Seller Pension Plan continued
uninterrupted. Seller and Purchaser shall use all reasonable efforts to
transfer, effective as of the Closing Date, from Seller to Purchaser all
contractual obligations and liabilities of Seller towards the Seller Pension
Provider, in relation to the Seller Pension Plan. Purchaser shall offer the
Transferred Seller Employees the opportunity to participate in the Purchaser
Pension Plan effective as of the Closing Date.
Section 7.03. Other Employees. With respect to employees of Seller who
are not subject to the DCC and employees of Subsidiaries ("OTHER EMPLOYEES"):
(a) For a period of not less than twelve (12) months following the
Closing, Purchaser shall provide or cause to be provided to the Other
Employees in each jurisdiction in which such Other Employees are employed
compensation and employee benefit plans, considered in the aggregate, that
are comparable in all material respects to the level of compensation and
employee benefits (other than equity-based compensation) provided to the
Other Employees immediately prior to the Closing.
(b) In addition to and without limitation on paragraph (a) hereof,
Purchaser shall provide for a period of twelve (12) months after the Closing
Date, severance benefits that are comparable in all material respects to the
severance benefits provided to the Other Employees immediately prior to the
Closing Date.
(c) In addition to and without limitation on paragraph (a) hereof,
Purchaser shall adopt or assume, as applicable, or shall cause the
Subsidiaries and any successor of any of them to adopt or assume, effective
as of the Closing, pension plans and programs for Other Employees on terms
and conditions that do not result in any adverse effect or reduction in
aggregate pension benefits to Other Employees compared to the benefits which
they would have been eligible to accrue had their participation in the
pension plans in which they were participants immediately prior to the
Closing continued uninterrupted following the Closing. Without limitation on
the foregoing, Purchaser shall assume, or shall cause the Subsidiaries or
any successor of any of them to assume, sponsorship of, and any liabilities
or other obligations relating to, any insurance contracts, trust agreements,
or other funding vehicles relating to any pension plans or programs covering
Other Employees and in effect immediately prior to the Closing Date. Nothing
in this paragraph is intended to prevent or in any way limit the ability of
Purchaser following the Closing Date to terminate or amend any such plan in
accordance with its terms.
Section 7.04. Works Council Advice. Section 7.04 of the Seller
Disclosure Schedule contains a copy of the letter, dated June 4, 2004, delivered
to Seller by its interim works council expressing the advice of that body with
respect to this Agreement and the
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transactions contemplated hereby. Parent and Purchaser accept, and undertake to
fulfill or comply with, each of the conditions to such advice set forth in such
letter.
ARTICLE VIII
TAX MATTERS
Section 8.01. Transfer Taxes. Purchaser shall be responsible for and
pay, and indemnify and hold Seller and its Subsidiaries harmless from, any and
all Transfer Taxes imposed by any Governmental Authority in connection with the
transactions contemplated by this Agreement. In the event that any such Transfer
Taxes are required under applicable Law to be collected, remitted or paid by
Seller or any of its Subsidiaries or any agent thereof (as requested by Seller
or any of its Subsidiaries), Purchaser shall (on behalf of itself and of its
applicable Subsidiaries) pay the amount of such Transfer Taxes to Seller, any of
its Subsidiaries or any such agent, as applicable, at the Closing or thereafter,
as applicable, as requested of or by Seller, in addition to the Purchase Price.
Section 8.02. Tax Indemnification. (a) Purchaser shall be responsible
for and pay, and indemnify and hold Seller harmless from, any and all Tax
liabilities of Seller with respect to the Business and the Assets due to any
taxing authority for any Pre-Closing Tax Period (as well as amounts relating to
the Pre-Closing Tax Period described in Section 8.02(c) but excluding any
amounts indemnified under Section 8.01), other than Tax liabilities (i) that are
Retained Liabilities pursuant to Section 2.02(b) or (ii) that arise directly or
indirectly as a result of a carry-back of Tax losses from a Post-Closing Tax
Period to a Pre-Closing Tax Period due to a disallowance of such Tax losses or
otherwise; provided, however, that this clause (ii) of this Section 8.02(a) does
not limit Purchaser's obligation to pay Seller for the use of Seller's items of
loss or credit that arise in a Straddle Period and are attributable to the
Post-Closing Tax Period (pursuant to Section 8.02(c)), for which Purchaser has
agreed to indemnify Seller for under this Section 8.02(a).
(b) Seller shall be responsible for and pay, and indemnify and hold
Purchaser harmless from, any and all Tax liabilities that are Retained
Liabilities pursuant to Section 2.02(b) (including, for the avoidance of
doubt, Tax liabilities of Seller for any Post-Closing Tax Period).
(c) Purchaser and Seller agree that any allocation of income or
deductions required to determine any Taxes attributable to any Straddle
Period shall be made by means of a closing of the books and records of
Seller at the Closing; (i) the amount of Taxes that would be payable for any
Pre-Closing Tax Period, assuming the Seller's taxable period, in fact, ended
at the Closing (other than Tax liabilities that are or would be Retained
Liabilities pursuant to Section 2.02(b)) will be treated as a Tax liability
of Seller which Purchaser shall be responsible for
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and pay, and indemnify and hold Seller harmless from pursuant to Section
8.02(a), (ii) the amount of taxes that would be payable for any Post-Closing
Tax Period, assuming Seller's taxable period, in fact, ended at the Closing,
will be treated as a Tax liability of Seller which Seller shall be
responsible for and pay, and indemnify and hold Purchaser harmless from
pursuant to Section 8.02(b), (iii) the amounts of taxes under (i) and (ii)
will be determined without taking into account any net aggregate loss that
would be treated as arising from the Pre-Closing Period or the Post-Closing
Period assuming the books and records are closed at the Closing as described
above.
(d) Payment of any amount due under this Section 8.02 shall be made
within 30 days following written notice by the other party that payment of
such amounts to the appropriate taxing authority is due. In the case of a
Tax that is contested in accordance with the provisions of Section 8.03,
payment of Tax to the appropriate taxing authority will not be considered to
be due earlier than the date a final determination to such effect is made by
the appropriate taxing authority or a court.
(e) If the receipt or accrual of any indemnity payments pursuant to
this Agreement (including for the avoidance of doubt, payments pursuant to
Section 8.01) results in taxable income to the indemnified party, such
payment shall be increased by the indemnifying party so that, after the
payment of any Taxes with respect to the receipt or accrual of the payment,
the indemnified party shall have realized the same net amount it would have
realized had the payment not resulted in taxable income. Purchaser and
Seller shall timely and properly claim all deductions, credits or other Tax
benefits that result from any such payment or in respect of an Assumed
Liability or Retained Liability, unless otherwise required by applicable
Law. To the extent an Assumed Liability or Retained Liability, as
applicable, gives rise to a deduction, credit or other Tax benefit to the
indemnified party, the amount of any indemnity payment made by the
indemnifying party to the indemnified party under this Agreement shall be
decreased by the amount of the reduction in Taxes actually realized by the
indemnified party as a result of such deduction, credit or other Tax
benefit. If a reduction in Taxes of the indemnified party occurs in a
taxable period following the period in which the indemnification payment is
made, the indemnified party shall promptly repay the indemnifying party the
amount of such reduction when actually realized.
Section 8.03. Procedures Relating to Indemnification of Tax Claims. (a)
If, after the Closing Date, an audit, investigation, discussion with any taxing
authority or similar proceeding with respect to Tax matters (the "TAX
PROCEEDING") shall have previously been initiated, shall be commenced, or a
claim shall be made, by any taxing authority, which might result in an indemnity
pursuant to Section 8.02, the party receiving notice of such Tax Proceeding
shall promptly notify the other party in writing of such Tax Proceeding;
provided, however, that failure to give such notice shall not affect the
indemnification obligations under Section 8.02, unless such failure materially
prejudices the indemnifying party.
(b) With respect to any Tax Proceeding which might result in an
indemnity payment pursuant to Section 8.02(a), after the Closing Date
Purchaser shall have the right to control all proceedings taken in
connection with such Tax Proceeding (including selection of counsel) and,
without limiting the foregoing, may with the consent of the
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other party (which consent shall not be unreasonably withheld) pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with any taxing authority with respect thereto, and may, in its
reasonable discretion, either pay the Tax claimed and xxx for a refund where
applicable Law permits such refund suits or contest the Tax Proceeding in
any permissible manner.
(c) With respect to any Tax Proceeding which might result in an
indemnity payment pursuant to Section 8.02(b), the Seller shall have the
right to control all proceedings taken in connection with such Tax
Proceeding (including selection of counsel) and, without limiting the
foregoing, may with the consent of the other party (which consent shall not
be unreasonably withheld) pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with any taxing authority
with respect thereto, and may, in its reasonable discretion, either pay the
Tax claimed and xxx for a refund where applicable Law permits such refund
suits or contest the Tax Proceeding in any permissible manner.
(d) With respect to any Tax Proceeding which might result in an
indemnity payment pursuant to Section 8.02(a) or Section 8.02(b) (a "JOINT
TAX PROCEEDING"), after the Closing Date Purchaser and Seller shall jointly
control, and each shall have the right to participate in all activities and
strategic decisions with respect to such Joint Tax Proceedings at their own
expense. There shall be no settlement or closing or other agreement with
respect to a Joint Tax Proceeding without the consent of the other party,
which consent will not be unreasonably withheld; provided, however, that if
either party shall refuse to consent to any settlement, closing or other
agreement that the other party proposed to accept (a "PROPOSED SETTLEMENT"),
then (a) the liability with respect to the subject matter of the Proposed
Settlement of the party who proposed to accept the Proposed Settlement shall
be limited to the amount that such liability would have been to that party
if the Proposed Settlement has been accepted, and (b) the other party shall
be responsible for all expenses incurred thereafter in connection with the
contest of such Joint Tax Proceeding except to the extent that the final
settlement imposes less liability on the party who proposed to accept the
Proposed Settlement than the Proposed Settlement would have imposed, in
which case such party shall be responsible for a portion of such expenses
equal to the lesser of (i) 50% of such expenses and (ii) the amount by which
the liability imposed on such party by the final settlement is less than
that which would have been imposed by the Proposed Settlement. Either
Purchaser or Seller may assume sole control of any Joint Tax Proceeding if
it acknowledges in writing that it has sole responsibility for any Tax
liabilities that might arise in such Joint Tax Proceeding.
(e) Notwithstanding the foregoing, with respect to a Tax Proceeding
which relates to the basis of Seller's assets for Dutch corporate income tax
purposes as set forth on the Opening Tax Balance Sheet, following the date
of this Agreement until the Closing Date, Seller shall regularly consult
with Purchaser regarding all material activities and all strategic decisions
of and relating to such Tax Proceedings prior to
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undertaking such activities or strategic decisions and shall take account
of, reflect, or implement all of the Purchaser's comments and suggestions
that Seller reasonably determines appropriate. For the avoidance of doubt,
nothing in this Section 8.03(e) shall limit or modify the parties rights or
obligations under section 5.01(j) or (k). Seller and Purchaser shall each
bear its own expenses relating to the matters described in this section.
Section 8.04. Filing of Tax Returns. (a) Purchaser shall prepare or
cause to be prepared and Seller shall timely file or cause to be timely filed
Seller's Tax Returns for any Pre-Closing Tax Period (other than a Straddle
Period Return) due after the Closing Date. Seller shall prepare or cause to be
prepared and timely file or cause to be filed timely its Tax Returns for any
Post-Closing Tax Period that are required to be filed.
(b) Seller's Tax Returns for any Straddle Period shall be prepared in a
manner consistent with prior practice. Seller will allow Purchaser (i) an
opportunity to review and comment upon any Tax Return for any Straddle
Period (including any amended Tax Return for any Straddle Period) with
respect to any item that may result in an indemnity payment pursuant to
Section 8.02(a) or which could reasonably be anticipated to have a Material
Adverse Effect on a Post-Closing Tax Period with respect to the Business and
the Assets (ii) with respect to Seller's 2003 and 2004 corporate income Tax
Return, to determine whether to elect to file such corporate income Tax
Return on the basis of the fiscal unity regime as applicable in 2002, and
(iii) an opportunity to review any Seller Tax Return which includes a net
loss that would be carried back to a Pre-Closing Tax Period and result in a
refund described in Section 2.01(b)(ii)(E). If Purchaser reasonably objects
to the treatment of any such item, Purchaser shall, as promptly as
practicable, notify Seller in writing that it so objects, specifying with
particularity any such item and stating the specific factual or legal basis
for any such objection. If any such notice of objection is delivered, Seller
and Purchaser shall negotiate in good faith to resolve their disagreement.
If Seller and Purchaser have not resolved their disagreement within five
Business Days after receipt by Seller of such notice, they shall refer the
matter for resolution to independent accountants, the decision of which
shall be binding on Seller and Purchaser. The costs, fees and expenses of
the independent accountants shall be borne by (1) Seller if the net
resolution of the disputed items favors Purchaser, (2) Purchaser if the net
resolution of the disputed items favor Seller, and (3) otherwise equally by
Purchaser and Seller. If a Tax Return for any Straddle Period is required to
be filed before the independent accountants are unable to make a
determination with respect to any disputed item, then, notwithstanding the
filing of such Tax Return, the independent accountants shall make a
determination with respect to any disputed issue and appropriate adjustments
shall be made to reflect such determination not later than five Business
Days after such decision has been rendered.
Section 8.05. Refunds and Credits. Any Tax refund or amount credited or
offset against Tax that is actually realized by Seller (including the
application or carry-forward of a deduction, loss or other Tax benefit from a
Pre-Closing Tax Period to offset or reduce any
62
Taxes payable by Seller under Section 2.02(b)(i)) or with respect to the
Business or the Assets (other than any refund retained by Seller under Section
2.01(b)(ii)) shall be for the account of Purchaser, and Seller shall pay over to
Purchaser the amount of any such refund, credit, offset or reduction within ten
days after receipt of such refund or utilization of such credit, offset or
reduction.
Section 8.06. Tax Information and Cooperation. Seller and Purchaser
shall reasonably cooperate, and shall cause their respective Affiliates,
officers, employees, agents, auditors and other representatives reasonably to
cooperate, in preparing and filing all Tax Returns, including providing powers
of attorney, maintaining and making available to each other all records
necessary in connection with Taxes and in resolving all disputes and audits with
respect to all taxable periods relating to Taxes. Such cooperation shall include
the retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Any information obtained under this Section 8.06 shall be kept
confidential, except as may be otherwise necessary in connection with the filing
of Tax Returns or claims for refund or in conducting an audit or other
proceeding.
Section 8.07. Tax Ruling. Seller and Purchaser shall reasonably
cooperate to obtain a ruling from the Dutch tax authority regarding the
structure described in Section 2.09(a), or such alternative rulings as Seller
and Purchaser may jointly agree, to the effect that any payment made under this
Agreement by Purchaser or on behalf of Purchaser to Seller or on behalf of
Seller for any Assumed Liabilities will be treated as an additional installment
of the Purchase Price as referred to in article 13 para 1, Corporate Income Tax
Act, and accordingly that any such payment will not constitute a taxable profit
item for Seller.
ARTICLE IX
CLOSING CONDITIONS
Section 9.01. Conditions to Each Party's Obligations. The respective
obligations of each Party to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Closing Date of each
of the following conditions, any or all of which may be waived in whole or in
part by the Party being benefited thereby to the extent permitted by applicable
Law:
(a) The transactions contemplated by this Agreement shall have been
approved and adopted by the Required Seller Vote.
(b) (i) Any applicable approvals or waiting periods required under the
Antitrust Laws or foreign investment Laws of The Netherlands, the European
Union or the United States shall have expired or early termination thereof
shall have been granted; (ii) the approvals of the AT and the FCC shall have
been received, and (iii) all other approvals or waiting periods required
under any other Antitrust Law or foreign
63
investment Law shall have been obtained or expired, except for approvals the
failures of which to have been obtained and waiting periods the failures of
which to have expired, do not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) (i) No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent), in any case which is in effect and which prevents or prohibits
consummation of the transactions contemplated by this Agreement; and (ii) no
Governmental Authority shall have instituted any action or proceeding (which
remains pending at what would otherwise be the Closing Date) before any
court in The Netherlands, the European Union, the United States or any other
country or before any other Governmental Authority of competent jurisdiction
seeking to enjoin, restrain or otherwise prohibit consummation of the
transactions contemplated by this Agreement, except, in the case of (i) and
(ii), for Laws, actions and proceedings that do not and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(d) All authorizations, consents or approvals of a Governmental
Authority (other than those specified in Section 9.01(b) hereof) required in
connection with the execution and delivery of this Agreement and the
performance of the obligations hereunder shall have been made or obtained,
without any limitation, restriction or condition that has or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, except for such authorizations, consents or approvals, the
failures of which to have been made or obtained do not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 9.02. Conditions to the Obligations of Parent and Purchaser.
The obligations of each of Parent and Purchaser to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Closing Date of each of the following additional conditions, any or all of which
may be waived in whole or part by Parent to the extent permitted by applicable
Law:
(a) The representations and warranties of Seller contained herein shall
have been true when made and on and as of the Closing Date as though made on
and as of the Closing Date (except for representations and warranties
expressly made as of a specified date, which need be true only as of the
specified date); provided, however, that this condition shall be deemed
satisfied with respect to all representations and warranties (except for the
representations and warranties set forth in Section 3.02) unless all
failures of such representations and warranties to be so true and correct
(without giving effect to any materiality, Material Adverse Effect or
similar qualification), in the aggregate, have had, or would reasonably be
expected to have, a Material Adverse Effect.
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(b) Seller shall have performed or complied in all material respects
with all covenants and agreements contained herein required to be performed
or complied with by it prior to or at the time of the Closing.
(c) Seller shall have delivered to Parent a certificate, dated the date
of the Closing, signed by any officer of Seller, certifying as to the
fulfillment of the conditions specified in Sections 9.02(a) and 9.02(b).
(d) Seller shall have delivered to Purchaser at the Closing a duly
executed and acknowledged certificate, in form and substance acceptable to
Purchaser and in compliance with the Code and Treasury regulations
promulgated thereunder certifying such facts as to establish that the
acquisition of New Skies Networks, Inc. is exempt from withholding pursuant
to Treasury regulation Section 1.1445-2.
(e) All approvals of the FCC and AT required to consummate the
transactions shall have been received without the imposition of any
condition that would reasonably be expected to have, individually or in the
aggregate, a material adverse effect on Purchaser, Parent or any of their
Affiliates or a Material Adverse Effect; there shall be no outstanding
petition for reconsideration, application for review or judicial appeal of
such consent which is reasonably likely to result in a reversal of such
consent or the imposition of a condition that would reasonably be expected
to have, individually or in the aggregate, a material adverse effect on
Purchaser, Parent or any of their Affiliates or a Material Adverse Effect;
and the time for filing any such petition, application or appeal shall have
expired, provided that the expiration of the time for such filing will not
be a condition to Parent's or Purchaser's obligations to effect the closing
if no petition to deny or objection was filed at the FCC against the FCC
applications prior to the granting of such applications by the FCC or
relevant FCC staff official pursuant to delegated authority. Parent and
Purchaser may waive the requirement that the FCC approval not be subject to
further review, reconsideration or judicial appeal which is reasonably
likely to result in a reversal of such consent or the imposition of a
condition that would reasonably be expected to have, individually or in the
aggregate, a material adverse effect on Purchaser, Parent or any of their
Affiliates or a Material Adverse Effect as a condition to its obligation to
close.
(f) The FCC shall have (i) issued an order or notice updating, or taken
such other action necessary to update, the "Permitted Space Station List" to
reflect Purchaser as the new owner and operator of the Seller Satellites
with terms and conditions that do not, and would not be reasonably expected
to, have, individually or in the aggregate, a material adverse effect on
Parent, its Affiliates or Purchaser or a Material Adverse Effect; provided
that Purchaser and Parent shall accept conditions, if required by the FCC,
(A) to insulate non-U.S. entities with direct or indirect interests in
Purchaser or Parent and (B) to cap or limit further investments in Purchaser
or Parent by non-U.S. entities (other than in the case of either clause (A)
or (B), for non-U.S. entities (1) that are Cayman Islands limited
partnerships or general partner entities (but no other entities) affiliated
with
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Blackstone Capital Partners (Cayman) IV L.P. and Blackstone FI Communication
Partners (Cayman) L.P and in existence as of the date hereof or (2) that are
formed specifically for the purpose of this transaction in jurisdictions
which Purchaser reasonably believes would not adversely affect the receipt
of FCC approvals and that individually or collectively with each other or
those entities identified in clause (1) above, hold, directly or indirectly,
a 100% interest in Purchaser or Parent); and (ii) made an affirmative
determination specified in 47 U.S.C.ss.761(a) in writing, or otherwise
determined in writing that 47 U.S.C.ss.761(a) does not apply to this
transaction.
(g) Purchaser shall have received written permission of the Dutch
Ministry of Economic Affairs or the AT, which permission, in as far as the
rights and obligations pertaining to orbital slots and frequencies as
mentioned in the Dutch Seller Permits issued by The Netherlands (as set
forth in Schedule 3.12(a)) are concerned, is substantially the same as the
permission set forth in such Dutch Permits, except for such differences as
would not reasonably be expected to have, individually or in the aggregate,
a material adverse effect on Purchaser, Parent or any of their Affiliates or
a Material Adverse Effect.
(h) Purchaser shall have received the funds committed for the Debt
Financing on the terms and conditions set forth in the Debt Financing
Commitment Letter or upon terms and conditions which are, in the reasonable
judgment of Purchaser, comparable or more favorable to Purchaser and to the
extent that any such terms and conditions are not set forth in the Debt
Commitment Letter, then upon terms and conditions which are reasonable and
customary.
(i) Subject to and taking into account arrangements entered pursuant to
Section 6.14, Seller shall have received all requisite consents,
authorizations and approvals from third parties (other than Governmental
Authorities) other than those the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 9.03. Conditions to the Obligations of Seller. The obligations
of Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions, any or all of which may be waived in whole or in part by
Seller to the extent permitted by applicable Law:
(a) The representations and warranties of each of Parent and Purchaser
contained herein shall have been true when made and on 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 need be
true only as of the specified date); provided, however, that this condition
shall be deemed satisfied unless all failures of such representations and
warranties to be so true and correct (without giving effect to any
materiality or similar qualification), in the aggregate, have had, or would
reasonably be expected to have a material adverse effect on the ability of
any of Parent or Purchaser to perform their respective obligations under
this Agreement.
66
(b) Each of Parent and Purchaser shall have performed or complied in
all material respects with all covenants and agreements contained herein
required to be performed or complied with by it prior to or at the time of
the Closing.
(c) Parent shall have delivered to Seller a certificate, dated the date
of the Closing, signed by an executive officer of Parent, certifying as to
the fulfillment of the conditions specified in Sections 9.03(a) and 9.03(b).
ARTICLE X
TERMINATION; AMENDMENT; WAIVER
Section 10.01. Termination by Mutual Agreement. This Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
at any time prior to the Closing Date by mutual written consent of Seller and
Parent duly authorized by the Seller Boards and Parent.
Section 10.02. Termination by Either Parent or Seller. This Agreement
may be terminated and the transactions contemplated by this Agreement may be
abandoned at any time prior to the Closing Date by Seller or Parent if:
(a) the Closing Date shall not have occurred by April 5, 2005; provided
that, if all conditions to the obligations of the parties set forth in
Article IX other than the conditions set forth in Sections 9.01(b), 9.01(d),
9.02(e), 9.02(f) and 9.02(g) and conditions to be satisfied at the Closing
have been satisfied or waived prior to such date, then the right to
terminate this Agreement pursuant to this Section 10.02(a) shall not be
available to any party until September 5, 2005;
(b) the Required Seller Vote shall not have been obtained at the Seller
Shareholders Meeting or at any adjournment or postponement thereof; or
(c) any Governmental Authority shall have issued or adopted a final Law
or Order or taken any other final action restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such Law or other
action is or shall have become final and nonappealable, except for Laws,
Orders or actions that do not and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Purchaser,
Parent or any of their Affiliates or a Material Adverse Effect;
provided that, the right to terminate this Agreement pursuant to this Section
10.02 shall not be available to any party that has breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately contributed to the occurrence of the failure of the transactions
contemplated by this Agreement to be consummated.
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Section 10.03. Termination by Seller. This Agreement may be terminated
and the transactions contemplated by this Agreement may be abandoned at any time
prior to the Closing Date by Seller if:
(a) there is a breach by Parent or Purchaser of any representation,
warranty, covenant or agreement contained in this Agreement that would give
rise to a failure of a condition set forth in Sections 9.03(a) or 9.03(b),
which has not been cured (or is not capable of being cured) within fifteen
Business Days following receipt by Parent of written notice of such breach;
(b) prior to the obtaining of the Required Seller Vote, Seller shall
have received an Acquisition Proposal which the Seller Boards have
determined to constitute a Superior Proposal pursuant to and in accordance
with Section 6.04 and to accept; provided that (i) Seller shall have
complied in all material respects with Section 6.04, (ii) Seller shall have
given Parent at least five Business Days notice prior to such determination
and the Seller Boards shall have determined, after taking into account any
revised proposal made by Parent since receipt of such Superior Proposal,
that such Superior Proposal remains a Superior Proposal (and Seller shall
have negotiated in good faith with Parent during such five Business Day
period (to the extent Parent desires to negotiate) with respect to such
revised proposal), and (iii) Parent (or its designee) shall have been paid
in accordance with Section 10.05(b)(i);
(c) (i) any court shall have issued any Order (A) ruling that the
resolutions passed by the Seller Boards or the Seller Shareholder Meeting
violated applicable Law or (B) restraining, enjoining, prohibiting such
resolutions or the execution of this Agreement and/or the transactions
contemplated hereby, or (ii) the Enterprise Chamber of the Court of Appeal
in Amsterdam ("de Ondernemingskamer") shall have entered an Order ordering
(A) an investigation ("onderzoek") within the meaning of Article 2:345 DCC
of Seller's affairs ("beleid en de gang xxx xxxxx") and (B) a provisional
measure ("onmiddellijke voorziening") within the meaning of Article 2:349a
(2) DCC in connection with this Agreement and the transactions contemplated
hereby, provided that Seller shall have used its reasonable best efforts,
after consultation with Parent, to defend against the entry of any such
Order and, in the case of clause (ii), that the Supervisory Board of Seller
shall have determined in good faith, after consultation with its legal
advisors, that there is a reasonable likelihood such investigation, the
related report or the possibility of further proceedings would lead to
material adverse consequences to Seller, its business or its stakeholders
and that termination pursuant to this Section would be in the best interests
of Seller, its business or its stakeholders;
(d) the Debt Financing Commitment Letter shall have terminated without
any renewal of, or a substitute for, the Debt Financing Commitment Letter
(on terms and conditions comparable in all material respects to the terms
and conditions contemplated in the Debt Financing Commitment Letter or on
terms which are not more adverse to Seller) having been obtained.
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Section 10.04. Termination by Parent. This Agreement may be terminated
and the transactions contemplated by this Agreement may be abandoned at any time
prior to the Closing Date by Parent if:
(a) there is a breach by Seller (i) of any of its obligations under
Section 6.04, or (ii) of any representation, warranty, covenant or agreement
contained in this Agreement that, individually or in the aggregate, would
give rise to a failure of a condition set forth in Sections 9.02(a) or
9.02(b), which (in the case of this clause (b)) has not been cured, or is
not capable of being cured, within fifteen Business Days following receipt
by Seller of written notice of such breach;
(b) prior to the obtaining of the Required Seller Vote, (i) the Seller
Boards shall have failed to recommend or shall have withdrawn, modified or
amended or shall have proposed to withdraw, modify or amend, in any manner
adverse to Parent, their respective recommendations that Seller shareholders
vote in favor of the transactions contemplated by this Agreement (or
publicly announce any intention to do so), (ii) the Seller Boards shall have
approved or recommended any Acquisition Proposal (or resolved to do so) or
(iii) any Person or group (as defined in Section 13(d)(3) of the Exchange
Act) shall have become the Beneficial Owner of more than 50% of the
outstanding Seller Shares.
Section 10.05. Effect of Termination and Abandonment. (a) In the event
of termination of this Agreement and the abandonment of the transactions
contemplated by this Agreement pursuant to this Article X, this Agreement
(other than Sections 5.02(b), 10.05 and Article XI) shall become void and of
no effect with no liability on the part of any Party (or of any of its
directors, officers, employees, agents, legal and financial advisors or
other representatives); provided that, no such termination shall relieve any
Party of any liability or damages resulting from any willful and material
breach of any representations, warranties, covenants or agreements contained
in this Agreement.
(b) Notwithstanding Section 6.09, if this Agreement is terminated:
(i) by Seller pursuant to Section 10.03(b), then, concurrently
with or prior to such termination, Seller shall pay (or
cause the payment) to Parent (or its designee) a liquidated
damages amount of U.S.$20 million.
(ii) by Parent pursuant to Section 10.04(b), then, no later than
five Business Days following such termination, Seller shall
pay (or cause the payment) to Parent (or its designee) a
liquidated damages amount of U.S.$20 million.
(iii) by Seller pursuant to Section 10.03(c) and within twelve
months of any such termination, Seller enters into a
definitive agreement regarding any Acquisition Proposal
(provided that, for the
69
purposes of this clause (iii), the first reference to "10%"
in the definition of Acquisition Proposal shall mean "20%")
or any Acquisition Proposal is consummated, then, no later
than one Business Day following the execution of such
definitive agreement or consummation, Seller shall pay (or
cause the payment) to Parent (or its designee) a liquidated
damages amount of U.S.$20 million.
(iv) by either Parent or Seller pursuant to Section 10.02(b) and
(A) at or prior to the time of the Seller Shareholders
Meeting an Acquisition Proposal (provided that, for the
purposes of this clause (iv), the first reference to "10%"
in the definition of Acquisition Proposal shall mean "20%")
shall have been commenced, publicly disclosed or
communicated and (B) within twelve months of any such
termination, Seller enters into a definitive agreement
regarding any Acquisition Proposal or any Acquisition
Proposal is consummated, then, no later than one Business
Day following the execution of such definitive agreement or
consummation, Seller shall pay (or cause the payment) to
Parent (or its designee) a liquidated damages amount of
U.S.$20 million.
The parties agree that if this Agreement is terminated in
circumstances under which Parent is entitled to receive a payment
of liquidated damages pursuant to this Section 10.05(b), and such
payment is made, such liquidated damages shall be Parent's and
Purchaser's exclusive remedy for any loss, Liability, damage or
claim arising out of or in connection with any such termination of
this Agreement.
Section 10.06. No Rescission. Without prejudice to the preceding
Sections 10.01 through 10.05 hereof, the Parties waive their respective rights
to rescind or cancel (ontbinden or vernietigen) this Agreement on the basis of
Sections 3:44, 6:228 and 6:265 of the DCC. The party in error shall bear the
risk of any error made in creating this Agreement.
Section 10.07. Amendment. This Agreement may be amended by action taken
by Seller, Parent and Purchaser at any time before or after approval of the
transactions contemplated by this Agreement by the Required Seller Vote but,
after any such approval, no amendment shall be made which requires the approval
of the shareholders of Seller under applicable Law without such approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the Parties.
Section 10.08. Extension; Waiver. At any time prior to the Closing
Date, each Party (for these purposes, Parent and Purchaser shall together be
deemed one Party and Seller shall be deemed the other Party) may (i) extend the
time for the performance of any of the obligations or other acts of the other
Party, (ii) waive any inaccuracies in the representations and warranties of the
other Party contained herein or in any document, certificate or writing
delivered pursuant hereto, or (iii) waive compliance by the other Party with any
of the agreements or
70
conditions contained herein. Any agreement on the part of either Party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such Party. The failure of either Party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Nonsurvival of Representations and Warranties. None of
the representations, warranties, covenants and agreements in this Agreement or
in any exhibit, schedule or instrument delivered pursuant to this Agreement
shall survive beyond the Closing Date. This Section 11.01 shall not limit any
covenant or agreement of the Parties which by its terms contemplates performance
after the Closing Date.
Section 11.02. Entire Agreement; Assignment; Transfer. (a) This
Agreement (including the schedules and Exhibits), together with the Ancillary
Agreements and the Confidentiality Agreement, constitute the entire agreement
between the Parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral, between the
Parties with respect to the subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by operation of Law (including, but
not limited to, by merger or consolidation) or otherwise; provided that, (i)
Parent may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any wholly-owned
Subsidiary of the current owner(s) of Parent which is organized under the
laws of Luxembourg, The Netherlands or the Cayman Islands and (ii) Purchaser
may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any wholly-owned Subsidiary of Parent
which is organized under the laws of The Netherlands, but, in the case of
(i) and (ii) no such assignment shall relieve any of Parent or Purchaser of
its respective obligations under this Agreement if any such assignee does
not perform such obligations. Any assignment in violation of this Section
11.02(b) shall be void. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
Parties and their respective successors and assigns.
(c) Until the earlier of (i)12 months after the Closing and (ii) the
consummation of the Liquidation, neither Purchaser nor any Permitted
Transferee of Purchaser may transfer all or substantially all of the Assets
or the Assumed Liabilities to any third party or parties unless the
transferee has agreed in writing to be liable, jointly and severally with
Purchaser and Parent, for all Liabilities and obligations of Purchaser and
Parent under this Agreement; provided that no such transfer shall relieve
Parent, Purchaser or any Permitted Transferee of their respective
obligations under this Agreement if the transferee fails to perform any such
obligations or pay for any Assumed Liability. Any transfer in violation of
this Section 11.02(c) shall be void. "PERMITTED
71
TRANSFEREE" shall mean any party to which any of the Assets have been
transferred in accordance with this Section 11.02(c).
Section 11.03. Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) when sent if sent by facsimile; provided that, the fax is
promptly confirmed by telephone confirmation thereof, (ii) when delivered, if
delivered personally to the intended recipient and (iii) two Business Days
following sending by overnight delivery via a national or international courier
service, and in each case, addressed to a Party at the following address for
such Party:
if to Parent or Purchaser to:
c/o The Blackstone Group L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X.X.
Attention: Xxxx Xxxxxxxx
Facsimile: x0 000 000 0000
with a copy to: The Blackstone Group International
London
Stirling Square
0-0 Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxxxx Xxxxxx
Facsimile: x00 00 0000 0000
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: x0 000 000 0000
NautaDutilh X.X.
Xxxxxxxxxxxxxx 0000
X.X. Xxx 0000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Attention: Xxxxxx ten Have
Facsimile: x00 00 000 0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
Citypoint
00
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxxx Xxxxxxx
Facsimile: x00 00 0000 0000
if to Seller, to:
New Skies Satellites X.X.
Xxxxxxxxxxxxxxxxxx 0
0000 XX The Hague
The Netherlands
Attention: Thai Xxxxx
Facsimile: x00 00 000 0000
with a copy to: De Brauw Blackstone Westbroek
Tripolis
Burgerweeshuispad 301
P.O. Box 75084
1070 AB Amsterdam
Attention: Xxxxxx van Olffen
Facsimile: x00 00 000 0000
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
U.S.A.
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: x0 000 000 0000
and: Cleary, Gottlieb, Xxxxx & Xxxxxxxx
City Place House
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Xxxx X. Scarcliffe
Facsimile: x00 00 0000 0000
or to such other address as the Person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 11.04. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of The Netherlands, without giving effect
to the choice of law principles. The United Nations Convention on Contracts for
the International Sale of Goods shall not apply.
73
Section 11.05. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 11.06. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each Party and its successors and
permitted assigns, and, except for Section 6.06, nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 11.07. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 11.08. Enforcement; Jurisdiction. All disputes arising out or
in connection with this Agreement, including disputes concerning the existence
and validity thereof, shall be resolved exclusively by the District Court
(Arrondissementsrechtbank) in The Hague, The Netherlands and each of the Parties
(a) consents to submit itself to the personal jurisdiction of that court in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from the District
Court in The Hague or any other court in The Netherlands or any other
jurisdiction and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
the District Court in The Hague, The Netherlands.
Section 11.09. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the Parties and delivered to the other Parties.
Section 11.10. Interpretation. (a) The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or
74
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any statute defined or referred to herein means such
statute as from time to time amended, qualified or supplemented, including by
succession of comparable successor statutes. References to a Person are also to
its permitted successors and assigns.
(b) The phrase "made available" in this Agreement shall mean that the
information referred to has been actually delivered to the Party to whom
such information is to be made available.
(c) The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any
provisions of this Agreement.
[signature page follows]
75
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
NEPTUNE ONE HOLDINGS LTD.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Director
MUNARO HOLDING B.V.
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
NEW SKIES SATELLITES N.V.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
