Exhibit 2.1
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
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
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
EXECUTION COPY
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;
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 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.
"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 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.
"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.
"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 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.
"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)
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)
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:
(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 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
(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 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, 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:
(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
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.
(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.
(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 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
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;
(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.
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 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 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
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 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 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.
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.
(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.
(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 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.
(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.
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
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 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 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 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, 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, 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;
(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 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 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, 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 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,
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 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
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 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 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 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.
(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 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 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 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 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 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 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
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.
(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
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
X.X.X.xx. 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.
(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.
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.
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
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 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 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
One 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.
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 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]
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
